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1 Dollar To Yuan

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Last Updated: 03 December 2020

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General | Latest Info

It takes two to tango, but unless both partners move in perfect cohesion, sequence of graceful maneuvers can be reduced to a series of clumsy moves. The latter depiction seems to be particularly apt when it comes to explaining gyrations between the Chinese Yuan and the US dollar, thanks to China's recalcitrance on the topic of Yuan appreciation and United States reluctance to be partner in this currency tango. A great deal is at stake here. The contentious issue of Yuan revaluation has implications not just for the world's two largest economies and the global economy, but also for your personal well-being through its potential impact on your expenses, investments and perhaps even job prospects. China commenced its transition to a global powerhouse in 1978, as Deng Xiaoping ushered in sweeping economic reforms. In three decades from 1980 to 2010, China achieved GDP growth averaging 10 %, in process lifting half of its 1. 3 billion population out of poverty. The Chinese economy grew five-fold in dollar terms from 2003 to 2013, and at 9. 2 trillion, it was easily the world's second-largest economy at the end of that period. But despite slowing growth trajectory that saw the economy expand by only 7. 7 % in 2013, China appears to be on track to surpass the United States as the world's largest economy sometime in the 2020s. In fact, based on purchasing power parity-which adjusts for differences in currency rates-China may pull ahead of the US as early as 2016, according to a report on global long-term growth prospects released by the Organization for Economic Cooperation and Development in November 2012. China's rapid growth since the 1980s has been fuelled by massive exports. A significant chunk of these exports go to the US, which overtook the European Union as China's largest export market in 2012. China, in turn, was the United States' second-largest trading partner until July of 2019, and its third-largest export market, and by far its biggest source of imports. The tremendous expansion in economic ties between the US and China-which accelerated with China's entry into the World Trade Organization in 2001-is evident in the more than 100-fold increase in total trade between the two nations, from 5 billion in 1981 to 559 billion in 2013. In 2018, Trump administration, which has routinely accuse China of manipulating its currency to boost its exports, launch series of tariffs against Chinese imports. China retaliated with tariffs of its own on US imports, and the world's two largest economies have ratchet up trade tensions through the summer of 2019. On August 5 2019, China lowed value of the Yuan below its 7 to 1 peg against the dollar in response to a new series of US tariffs on 300 billion worth of goods set to go into effect Sept 1. The cornerstone of China Economic Policy is managing the Yuan exchange rate to benefit its exports. China does not have a floating exchange rate that is determined by market forces, as is the case with most advanced economies.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

About the Chinese yuan (Renminbi)

The Chinese yuan, is the Currency of China. The Chinese yuan was first introduced to China in 1948. The Symbol For Currency is, used as a prefix. According to BIS, Chinese yuan is the most traded currency. The world's second largest economy, China has a nominal GDP of 10. 866. 444 million US Dollars, with total exports of 2283 billion USD. The rate of inflation in China was 1. 44 % in 2015. Using this currency converter, you can find the latest exchange rate for Chinese yuan and calculator to convert from Renminbi to Dollars. You can use this calculator offlinewhile travelling in China.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

2015 Yuan Currency Crisis

This week the Chinese government has allowed its currency, yuan, to decline in value by about 4 percent against the US dollar. The move has renewed long-simmering debate about China's exchange rate and whether cheap yuan will be harmful to the US economy. In the wake of the 2008 financial crisis, critics fault the Chinese government for intervening in the market to make its currency artificially cheap. The cheap yuan gives Chinese exporters an advantage in world markets, which critics say is harming US businesses. Today, situation is different in an important respect: Chinese economy is weak while the US economy is strong, which is exerting downward pressure on the yuan. That means China doesn't have to intervene to make its currency cheaper. It can just let market forces push the yuan down. At the same time, healthier US economy makes it easier for the US Federal Reserve to counter the harmful effects of cheap yuan on US exports. So while there were good reasons for Americans to worry about cheap yuan few years ago, there's less reason to be concerned today. I ask Joseph Gagnon, expert on International Economics at Peterson Institute for International Economics, to help me understand what's happening in China. Here's what I learn.


2015 Devaluation

You can think of currency devaluation as kind of nationwide sale. There are thousands of businesses in China that sell goods and services to customers in foreign countries like the United States. Their goods are generally priced in China's own currency, yuan. So if the yuan becomes less valuable relative to the dollar, Chinese imports will suddenly become cheaper here in America. In other words, when the yuan falls by 4 percent, as it has over the past few days, it's as if every business in China cut its prices for Americans by 4 percent. And just as sales help stores sell more of their products, currency devaluation helps countries sell more exports, boosting the economy. Right now, the Chinese economy is in the midst of an economic slowdown and has suffered from stock market turmoil, so it could use some extra help.


What has China done?

Most developed countries, including the United States, allow the market to set the value of their currency. US policies can affect the value of the dollar indirectly, of course, but day-to-day fluctuations in the dollar's value are determined by supply and demand for dollars, not by the US government. China has take different approach. Until 2005, government kept its currency pegged to dollar, with the central bank buying or selling currency as necessary to ensure that one dollar was worth around 8. 2 yuan. Since 2005, currency has been pegged to a basket of currencies, and the exchange rate has changed over time, but China still actively manages the currency's value on a day-to-day basis. For much of the past decade, China faced accusations that it was using its control over the currency to make Chinese exports artificially cheap. Especially in the years after the 2008 financial crisis, US critics accuse China of using control over its currency to give Chinese companies an unfair advantage over US companies. That was a big deal because in the depths of recession, US businesses need all the customers they can get. No one expected China to let go of the leash altogether, but things have change. Over the past five years, US economy has been getting stronger, pushing up the value of the US dollar. Meanwhile, Chinese economy has been getting weaker. Result: Chinese government no longer needs to intervene in the market to get cheaper yuan and the export boost that comes with it. It simply needs to relax its control over the currency and let market forces push its value down. Still, Gagnon stresses that the People's Bank of China has complete control over what happens to their currency. If the government had wanted to prevent the yuan from falling, it could have used its vast currency reserves to accomplish that. It choose not to.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

History

As the chart below shows, China kept the Yuan at about the same value until 2005. The US Congress accused China of keeping the Yuan too low. President George W. Bush appointed Hank Paulson as US Treasury Secretary to ask China to strengthen its currency. Chinese leaders comply. They want to slow China's economic growth to avoid inflation. The central bank allowed the Yuan to strengthen. On January 26 2014, Yuan reached an 18-year high. That means one dollar could only buy 6. 0487 Yuan. Despite the Yuan's rise, many analysts still think the Chinese government keep the Yuan artificially low. They say it needs to rise 30 % more in value. They argue that if China allowed the Yuan to float freely, it would be more valuable than dollars because of China's strong economy. Between 2014 and January 2017, China allowed the Yuan to weaken again to boost exports. One reason was that the dollar had strengthened 15 % against most major currencies, dragging the Yuan with it. The Yuan was overvalued compared to its other trading partners that weren't peg to the dollar. During 2017, China allow Yuan to strengthen by 8 %. The PBOC does not want to be labelled currency manipulator. President Trump threatened to label China as such during the 2016 presidential campaign. In June and July 2018, Yuan weakened after Trump began a trade war by imposing tariffs on China's exports to the United States. It weaken again on August 8 2019. China's central bank lowed Yuan to 7. 0039 per dollar. That's weakest since April 21 2008.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

Sources

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

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