There has been pressure on China to revalue its currency Yuan and to value their currency in a way that is much more market based.
Now China currency is fixed to Dollar terms and India is losing out in trade in last one year India rupee has strengthen against Dollar to an extend of 14% and that also means Indian Rupee has strengthen against Yuan by 14%.
Impact: China which is world fastest growing economy has a currency which is weaker than 2nd fastest growing economy which is India which makes Chinese product cheaper globally and in India. Power equipment supplier are facing competition from china on lower price for simple currency reason as their machine is cheaper by 14% on currency alone.
U.S pressure on China would benefit more Indian exporter and Enemy’s enemy is friend so U.S-China conflict on Yuan valuation can benefit India as U.S. Treasury Secretary Timothy Geithner is in India we hope some morale boosting announcement comes after damage created by U.S President speech in China.
http://www.akprabhakar.com/ New Additions in F&O doing well
Nasik Investor Meet: http://tanmaygopal.blogspot.com/2010/04/investor-meet-in-nasik-on-04-apr-2010.html
2 comments:
hi APK
I thought we were saved big trouble by not conceding to western demands to throw our Financial system open. There was appreciation for our regulations which the west wanted us to do away with.
In that event, is it not to our longterm benefit to fit the western cogwheel to pull down china ! Should we not actually join hands with china to build the developing nations future with a longterm outlook !
African nations are milked out by the west, that the report is somuch fund has trasferred out. Japan was straightjacketed by west to its disadvantage.
Will we not fall into trap if we comply to west on deregulation etc ...
I value your opinion, if you can shed light. Thanks.
Too much of regulation is also a problem and in this case China has a fixed currency a country with the best growth having trade surplus should have a strong currency compared with countries in recession with huge trade deficit. Indian products are costlier than China in multiple ways and now currency also makes it cheaper by 14% so we are losing out on Global trade only IT trade is helping Indian exports. China has been smart country and aggressive also so western world have failed to rule the country and now dominate the country while other country falls to western pressure easily.
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