Weak Yuan May Not Boost China’s Economy: PBOC Adviser

A weaker renminbi, or yuan won’t necessarily lift China’s sagging economic growth rates, contrary to market expectations, warned an advisor to the People’s Bank of China monetary policy committee.

“Looking at the impact on growth, we used to think it [a depreciating renminbi] could boost exports, but the story has become a lot more complicated,” said Huang Yiping on the sidelines of the Boao Forum for Asia on Wednesday.

Because the country imports many of the building blocks of its exports via a global supply chain network, a depreciating renminbi could have mixed consequences for exporters, said Huang, who is also an economics professor at Peking University.

At the same time, any effect on exports could also be delayed as a result of the J-curve effect, he added, referring to a situation where a country’s trade balance initially worsens following currency depreciation.

CNBC

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam

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