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Tuesday, May 28, 2024

RMB Highest since Start of Trump Challenge

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Graham Perry
Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

Two separate Posts this morning.

First – the RMB has rallied to its highest level in more than 2 years + has wiped out most of the losses suffered since start of Trump Trade War.
Investors jumped into China as a gap opened between onshore interest rates in China and those in US/Europe where central banks cut rates to record lows.

Other factors: China’s improving current account position + investors turning away from the dollar. But the big one – and unnoticed – is Beijing announcement to increase the influence of the Euro in determining daily mid point fix at expense of dollar. The China/EU Investment Treaty taking effect.


Second – Something of significance that may be missed. Mitsui and China’s Tencent are setting up a JV to help Japanese companies to market their goods + services in China. The purpose? – to replace sales lost in Japan from the absence of Chinese inbound tourists.

The new business will produce + promote e-commerce shops, advertisements and video contents on Tencent’s WeChat platform on behalf of clients of Japanese companies.

Chinese tourists were big spenders until Covid-19 imposed border restrictions which significantly reduced Chinese tourist numbers.

Re Trump efforts to reduce China trade, Mitsui say the new service would not involve collecting personal information.

Pause for a moment and consider the enormous difference between China Today and USSR Yesterday. More Reds In The Bed than Reds Under The Bed – you may think.

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