Yuan Sees a High- Chinese Exporters Not Happy.

Last week, the People’s Bank of China pegged the Yuan at 6.1980 against the US Dollar, the highest number that the Yuan has achieved in the last 19 years. While this development shows the rising power of the Chinese markets and the incremented influx of foreign investment into this communist country, the home grown Exporters aren’t very happy about these developments. Understandable, since they are losing their formerly sizable profit margins due to the steeply hiked Yuan.

The export business in the Pearl River Delta Region of China has traditionally been seen as very lucrative and a facsimile of the overall export trade status across China. According to latest reports from the Delta Region, exports have picked up significantly above the normal average since the last month but the rapid appreciation of the Chinese national currency Yuan has made it impossible for anyone to make a realistic profit out of this situation. The traders are dejected and seeking expert intervention.

Crunching some numbers: According to the Chinese General Administration of Customs, China’s exports rose steeply in April 2013, a brisk 14.7% improvement over April 2012.These numbers are indicative of improving Global demand for Chinese merchandise and the improved Chinese trade presence on the Global scene. An overall 64.3% Companies finalised foreign trade deals in April- a 4% hike over March 2013, and an impressive 47.3% improvement over April 2012.

However, all hope is not lost. According to credible sources at ANZ Bank, a Chinese Banking Goliath, China’s gross foreign exports will revert back to normal in the coming months as a result of the State Administration of Foreign Exchange’s intervention in terms of strict measures to check unaccounted trading money that is flowing into the Chinese economy and adding to the current strain. Sources confirmed that many companies have borrowed funds in Dollars, converted them to Yuan and held onto them awaiting the improving exchange status of the Yuan. Naturally, this move has backfired and the unclogging of this situation will go a long way in alleviating the gross impact of the current situation.