US Gains Edge as China’s Currency Strengthens

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The Source
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Re: The real story
The Source   12/6/2012 10:59:26 AM


You have made a very important point and that is that the high-tech industry must get on with the business of finding ways to compete. I agree with you on that point.

Thanks for your comments.


The Source
User Rank
Re: Fickle numbers
The Source   12/6/2012 10:38:50 AM


Dear Bolaji,

The appreciation of China's currency against the US dollar during the last two years is not a temporary movement in the value of the RMB. Indeed, China is moving away from a centralized economy to a market based economy and in that transition, we are seeing China's industrial development accelerate.  In the new China, the cost of production will rise further, and I'll bet that the value of the RMB will appreciate more against all global currencies in the years ahead. The high-tech industry will have to take these expected increases in production into consideration and figure out whether it's worth assembling technology products at facilities located in China. Remember, China's economy is still on a growth spurt, and keeping a supply chain presence in China is still worthwhile, despite the rising cost of production.

Thanks for your comments.



Bolaji Ojo
User Rank
Fickle numbers
Bolaji Ojo   12/5/2012 12:46:21 PM

Nicole, I doubt any manufacturer would base long-term production planning on the temporary movement of exchange rates. In the case of China, much more than labor costs are at stake and companies will take other issues such as the total cost of production, including logistics, into account.

User Rank
Supply Network Guru
Currency Manupulation
Jacob   12/4/2012 3:36:35 AM
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Nicole, we are hearing about Chinese currency manipulation from quite some time back and now it's very clear. If they are doing it only for foreign trades, then it's fine so that they can have some gains. Otherwise if they are following the same thing for internal transitions, it will bring additional burdens to customers.

Barbara Jorgensen
User Rank
The real story
Barbara Jorgensen   12/3/2012 1:46:20 PM

I'm happy to see the analysis on the Chinese currency. So many people confuse strength of currency with price. They are related but not the same thing. It's easy to call China a manipulator, but facts are pesky things. If the analysis tells us otherwise, let's accept that and figure out other ways to be competitive.

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