See, China isn’t just about low-cost exporters arbitraging an undervalued yuan anymore.
Many companies actually want a stronger yuan and the higher relative purchasing power it creates.
They’re starting to come out in force and be heard:
Yang Yuanqing, chief executive officer of Beijing-based computer maker Lenovo Group Ltd., said gains would boost consumers’ purchasing power. Qin Xiao, chairman of China Merchants Bank Co., said an end to the yuan’s 20-month peg to the dollar would let lenders set market-based interest rates. Chen Daifu, chairman of Hunan Lengshuijiang Iron & Steel Group Co., said a stronger currency would cut import costs.
The remarks are significant because it’s the first time so many executives at state-controlled enterprises have spoken publicly in favour of appreciation since China pegged the yuan at 6.8 per dollar in July 2008 to protect exporters, said Lee Boon Keng, deputy chief investment officer at Bank Julius Baer & Co. in Singapore. The comments are at odds with Premier Wen, who said criticising the peg amounts to “protectionism,” in a March 14 response to sanction demands from U.S. lawmakers.
When your wealth is accumulated in yuan, it’s nice to see the value of the yuan rise. Especially if you realise that your largest growth market isn’t in the U.S..