Looking to beat the rest is an ongoing international war being tussled in the battlefield of exchange rate favourability in order to gain an upper hand in the Macro Economy.
- Balance of payments has been an issue for all the countries
A favourable exchange rate does not mean that since Japanese Yen is degraded from Indian Rupees, it shows that the Japanese economy is inferior to the Indian economy, but it is the other way round since the real value of the general commodity prices are much higher than that of the Indian consumer market!
In much simpler words, when a European consumer (specifically trading in Euro exchange currency) goes for a product that is available in his/her own country like European online store, it is of 158 Euros (taking the example of Asus Zenfone 5 here). While, it costs us only 154 Euros for the same product through China even though the 10 Euro shipping cost is included.
- This Quarter, January to March 2015, has shown a major slump in the Euro currency, as Euro shifted back to where it once initiated in 1999 – at around $1.17. This made Chinese customers to enjoy better prices on imports from all over Europe
In the case of Buying a crawler excavator from Europe will need certain documents to be made and a lot of legal formalities would be involved other than the hefty price paid for the machine. In contrast, when purchasing the same mechanism from a TradeKey VIP or gold-key member, quality and reliability will be ensured by check-n-balance and the consumers can easily get the highest possible amount of VALUE for their hard earned MONEY.
- China accounts for 15% of the world’s money supply
The numbers speak for the whole story; which truly embarks the Exchange rates favourability of Chinese vendors through which they can enjoy more sales using the same number of resources; although, a lot cheaper thanks to China’s economic conditions. EU exchange rates mean almost 1 euro will equal to 6.6 Chinese Yen. This makes Chinese things cheaper for the European countries and while china is said to be the second largest growing economies of the world, the exchange of goods and services between European regions and the Chinese regions is inevitable!
- Foreigners have been complaining over Chinese officials to have artificially keeping the currency weaker to boost exports!
The quality of the goods and services plays its role here, as the overall general level of quality that the consumers receive is at par or even better than many when compared to the goods produced in-house. Companies like Xiaomi and Lenovo not only emerge as the cellular “better value for money” products for the end-users but also play a key-role as major competition to the industry giants such as Samsung and Apple.
- London and Singapore alone accounted for 14 billion Yuan bank deposits (2013)
Following the majority of exports which leads Chinese nationals to enjoy economy gains, the foreign bank accounts filled up with Chinese Yuan thanks to depreciated currency rates; which investors knew would appreciate with time since artificial blocks would not work long.
- Taiwanese banks started offering Chinese currency Yuan bank accounts in 2013
Many countries such as Taiwan had started offering the aforementioned currency accounts in their banks meaning people (foreigners for China) could easily stack up Chinese currency and invest in it.
- The dollar is up by 18% since July 2014 against the world’s seven most traded currencies, but by only 0.6% against the Yuan. As a result, the Chinese currency is at an all-time high in trade-weighted terms
This again means Yuan is being treated like candy in trades and there is an extreme chance of it shooting up as soon as the artificial barriers break free! Hence, the Chinese buyers can only expect their currency to improve against the EU exchange rate since anymore halt will only decease its economy even more. Since appreciation is affirmative, consumers will only be pleased in the upcoming times in china due to its past financial-year performance. More buying power would mean better lifestyles in the country in upcoming times.
