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Exporters fear business will suffer if wages soar or the yuan rises fast.
I have also been informed that American visitors to China can deposit $50,000 a year in a Chinese bank account denominated in yuan, which will grow in value as the yuan rises.
BEIJING (Reuters) - China will not tolerate any sharp yuan rises to shield local exporters, limiting annual appreciation to 3percentt in the next five years, a senior central bank official was quoted by local media as saying.
If the yuan rises as the dollar goes lower, it's beneficial for the profits of US multinationals like Apple, Proctor & Gamble, and Colgate Palmolive, that sell their products to China.
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Speculation that China might let the yuan rise faster is one reason.
As investors' flight to safety strengthened the dollar in late 2008, the yuan rose along with it.
Suppose that overnight the yuan rose by 30%, what would happen?
Thursday, the yuan rose 0.37percentthethe largest one-day increase since the peg ended.
By comparison, the yuan rose just 3.3percentt against the dollar in 2006.
A better solution would be to let the yuan rise more quickly, which would curb the prices of imported foods.
Despite its decision to let the yuan rise 21 percent against the dollar between 2005 and 2008, China has remained a favorite target of Congress.
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CEO of Professional Science Editing for Scientists @ prosciediting.com