what the heck does Devaluing their (China's) currency mean?

[Nick M]

I admit i am a moron

I forgot to give you a :first: for your post.

 

[Ktoyou]

It means that goods produced in China will be cheaper for the rest of the word to purchase.

While foreign companies trying to make inroads into selling goods in China just had their prices go up.. it will make it harder on them.

Actually, China has been in an economic fall-out. and they are not buying as much imported raw material, because thay are not doing well now.

 

[rexlunae]

I admit i am a moron when it comes to math, money issues, etc..

but i cannot figure out what it means that China "devalued their currency"


and why would that be a good thing (for them... or not a good thing 4 us)?


:think:

China's central bank strictly regulates the exchange rate of their currency against the dollar. So, when you say that they devalued their currency, it means that they changed the exchange rate such that a yuan buys fewer dollars.

The impact of a lower value of the currency is that Chinese exports will be cheaper, and imports into China will be more expensive. So, essentially, China is making itself more competitive in an attempt to boost its own economy by selling more to-- and buying less from the rest of the world. This can be bad for the rest of the world economy, because they are now competing against cheaper Chinese products.

 

[Kdall]

I admit i am a moron when it comes to math, money issues, etc..

but i cannot figure out what it means that China "devalued their currency"


and why would that be a good thing (for them... or not a good thing 4 us)?


:think:

Basically, it's now cheaper than ever to have your products made in China. That's bad for us because it means more jobs will be outsourced to China instead of given to people in the US