An interesting chart indicating a potential place for an (orderly) devaluation of the Chinese currency. How to help the local economy? You can stop publishing the youth unemployment rate*, or copy your neighbor's idea and devaluate your own currency.
To improve your competitive position, you can either devaluate your own currency (external devaluation), or reduce real production costs, including wages, or increase productivity (internal devaluation – more “painful” for society).
No need to mention that a possible devaluation of the yuan could have far-reaching consequences for investors...
* China stopped publishing the jobless rate for people between 16 and 24 in 2023, when this rate reached 21.3% in June 2023. Then it returned to publishing it from December 2023, but according to the new methodology (for December 2023 it was only 14 .9%).
Comments