RMB appreciation to boost economy
Edited by Shen Yang



China's recent unexpected decision to appreciate its currency has sent shock waves through the international financial markets.

Economists believe that the new RMB index will have a positive effect on the country's economy in the long run.

The RMB yuan, which had been pegged to the US dollar for over a decade at the rate of 8.27 yuan to the dollar, began to trade at 8.11 from 19:00 on July 21st, according to the announcement released by China's central bank, with the peg being switched to a basket of foreign currencies.

"The 2 percent appreciation of the RMB may weaken exports and boost imports," Wang Zhao, a research fellow with the State Council Development Research Center Macro-economy Department, said. "In other words, we will see a decline in net exports."

However, the move helps China build a healthy and sustainable development structure. The export-oriented policy of the US dollar peg, which made made-in-China commodities less expensive, provoked a series of trade conflicts in recent years.

Many overseas firms moved to China to take advantage of China's cheap labor. The appreciation of the RMB squeezes the profit margin of labor-intensive and heavy-polluting firms, Wang said.

"According to the purchasing power parity evaluation, the RMB was really undervalued," Zhao Yumin, an international market research fellow from the Ministry of Commerce told Xinhua. "The appreciation pushes the RMB closer to its real value."

"The key factor in the success of a product is technology, not the foreign exchange rate," Zhao said. "Some low-end producers will be washed out. However, the appreciation will not have much impact on high-end companies."

Foreign manufacturers whose products target China's market, such as Motorola, would not feel much pressure. Yet those targeting overseas markets might need to consider their position, Zhao said.

Tang Min, deputy resident representative of the Asia Development Bank's PRC Resident Mission, said the pegging system reform would have a limited effect on foreign trade in the short term.

"The reform indicates that China's foreign exchange system is developing in a more flexible, mature, and market-oriented direction. Using the reform experiences of other developing countries, China should push the reforms slowly to minimize unexpected risks," Tang said.

Tang's remarks were echoed by Zhao Yumin. "The appreciation and reform are a wise decision," she said. "First of all, the appreciation could help dispel pressure from China's trade partners arising from trade conflicts. Second, the modest movement of the RMB will not result in big fluctuation in the financial market. Third, the pegging reform leaves enough space for continuous reform of the exchange rate."

"More importantly, pegging the yuan to a basket of currencies reduces financial risks compared to a peg to a single currency," Zhao said.

Vocabulary
appreciate 升值
currency 货币
peg 固定
boost 促进
provoke 引起
squeeze 压缩
parity 同等
echo 回应
sustainable 可持续的

 

 

World in Pictures
Photo source: ImagineChina

	Proposal for Chelsea 肯尼亚议员欲娶克林顿爱女 Godwin Chepkurgor, the 36-year-old love-struck bachelor who proposed to former US President Bill Clinton's only daughter, Chelsea, five years ago, is seen in this undated photo. The Kenyan politician said he would remain unmarried until the former President responds to his request for Chelsea's hand in marriage. "I am ready to wait for as long as I can," said Cheprkurgor.
	Mysterious circles 捷克麦地出现神秘双圆 Summer just wouldn't be the same without mysterious circles appearing in farmers' fields. The first ones this year in the Czech Republic appeared in a corn field near Rataje in the north of Moravia. A group of amateur mystery researchers examined the circles on July 20th, which some claim are left by spaceships during nocturnal visits.
	World's oldest couple 法国百岁夫妇刷新最长婚姻纪录 Andre and Marguerite Debry, central France. This recent picture shows the couple, aged 107 and 100 respectively, who will celebrate their 81st wedding anniversary this coming August 12th and become the world's oldest couple.
	The pigs dive 澳大利亚小猪跳水世锦赛 Miss Piggy at the Darwin Royal Show practicing for her pig diving world record attempt, July 22nd. She is expected to dive from a five-meter platform to earn her a place in the Guinness Book of World Records.
	Shampoo bathers 德青年在大街上用洗发精洗澡 Two young men take advantage of a free shampoo bath as police monitor their activities in front of the main train station in Hannover, Germany, July 16th. It was unclear who put shampoo in the public fountain.

 

 

World in Words
Collected & translated by Beverly

"People like the idea that there's only one, there's only one size. They have found a relatively inexpensive way to distinguish themselves."
"人们喜欢一个款式就一件, 就一个尺寸. 他们已经找到一个经济实惠的方法来展示个性. "
Raw, limited-edition T-shirts have emerged to become the badge of street cool this summer.
--设计简单自然的限量版T恤已成为今夏街头的清凉一景.

"Milan wants me and I want Milan, that is enough for me."
"米兰需要我, 我也需要米兰, 对我来说这就够了. "
Milan forward Andriy Shevchenko insisted he was not going to Chelsea despite rumours linking him with a possible departure.
--近来, 有传闻说AC米兰队前锋舍普琴科将转会英超切尔西队, 对此舍普琴科予以了否认.

"You go to a party, and there's always someone who can tell a story in this really engaging way. I'd tell a story and it always seemed to fall flat, even though I think I know some pretty good stories."
"参加聚会时, 总有人能绘声绘色地讲故事. 而我讲的故事却显得平淡无味, 虽然我认为我知道的故事也是很有趣的. "
ocal coaches aren't just for singers. These days, styling your voice is one more item on the checklist of perfection.
--声乐教练不再是歌手的专利了. 如今, 给自己的嗓音润色已成为许多人充电计划的一部分.

"The accomplishment has yet to be submitted to Guinness World Records for verification. "
"活动结果还需递交吉尼斯世界纪录委员会审核. "
In order to break the record for the biggest blind date, organizers at Nanyang Technological University paired up 536 college freshmen into 268 couples who spent at least an hour together during a single 12-hour period.
--为打破陌生男女约会的世界纪录, 新加坡南洋理工大学组织该校536名新生分成268对, 在连续12小时内至少交往了1个小时.