The devaluation of Chinese Yuan and its Impact on Business

1. SUBMITTED BY
SHUBHAM
MONGIA

2.  INTRODUCTION
 PAST SCENERIO
 IMPACT OF CURRENCY MANIPULATION
 IMPACTS
 DEVALUATION
 GLOBAL IMPACTS

3.  China pegged Yuan in 1997
 Growth in real GDP
 Pressure to revalue the currency
 In 2005,officially the value of yuan changed

4.  More exports than imports
 In 2002-2004,EU’s trade deficit with china had
doubled
 Yuan was undervalued by 15%-20%
 Political pressures at Home

5.  Increase U.S trade deficit
 Negatively affects U.S business
-Chinese imports relatively cheaper
-U.S exports to china relatively more expensive
 Downward pressure on U.S interest rates
 Capital inflows
 Compositional shift in U.S economy

6.  Reduced risk for investors
 Increased competitiveness for FDI
 Higher cost foreign consumer imports
 Higher cost of imported factor inputs (raw materials,
machinery, parts)
 Lower local wages higher employment
 Expanded yuan supply, easy credit, non
performing loans.

7.  De-linked the yuan
 Widening the trading bank of yuan
 What next..!!!

8.  Devalued its currency in 2005
 Increased its exports
 Growth in GDP
 Devalued its currency again in 2015

10.  Slump in the share market
 Industry giants to invest in china
 Other countries GDP imbalanced

11. T H A N K Y O U