China Stress Tests Evidence That A Yuan Rise Is Coming


Despite tough talk against any action on the yuan-dollar exchange rate, parts of the Chinese government are apparently gearing up for some kind of yuan action, by continuing to stress test the effects a stronger currency would have on the Chinese economy:

Market Watch:

Chinese media reported earlier in the week that the Ministry of Finance would send researchers to study the impact of currency gains on exporters and processing manufacturers. Meanwhile, findings from a similar study, conducted by the Ministry of Commerce, are due to be released by April 27, according to a report Friday in China Business News.

The Commerce Ministry is also readying a six-point study on measures that would boost Chinese imports and foster more balanced foreign trade, according to broker Société Générale.

“China is not abandoning plans for yuan appreciation/revaluation, despite what many are interpreting as a political environment that is growing hostile to such a development,” wrote SocGen economist Glenn Maguire in Hong Kong.

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