Stronger yuan boosts overseas tourism and imports
Posted on Jan 30, 2018 CGTN
Since beginning of 2018, the Chinese currency yuan has been rallied more than three percent against greenback. Experts said that Chinese consumers would buy more imported goods and services thanks to a stronger yuan.
The official exchange rate of yuan has risen to the highest in more than two years. According to the new data released by China's central bank, the midpoint of yuan is up to 6.3267 per dollar.
Traveling abroad is the significant part of the benefits. Travel agencies and importers are grabbing the chance to increase their sales. The market estimated that during the upcoming Spring Festival, more Chinese travelers choose to travel to foreign countries since the stronger yuan makes overseas trip as an affordable option.
Based on the data from Ctrip, which is one of the Chinese online travel agencies, an approximate 6.5 million Chinese tourists will travel abroad during the annual seven-day holiday.
Alibaba's travel unit Fliggy said sales of its overseas tourism services are on the rise. For cross-border e-commerce operators, stronger yuan means less cost in inputs. That will translate to lower prices offered to customers, lifting their purchasing power. Because of this point, shopping lovers would bring more foreign goods during their trip.
"A stronger yuan benefits us. It allows us more to choose from a wider range of products and purchase more," said Li Ye, the manager of Dongjiang direct sales center of imported goods.
The Economists signify two factors support the yuan's rally, one is tightening monetary policies, and another one is solid fundamentals in the Chinese economy.
Over the years, Chinese economy grows rapidly. A stronger yuan makes Chinese economy growing while Chinese economy is accomplished the stronger currency. It is not just boosts overseas tourism but also pave the ground for China's future.
"The central bank is gradually tightening monetary policy. It also is strengthening financial supervision. Borrowing is more expensive. That contributes to a firmer yuan," added Sun Lijian, the director of financial research center in Fudan University.