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''' '' CHINA'S
RENMINBI CHIMES '' '''
AS CHINA'S ECONOMY RISES - So does its currency : The renminbi has reached its strongest level in years. That may just be great for President Biden.
CHINA SHARE OF THE WORLD EXPORTS ROSE to record 14.3 percent in September, according to data compiled by Jefferies & Company.
CHINA'S ECONOMY HAS COME ROARING BACK from the depths of the coronavirus pandemic, and its currency has joined the very nourishing ride.
The currency, variously known as the yuan or the renminbi, has surged in strength in recent months against the American dollar and other major currencies. On Wednesday, the dollar was worth 6.45 renminbi, compared with 7.16 renminbi in late May and close to its strongest levels in two and half years.
The stronger renminbi has implications for companies that make things in China, which is a pretty big group. It could make Chinese-made goods more expensive for the world's consumers, though the effects seem muted so far.
WHY IS THE RENMINBI STRONGER
The reason is simple : China is a rare bright spot in an otherwise ravaged global economy. The coronavirus has been tamed within China's borders, at least for now.
The nation's factories are charging ahead full steam. The world shopper's - many of them stuck at home or unable to buy plane or cruise ship tickets - are buying all the Chinese made computers, televisions selfie ring lights, swivel chairs, gardening tools and other accouterments of nestling that they can.
Investors are also eager to stash their money in China, or at least in investments tied to the renminbi. With the economy stronger, China's central bank has room to leave interest rates higher than in Europe and the United States, where central bankers are keeping rates historically low to shore up growth.
The renminbi looks, particularly strong against the dollar right now because the U.S. currency has weakened. Investors are betting that the world economy will recover this year, so many are beginning to shift their money out of dollar-dominated safe havens, like U.S. Treasury bonds, and into riskier bets.
All of that has sent money flooding into China, which tends to bolster a country's currency.
Many Chinese companies price their business in dollars rather than renminbi because the United States is such a big share of their customer base, said Shaun Roache, chief economist for Asia-Pacific for S & P Global, the ratings firm.
That means that while Chinese-factory profit margins could take a hit, American shoppers won't notice much of a price difference and will keep buying.
A strong currency has benefits for China, too. Chinese consumers can more ably buy imported goods, helping Beijing nurture a new generation of shoppers.
It looks good to economists and policymakers who have long been pressing China to loosen up its tight control of the country's financial system.
''This is definitely a window of opportunity for China to push forward to internationalize its renminbi,'' said Becky Liu, head of China Macro strategy at Standard Chartered Bank. Still, if the currency strengthens too quickly, Chinese leaders could easily step in and end the trend.
WHY DOES THIS HELP BIDEN
Critics of Beijing in Congress and within the government have long accused the Chinese government of unfairly manipulating the currency in ways that hurt American manufacturers.
At the height of the trade war with the United States, Beijing allowed the renminbi to weaken past a psychologically important point of 7 to the dollar. This led the Trump administration to label China as a currency manipulator.
Now a new administration moves into the White House, experts are looking for signals that Beijing could soften. At the very least, a strong renminbi takes the issue off Mr. Biden's plate for now.
Not everyone is optimistic that a stronger renminbi will be enough to patch relations between the world's two biggest economies, however.
''It will take a lot more than currency appreciation to get the China-U.S. relationship back on an even keel, although this certainly removes one of the potential slash points,'' said Eswar Prasad, a former head of the International Monetary Fund's China division.
The Honor and Serving of the Latest Global Operational Research on State-of-the-Economies of the world's economic powers, continues. The Word Students Society thanks author Alexandra Stevenson.
With respectful dedication to the Students, Professors and Teachers of the world. See Ya all prepare and register for Great Global Elections on The World Students Society : wssciw.blogspot.com and Twitter - !E-WOW! - the Ecosystem 2011 :
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