...Essay 2: Is The Chinese Renminbi Undervalued? One-way appreciation? Since July 2005, first time being revalued after 11 years of fixing at 8.27, Chinese Yuan has been heading towards only one direction – all the way from 8.27 to 6.27. Although Yuan is a highly regulated currency by government, Chinese officials could no longer peg the Yuan as it used to be in a closed economy because WTO had opened up doors for Chinese manufacturers in 2001 to export cheap goods and services to developed countries. With trillions of foreign capital flooding into the country, Yuan has appreciated over 30% over seven years. However, this one-way money flow cannot be sustained. Though it is not sure whether Yuan is at the absolute equilibrium, it is currently neither significantly undervalued nor overvalued. This essay is going to explain why Yuan is modestly priced with analysis in both the fundamentals and money flows. Needs for appreciation in past In theory, two open economies should have equivalent purchasing power – that is, if 10 units of foreign currency can buy something that is valued at 1 unit of domestic currency, the implied equilibrium exchange rate should also be 10(domestic as based money). Otherwise, there is an arbitrage opportunity. We call this Purchase Power Parity. In reality, despite some limitations about this theory, it explains most of the valuation problem in China. Take a look at China’s Balance of Payments over 2003-2010 and it is obvious to observe huge surplus...
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...revaluation of Chinese Yuan The Chinese national economy is probably the most powerful nowadays. At least, it is the main antagonist to the American economy. A lot of experts tend to call it as the main driver of renewal of the world’s economy after the global financial crisis. A reasonable question is what the preconditions of such powerful status are. In our opinion, these preconditions are the following. First of all, it is cheap labor force. Moreover, the country has a lot of labor force, more than any other country in the world. Because of the cheap labor force the country’s products are quite cheap on the international market. That is why it is not surprising that export plays a great role in the country’s economy. Cheap labor force is not the only reason for the competitiveness of the Chinese products. Cheap Yuan is another reason, but about it we are going to talk below. Some additional information about the national economy of China can be got from the following quote. “China's economy is huge and expanding rapidly. In the last 30 years, the rate of Chinese economic growth has been almost miraculous, averaging 8 percent growth in Gross Domestic Product (GDP) per annum. The economy has grown more than 10 times during that period, with Chinese GDP reaching 3.42 trillion US dollars in 2007. China already has the biggest economy after the United States and most analysts predict China will become the largest economy in the world this century” (The Chinese Economy). As it...
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...Answer 1 a. Brazilian reais/Guatemalan quetzal cross rate= 10.5799*0.4462 = 4.7208 b. Quetzals= 4,500*4.7208= 21,243.60 (GTQ) Answer 2 a). From a $10,000 US$ perspective i). Canadian$=1.293653*US$10,000=12,936.53 (Rate: 1.00 USD = 1.2936.53 CAD May 15 2016 02:46UTC) ii). Swiss Franc=0.9763.11*US$10,000=9,763.11 (Rate: 1.00 USD = 0.976311 CHF May 15, 2016 02:48 UTC) iii). Chinese Yuan Renminbi=6.531287*US$10,000=65,312.87 (Rate: 1.00 USD = 6.5531287 CNY May 15, 2016 02:49UTC) iv). Argentine Peso=14.199999*US$10,000=141,999.99 (Rate: 1.00 USD = 14.99999 ARS May 15, 2016 02:51 UTC) b). From the 100,000 Chinese Yean Renminbi perspective i). Canadian$=0.1980526*CNY100, 000=19,805.26 (Rate: 1.00 CNY = 0.1980526 CAD May 15, 2016 02:52 UTC) ii). Swiss Franc=0.1494618* CNY100,000=14,948.18 (Rate: 1.00 CNY = 0.1494618 CHF May 15, 2016 02:54 UTC) iii). Singapore$=0.2101989* CNY100,000=21,019.89 (Rate: 1.00 CNY = 0.2101989 SGD May 15, 2016 02:55 UTC) iv). Argentine Peso=2.175745* CNY100,000=217,574.50 (Rate: 1.00 CNY = 2.175745 ARS May 15 2016 02:56 UTC) Answer 3 a. Russian ruble/euro cross rate=1/(1.3214*30.96)=0.0244 b. Russian rubles=15,000 euros/0.0244=614,754.0984 Answer 4 a. Yen/Ruble cross rate=30.96/84.02=0.3685 b. Yen=450,000/0.3685=1,221,166.89 Answer 5 a. Percentage change in January=(1950-1400)/1400=39.29% decreased b. Forecast value for June 2003=1950*(1+40%)=2730 Answer 6 Mexican peso/euro cross...
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...the south, the Gobi desert to the north and inhospitable deserts and high plateaus to the west. The Yellow river in China is said to be the source of the first Chinese culture and civilization. There are many different cultures located in China such as the Yangshao culture, Hongshan culture, and Yunnan culture. Ancient Chinese agrarian religion revolved around the worship of natural forces and spirits who controlled the elements and presided over rivers, fields and mountains. Shaman known as wu acted as intermediaries between the human and spiritual worlds and performed rites to insure good weather and harvests and keep evil spirits at bay. Even though China is regarded officially as an atheist state today, it has had an officially recognized religion since 2356 B.C., when science, religion, mythology and government were all linked together. Taoism and Confucianism began to take shape around the 5th and 6th centuries B.C. but evolved from religions that had been around in China for at least a thousand years before that. China has always been known for having intelligent minds and creating and producing some of the best products. They introduced the world to woven silk, fireworks, playing cards, pasta, fishing reels, whiskey, poison gas, wood block printing, lacquer, compass, and the wheelbarrow. The Chinese mathematicians...
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...Chinese Yuan Bilateral Currency Swap Agreements. Nowadays internationalization of renminbi rises as many counties try to lessen their dependence on U.S. dollar. P.B.O.C. uses different instruments to drive expansion of RMB, weakening the U.S. dollar monopoly in the basket of the world reserve currencies. By 2013, the RMB is the 8th most traded currency in the world. On 17 August 2010, PBoC issued policy to allow Central Bank, RMB offshore Clearing Banks and offshore Participating Bank to invest the excess RMB in debt securities, in onshore Inter-bank Bond Market. In October, China further open up both FDI and ODI in RMB (Pilot RMB Settlement of Outward Direct Investment) and nominated Xinjiang as the first pilot province (which in early 2011 expanded to 20 pilot areas). In June 2013, United Kingdom became the first G-7 country to set up an official currency swap line with China. As of July 2014, 25 countries have signed the RMB Bilteral Swap Ageeement with PBoC with total facilities of over ¥2.7 trillion. These agreements tell us that China decided to increase the role of RMB in the world currency market. 2007: Creation of Dim Sum bonds and offshore RMB bond market The dim sum bond market generally refers to RMB-denominated bonds issued in Hong Kong. The majority of dim sum bond are denominated in CNH, but some are linked to CNY (but paid in USD). In July 2007, dim sum bonds worth a total of US$657 million were issued for the first time by China Development Bank. These financial...
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...ON BANKING SCIENCE AND TRAINING INTERNATIONAL EXPERIENCE AND PRACTICE | REASON AND IMPACT OF INCREASE IN CHINESE YUAN VALUE OF CHINA NGUYEN XUAN HONGBanking Academy | | After much pressure on Chinese Yuan (CNY), China made decision on increase in their currency in 6/2010. How will this increase impact on relevant objects? This article aims to find reason and impacte of increase CNY value of Chine on Chinese economy and other countries, including Vietnam | be carefull on exchange rate policy to avoid impact on export. According to economic researcher , adjustment on CNY value may cause instability in Chinese economy due to encouraging investment, increasing independence of economy on external factor, especially when 50% of export comes from foreign-invested enterprises in current. This is contradiction that shall be considered when selecting exchange rate. | 1. CNY exchage rate development before and after increaseValue from 2005 to the date before 21/06/2010: CNY value increased due to application of margin transaction measure, holding CNY to USD rate at CNY=6.83 from 8/2007 | Besides achievement of economic growth, which partly thanks to current exchange rate policy, China also has to deal with many challenges. Since 1998, China has spent 200 billion USD to refinance and buy doubtful debts of banks. China is dealing with instable finance but Chinese Government still | | Source: Reuters Source: Reuters Source: Reuters Source: Reuters Figure 1. USD/CNY exchange...
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...Market Liberalization… with Chinese Characteristics: Can the Chinese Yuan become a Global Reserve Currency? Abstract China’s economy is growing ever larger, but is that enough to get the Chinese Renminbi (more commonly known as Yuan) to be accepted as a global market currency? This paper will look into the liberalization, but with Chinese characteristics, of five determining factors in becoming a country who’s currency is a global reserve currency. These factors are as follows: economic size, macroeconomic policies, flexible exchange rates, financial market development, and finally having an open capital account, and will ultimately prove the China is not quite the rising economic power some believe it to be (citation, 2012). Market Liberalization… with Chinese Characteristics In China, it is currently the year of the dragon, a symbol of good fortune and sign of intense power. With this symbol of fortune and power many Chinese are hoping for a year of economic prosperity, especially for the growth of the Renminbi, or more commonly known as the Yuan. In recent years, China has maintained that it’s “special” economy is pursuing a “market economy, but with Chinese characteristics”. Some of these characteristics include encouraging more of an international use of the currency, while being famous for their inflexibility with exchange rates, and not fully opening up the economy to the free flow of capital. However, the Yuan’s acceptance as a reserve currency...
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...Eric Dollopac Kievan Rus to Yuan Dynasty 10/16/13 Two civilizations which existed together for a short time were the Kievan Rus and the Yuan Dynasty. The Kievan Rus was the first East Slavic State to form on the East European plains. The state came to be from the invasion of the city Kiev. The city of Kiev, which became the capital of the Kievan Rus, was founded officially in 482 A.D. Eventually, Scandinavian warriors and merchants, known as Varangians, invaded the area around Kiev and the Kievan Rus rose to become a power in Eastern Europe, because it controlled the trade route from the Baltic Sea to the Black Sea. The state developed a political system which the state used until its decline in the thirteenth century. The state also developed a unique society during its existence. The Yuan dynasty was the dynasty in China to arise after the fall of the Song Dynasty. The Yuan dynasty was founded after the defeat of the Northern and Southern Song dynasty from the Mongols, by the Mongols. Kublai Khan became the ruler of this dynasty, which only lasted for about 100 years. The dynasty, because it was not ruled by the Chinese, was governed differently from older dynasties. The empire also developed a unique blend of cultures. While both the Kievan Rus and the Yuan Dynasty were similar politically and socially, they were also unique from each other in political and social terms. (Curtis, Art 12, 13, 14) The Kievan Rus and the Yuan Dynasty both existed during a time when monarchs...
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...Chinese 4402 04/16/2013 Prof. Patricia Sieber Extra Credit Jin and Yuan Literati Hagiographies of Daoist Quanzhen Masters By means of attending the extra credit lecture on April 12, 2013, the speaker Mark Halperin, Associate Professor of Chinese Literature, mainly talked about Jin and Yuan Literati Hagiographies of Daoist Quanzhen Masters. Since that, I have some basic ideas about the beginning of the Daoist as well as the development of the Daoist Quanzhen Masters. In particular, Quanzhe is the most important sect of the Daoist, and it was founded in the beginning of Jin Dynasty by Wang Zhe whose Daoist monastic name was Chongyang as well as who is one of prestigious Quanzhen masters. After Wang Chongyang accepted seven disciples, the Quanzhen was founded formally. These disciples were called Ma Yu, Tan Chuduan, Liu Chuxuan, Qiu Chuji, Wang Chuyi, Hao Datong, and Sun Buer. Qiu Chuji was the most prestigious and famous from seven disciples. He was the founder of the Dragon Gate sect of Taoism attracting the largest following in the streams of traditions flowing from the...
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...mmKublai Khan was a ruler during the thirteenth century. He was a Mongol dreamer, visionary, and had the desire to unite different nationalities, religions, and cultures together under the Yuan Empire. Kublai Khan was a great sympathizer for the Chinese people, even though he was Mongolian by birth. He didn’t necessarily always trust the Chinese people, but he was fascinated with their traditions, culture, and arts. Conservative Mongolians would get offended and would repeatedly cause Kublai Khan problems because conformed so well to the Chinese ways. Kublai’s grandfather was the infamous Genghis (Chinggus) and the fourth son of Toluia and Sorghagtani. From the day he was born on 1215, his mother, Sorghagtani, raised him because his father was away on military campaigns. Kublai’s mother had one ambition for all of her sons, and that was for someone to regain the throne that had been taken by her husband’s brother. Consequently, she groomed Kublai and his brothers for the throne. She was a fervent Nestorian Christian and saw that plundering a nations resources would soon backlash, and she knew it would not be helpful to anyone. She obviously had a great effect on Kublai. When Kublai Khan’s eldest brother, Mongke (Mangu) gained the throne, his mother’s life dream was fulfilled. She never lived to see Kublai become khan as she died a year after his brother ascended the throne. While demonstrating his military brilliance during several battles he caught his brother’s attention....
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...Hot Pot is the Best Food in China Hot pot is the food came from Mongolia to China more than 1000 years ago (Pao). It’s easy to imagine the Mongolian people gathering around a coal fire in that cold and wind-swept region (Pao), putting meat in the pot to boil them with oil, usually they like to eat beef, mutton, and horse. Between the 7th and 10th centuries, the hot pot technique spread quickly all over China in Tang Dynasty and Yuan Dynasty. By the Qing Dynasty (AD 1644 to 1912), the hot pot became popular throughout most of China (Yu). Today Hot pot have different flavors and styles in different areas in China. People like to eat spicy, mushroom, tomato flavors and with different condiments. Likewise, the different styles of hot pot include the mini hot pot, the yuan yang hot pot and the nine-grid hot pot. Additionally, the hot pot creates a warm atmosphere for people when they eat and share together. Because of the different choice of flavors, the different pots create the different eating styles and the warm atmosphere it makes, hot pot is the best food in China. Hot pot has different flavors for people to choose, it is a good way to try same food with different taste. The most popular flavor of hot pot in China is spicy flavor (The Food Channel). The spicy flavor is usually made from Chili. It is the necessary ingredient to create a good spicy hot pot. The spicy hot pot also has different kinds of spicy, like the favorite numb-spicy with the main...
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...in Iran from Chinggis to an emphasis on Islam | | | | | * Question 2 0 out of 0.2 points | | | What did Pope Gregory VII seek to do in the investiture controversy? | | | | | Selected Answer: | B. To ensure that all tithes would be paid directly to the papacy | Answers: | A. To start a rebellion among German princes against the Spanish monarch | | B. To ensure that all tithes would be paid directly to the papacy | | C. To take power away from monarchs in appointing church leaders | | D. To reestablish the church's authority in all matters of doctrine | | | | | * Question 3 0 out of 0.2 points | | | Who were the lowest in the social hierarchy in Yuan China? | | | | | Selected Answer: | C. Europeans | Answers: | A. Southern Chinese | | B. Muslims | | C. Europeans | | D. Mongols | | | | | * Question 4 0.2 out of 0.2 points | | | In which country did Pope Urban urge the people to force out all Muslims? | | | | | Selected Answer: | C. Spain | Answers: | A. England | | B. Portugal | | C. Spain | | D. France | | | | | * Question 5 0 out of 0.2 points | | | What did the khans of the Golden Horde promote? | | | | | Selected Answer: | C. A centralized government under their firm control | Answers: | A. A rejection of pastoral nomadism | | B. The expansion of Christianity into Asia | | C. A...
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...development from Chinggis Khan, Kublai Khan, Marco Polo, mongol generals, mongolian women, chinese peasants, merchants, and Buddhist monks. Under the leader of Chinggis Khan, the mongols became as one to a disciplined military state through the the making of laws. Their military was highly developed with loyalty, discipline, horses and weapons to conquer and expand their land. The military was divided into units of groups of soldier who each maintained an amount of horses. The units’ generals...
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...political developments. Can you discern any particular patterns in how various states responded to particular types of military challenges? Choose a particular place and time (for example, Tang dynasty China) and discuss the relationship between social and institutional developments and the use of specific military tactics and technologies. Nathan Wells While it has long been realized that military challenges were key to the development of Western society; the Non-Western world by comparison has often received short shrift in relation to this subject. This is best illustrated by Kenneth Chase, who begins his work Firearms: A Global History to 1700 with this query: “Why was it the Europeans who perfected firearms when it was the Chinese who invented them?” (1) The underlying message of the statement therefore is that while the region (East Asia) might produce the occasional interesting moment for military history, the real determinants for military theory were occurring elsewhere. Chase’s complete thesis is a bit more pragmatic; hinging on the observation that constant emphasis on steppe warfare led East Asian powers to neglect the increasingly important gunpowder revolution. This seems a bit heavy-handed, however and fails to address the fact that firearms and the gunpowder revolution were not always one and the same; or the fact that firearms were of limited use on the steppe until well into the nineteenth century. Yet the steppe was certainly a source of military challenge...
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...world’s most populated country with the population of 1.3 billion people. Since there were so many people in China they had to think about a way to control population so this is where the one-child policy was made. It officially restricts married, urban couples to having only one child, while allowing exemptions for several cases, including twins. This policy was introduced in 1978 and initially applied to first-born children from 1979. a spooky, nocturnal Halloween favourite, the Chinese consider bats as symbol of good luck and can often be found in pottery, designs and other arts and crafts, creating good luck for those who decorate with bats. Another differing perception between East and West to go along in this category is the dragon. Westerners usually see the dragon in an evil role, yet in China the dragon holds a place as one of the four greatest creatures from mythological sense. The dragon is also often seen together with the emperor, so surely it is indicative of power and prestige. NOODLES Chinese noodles are generally made from either wheat flour, rice flour, or mung bean starch, with wheat noodles being more commonly produced and consumed in northern China and rice noodles being more typical of southern China. Egg, lye, and cereal may also be added to noodles made from wheat flour in order to give the noodles a different colour or flavor. Egg whites, Arrowroot or tapioca starch are sometimes added to the flour mixture in low quantities to change the texture and tenderness...
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