China’s Yuan Keeps Rising

China’s Economy Improves

Published Date : September 6, 2014

China’s Yuan is on a roll. For the third straight month, it rallied against the U.S. dollar. Last year, the picture was different as the yuan tanked. As China’s economy continues to improve, the yuan has further room to climb up.

Although the yuan has gained 1.5 percent since last year’s low, the yuan is still down 1.9 percent for 2014. As recent economic data shows better growth, especially in manufacturing and real estate, the Chinese government may be lenient and let the yuan go even further.

Chinese stock markets seem to be doing just as well. The Shanghai Composite Index reached its highest level in seven months, making investors grab more blue chip stocks recently. Also, in the offshore currency market, global investors – especially hedge funds – are betting on more positive currency runs.

China, the world’s second largest economy, averaged 10 percent growth yearly for 30 years in the past. However, recently China is struggling to achieve its target of 7.4 percent growth per year. The IMF recently predicted that China’s economic growth will be 7.1 percent in 2015 and will slow down further in the future.

In the past, especially in early 2014, there were many reports and predictions pointing out the collapse of the Chinese economy. None of them proved to be correct, however, as several recent economic data show that the Chinese economy is not going downhill, but rather climbing upward.