News / Asia

Chinese Currency Decision Could Boost Southeast Asia Trade

Southeast Asian economies could be among the first to benefit from China's decision to unpeg its currency, the yuan, from the dollar and allow a wider trading band.  Financial analysts see the potential for regional exports rising, both to markets outside Asia and to China.

Members of the Association of South East Asian Nations have seen China as a competitor as its industries have taken a greater share of global markets over the years.

But now, with China's recent decision to widen the trading band of its currency, Southeast Asia may benefit if the yuan rises in value.  Many economists and business leaders around the world have long complained that China kept the yuan artificially weak, making Chinese goods cheaper on international markets, and making imports more expensive in China.

Double benefit?

Tiziana Bonapace, a senior economist with the U.N. Economic and Social Commission for Asia and the Pacific (ESCAP), sees a double benefit for industries in Southeast Asia if the yuan slowly strengthens.

"Southeast Asian economies are competing on the basis of costs with China - that these products in the immediate future have a cost advantage because they become relatively cheaper because the yuan has appreciated," Bonapace said.  "Then the expected increase in demand for imports from China will result in increased exports of Southeast Asian economies to China."

Two years ago, when the global financial crisis began, China essentially pegged the yuan to the dollar and ended any appreciation of the currency.  But many Southeast Asian currencies rose against the dollar and other major currencies, making their exports less competitive.

Slow progress

Sunday, Beijing announced the yuan would no longer be pegged and it widened the range the currency could move against the dollar.  But many foreign exchange market experts have said they expect the yuan to appreciate only slowly.  As if to confirm that, the yuan has weakened slightly this week.

In the past year, ASEAN has strengthened its ties with China through a free-trade agreement.  The expanded trade, analysts say, will further boost economic integration in East Asia.

Thailand Trade Representative Office president Kiat Sittheeamorn
Thailand Trade Representative Office president Kiat Sittheeamorn

Thailand Trade Representative Office president Kiat Sittheeamorn says currency markets also will shift to better reflect the economic conditions of the countries in the region.

"Currency regimes are meant to reflect the fundamentals of the economy," Kiat said. "With the potential strengthening of the yuan I would say that exports from Thailand could be most beneficial in terms ... and also from ASEAN countries because we have ASEAN China [free trade] agreements so that the whole ASEAN 10 countries could benefit from higher exports."

Trade between China and ASEAN now tops $100 billion and during the past few years as grown at more than 20 percent annually.

You May Like

Could Nemtsov Threaten Putin in Death as in Life?

Dynamic and debonair opposition leader had supported liberal economic reforms, criticized Russian president's aggression in Ukraine More

Oil Smuggling Highlights Challenges in Shutting Down IS Finances

Pentagon spokesman says Islamic State 'certainly continues to get revenue from the oil industry black market' but that airstrikes have made a dent More

India Focuses on Infrastructure, Investment to Propel Economy

Government expects economy to grow at 8 to 8.5 percent in next fiscal year More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More