Here's why China devalued its currency

[jhungary]

You're right 2% isn't going to trigger an impact on Chinese Export to get investors to start buying. In fact, 2% is too small to change the investors mind. CPP needs to devalue again but this time do it at 40% then we are talking. The 2% will not help Chinese gain its export back to where it was before. Cheap effort for nothing.

well, Chinese export will NOT gone back to where it was before, you can't stay secondary economy forever, in fact, the question is, how China can shred the export market dependence for its economic growth, the value of yuan being inflated all this year in fact is only what Chinese bank doing to enjoy the export ride. But as the living standard and general inflation goes up, they cannot stay in the same level as before, and the only saviour is for them to migrate out of this dependence. Hence the dropping in currency value.

The Currency value does not do much to export market, but they are open to investment in capital market, it send out a signal to foreign investor, that China need foreign currency to stabilise their own currency, thus building a financial dependent portfolio. I.e. Attract investment.

Again, now the question is, can they do it before their secondary sector collapse? That's the real question. And I sincerely hope whoever in charge of Chinese Finance does not share the common dream to these PDF Chinese....That is about all I can say

 

[Viper0011.]

Here's why China devalued its currency
China’s currency cuts aren’t always an attempt to bail out exporters. The most recent move has bigger policy implications.

I've said it before many times. Both China and India have huge populations (over 1.2 billion each), while the world isn't exactly growing by a billion a year outside of these two guys. Meaning, there is limited manufacturing, IT and all that work that can go around. What needed to go, already went. So, no more or not more significant investment can go to either of these guys.
But after reaching a certain point, they still have to cater for their 1.2 billion population and create infrastructure, provide healthcare and all that. And that's difficult for newer systems like China or others growing in the past 10-15 years. So now the real work starts. The market predictions will start to slow down. And somehow, the internal market will have to expand these big populated countries. Which is a touch task.

Lowering economic output = Dropping the currency rates = Try to focus on growing your economy internally. Don't expect the GDP growth rate all from external orders!! The world needs so much of Chinese products or Indian tech labor and they are almost saturating in these two areas.

 

[zeronet]

another round of currency avalanche is expected later this yr with us federal reserve increasing interest rate. watch out.

 

[TaiShang]

China's fixed-asset investment up 11.2% in Jan.-Jul.
August 12, 2015

China's fixed-asset investment grew 11.2 percent year on year to 28.85 trillion yuan (over 4.5 trillion U.S. dollars) in the first 7 months of 2015, official data showed.

The growth retreated from 11.4 percent registered in the first half and much lower than 17 percent in the corresponding period of last year, the National Bureau of Statistics (NBS) said on Wednesday.

The calculation does not include fixed-asset investment by farmers. It includes projects with investment of at least 5 million yuan, as well as all property development projects.

Fixed-asset investment in the second industry, the biggest part, increased 9 percent from a year ago, while that in infrastructure jumped 18.2 percent. The smallest agricultural investment was up by 28.2 percent.

Wang Baobin, an NBS statistician, said the investment growth remained stable and the structure continued to improve.

**

China retail sales up 10.5% in July
August 12, 2015

China's retail sales grew 10.5 percent year on year to 2.43 trillion yuan ( 383.8 billion U.S. dollars) in July, slightly down from the 10.6 percent growth recorded in June, official data showed Wednesday.

In the first seven months, retail sales grew 10.4 percent, the National Bureau of Statistics said.

Growth in rural areas continued to outpace that in cities.

Sales in rural areas rose 11.9 percent in July and 11.6 percent in January-July period, in contrast to the 10.3 percent and 10.2 percent growth seen in urban areas.

 

[NiceGuy]

LoL ... FANTASY ! 3 years not longer, just watch who will become the economy colony of U.S ... lol.

Before u happy for the TPP, just think twice what's kind of 'Made in Vietnam' vs 'Made in U.S' selling in Vietnam market ... if ur Vietnamese companies beat by U.S companies and bankrupt in local market, ur domestic economy over then that's i called 'Economy colony of U.S'. Even though there will be many Vietnam-U.S joint companies setup in Vietnam, still slavers to work for American parent firms ... did u ever watch the Mexico economy ? That's ur future after TPP.

VN is the second most important TPP members in containing CN, so US must treat VN nicely, VN also can quit TPP if seeing no benefit. SO, we wont have any big problem.

And dont forget that ur TW is colonized by US now, so, u guys should just try to survive wt much higher living cost instead of keep talking nonesense abt VN

 

[vtnsx]

well, Chinese export will NOT gone back to where it was before, you can't stay secondary economy forever, in fact, the question is, how China can shred the export market dependence for its economic growth, the value of yuan being inflated all this year in fact is only what Chinese bank doing to enjoy the export ride. But as the living standard and general inflation goes up, they cannot stay in the same level as before, and the only saviour is for them to migrate out of this dependence. Hence the dropping in currency value.

The Currency value does not do much to export market, but they are open to investment in capital market, it send out a signal to foreign investor, that China need foreign currency to stabilise their own currency, thus building a financial dependent portfolio. I.e. Attract investment.

Again, now the question is, can they do it before their secondary sector collapse? That's the real question. And I sincerely hope whoever in charge of Chinese Finance does not share the common dream to these PDF Chinese....That is about all I can say

"The Currency value does not do much to export market, but they are open to investment in capital market, it send out a signal to foreign investor, that China need foreign currency to stabilise their own currency, thus building a financial dependent portfolio. I.e. Attract investment."

That is a gamble. You know how the minds of investors are they buy low and sell high. Similar situation could occur about a month and a half ago. But the 2% is not enough to create more of a problem.

 

[jhungary]

"The Currency value does not do much to export market, but they are open to investment in capital market, it send out a signal to foreign investor, that China need foreign currency to stabilise their own currency, thus building a financial dependent portfolio. I.e. Attract investment."

That is a gamble. You know how the minds of investors are they buy low and sell high. Similar situation could occur about a month and a half ago. But the 2% is not enough to create more of a problem.

hence the 2% but not any more.......

It ain't gonna get you more than you already into but big enough to stimulate interest

 

[dy1022]

Leave us alone, you third world weak poor losers!

 

[Providence]

I've said it before many times. Both China and India have huge populations (over 1.2 billion each), while the world isn't exactly growing by a billion a year outside of these two guys. Meaning, there is limited manufacturing, IT and all that work that can go around. What needed to go, already went. So, no more or not more significant investment can go to either of these guys.
But after reaching a certain point, they still have to cater for their 1.2 billion population and create infrastructure, provide healthcare and all that. And that's difficult for newer systems like China or others growing in the past 10-15 years. So now the real work starts. The market predictions will start to slow down. And somehow, the internal market will have to expand these big populated countries. Which is a touch task.

Lowering economic output = Dropping the currency rates = Try to focus on growing your economy internally. Don't expect the GDP growth rate all from external orders!! The world needs so much of Chinese products or Indian tech labor and they are almost saturating in these two areas.

Actually India has a slight advantage when it comes to mobility. As the major cities improve their lifestyles and more bigger corporations flourish, the moderate paying companies would look for talent in second tier cities. And the advantage with services is employees can be highly mobile as compared to china which is finding it difficult to move the manufacturing units deep into the mainland although most factory workers are from there.

 

[vtnsx]

hence the 2% but not any more.......

It ain't gonna get you more than you already into but big enough to stimulate interest

That's a temporary fix. China needs a permanent solution.

I've said it before many times. Both China and India have huge populations (over 1.2 billion each), while the world isn't exactly growing by a billion a year outside of these two guys. Meaning, there is limited manufacturing, IT and all that work that can go around. What needed to go, already went. So, no more or not more significant investment can go to either of these guys.
But after reaching a certain point, they still have to cater for their 1.2 billion population and create infrastructure, provide healthcare and all that. And that's difficult for newer systems like China or others growing in the past 10-15 years. So now the real work starts. The market predictions will start to slow down. And somehow, the internal market will have to expand these big populated countries. Which is a touch task.

Lowering economic output = Dropping the currency rates = Try to focus on growing your economy internally. Don't expect the GDP growth rate all from external orders!! The world needs so much of Chinese products or Indian tech labor and they are almost saturating in these two areas.

The keyword here is market "saturation". You are right. It is not a linear line as everyone expected. It is a parabola. Take the derivative of the parabola and you get the maximum which is peek of growth. So many people can buy from China. But not everyone will support (buy) China made product. The rest of the world need to eat too. Not just China. China needs to work on its internal issues.

 

[cnleio]

"Vietnam, still slavers to work for American parent firms"

Like it was in China? with Apple did to Chinese workers? They even got suicide nets.

China has FOXCONN , also has Lenovo, HuaWei, ZTE, XiaoMi, Hair, Hisense, TCL, Konka, ChangHong, DJ, TP-Link etc N.o2 companiest listed in Top500 world rank ... what's big company Vietnam has ?

 

[zeronet]

some other data you guys may have interests. All data come from here:
2015年1-6月主要经济体货物进出口统计数据 - notheal的日志 - 网易博客

This guy (or a whole team I guess) did this wonderful data collection work for yrs. Say a thank you to him.

NOTE: VS SPLY= versus same period last year

2015 1-6 month international Tangible Goods Trade (export + import) in USD million:

Export for 2015 1-6 month

Import in $million for 2015 1-6 month

Trade surplus in the same period, in USD million

 

[vtnsx]

China has FOXCONN , also has Lenovo, HuaWei, ZTE, XiaoMi, Hair, Hisense, TCL, Konka, ChangHong, DJ, TP-Link etc N.o2 companiest listed in Top500 world rank ... what's big company Vietnam has ?

Time will tell.

 

[cnleio]

VN is the second most important TPP members in containing CN, so US must treat VN nicely, VN also can quit TPP if seeing no benefit. SO, we wont have any big problem.

And dont forget that ur TW is colonized by US now, so, u guys should just try to survive wt much higher living cost instead of keep talking nonesense abt VN

U.S must treat VN nicely ... LOL, u think Vietnam can get free lunch from U.S ?! The Chinese spend Yuan to purchase inside China market not USD ... and China has whole supplier chains here to support 'Made in China' not like Vietnam imported raw materials from China supplier ... the cost not the problem for China coz Chinese can produce them without foreign supports.

Time will tell.

Did the time tell u when Vietnam can get rich, after TPP ? Just let we see it.

 

[vtnsx]

U.S must treat VN nicely ... LOL, u think Vietnam can get free lunch from U.S ?! The Chinese spend Yuan to purchase inside China market not USD ... and China has whole supplier chains here to support 'Made in China' not like Vietnam imported from China supplier ... the cost not the problem for China coz Chinese can produce them without foreign supports.


Did the time tell u when Vietnam can get rich, after TPP ? Just let we see it.

TPP is Vietnam's leverage. It is not up to TPP to get Vietnam out of poverty. It is up to its people and government. They decide the future. Not TPP. It's naive to believe things will not change for the better or for worst.