Yue’s Yappings

Yesterday, after a decade of being pegged against the US dollar, China finally decided to let it’s currency, known as the yuan or RMB, to float. As a result, the yuan went up 2 percent on its first day of being “free� from the dollar, from 8.27 to 8.11 per dollar. Most Americans are disappointed with such small changes, but they should be happy to know the stuff they buy from Wal-Mart and Target every day is not going to noticeably appreciate. I think as China gets richer, the yuan will rise 30%, but it will take a long time. Currently, China is depending on its export industry to maintain its impressive double digit annual GDP growth which results in employment for many factory and farm workers.

If anyone is interested in exchanging some dollars for yuan, now is a good time. But be warned, it is a long-term investment, and for the moment, you can’t exchange your yuan back to dollars. A good reason to go to China to spend it.