Hi everyone, I am just a student so don't have extensive knowledge about exports and imports. But as I said I do have a question for everyone. Despite China's yuan being repeatedly lowered down in value, China still remains the world's largest production factory. Are their some lessons that we being their neighbors can learn from them?
RE:Question question
by KJ on Aug 06, 2007 12:58 PM Permalink
Well, China's Yuan hasn't been significantly revalued to start with. Secondly, China has traditionally offered significant incentives to local production. Land costs have been nominalized, infrastructures have been provided free of costs, tax benefits and 10-15% benefits on exports. So even if you sell the product on cost, one makes significant money through such government benefits.
Secondly, the yuan has been pegged to the dollar. With the rate stable for fairly long periods, it has led to stable planning of the export industry. Today, the Rupee has apprectiated by over 12% in a period of 4months. Such short spurge is unthinkable.
Congress started this caring only to control the inflation which was over 7% till 2months back. Ofcourse, vote banks help!
