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3 types of Chinese most concerned about Yuan


02-02-2015 17:05 BJT

So what do the yuan moves mean for you?  If you invest in China, a falling Chinese currency against the green back may mean forex losses.  Chinese consumers who have international market exposure are also affected by the yuan volatility. My colleague Xia Cheng finds out -- which group of people is most affected by the yuan moves.

What does a cheaper yuan versus the dollar mean for ordinary Chinese people?

Type 1, Chinese property investors to the US. US property is attractive for Chinese investors seeking returns or immigration.

A strengthening dollar means those opportunities are getting pricier, and those investors' spending power in dollar terms are getting weaker as they are allowed by China's law to only exchange a fixed amount of yuan into another currency per year.

Type 2, Chinese involved in the US consumer market. They are either travellers spending on US soil or e-shoppers adding products to the cart on Amazon, Macy's or Neiman Marcus. They will pay more at the check-out. But given the high prices of similar goods in China, it is still a good bargain.

Type 3, Chinese expats to the US. They are mostly students, on a very tight budget.   

Many students are looking for value for money, so they enrol in schools that cost them less than 20 thousand US dollars a year. If the yuan drops back to the level in 2010, a huge blow for that type of budget students.

For now, the yuan's softening against the greenback may not be enough to stem Chinese consumers appetites for American goods, education, tourism.  Alibaba, the e-commerce giant who owns the toll road into China, is getting more US retailers on board to sell products in China, from old money Macy's, Saks, to startup Shoprunner. Meanwhile, China Luxury Advisors expect 3.1 million Chinese to visit America in 2019, thanks to easier visa rules. That would be almost triple that of 2013.


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