JUDY WOODRUFF (NewsHour): Now to China’s decision to devalue its currency, the yuan. This effort to revive economic growth in the country shook up global markets today and sparked fears among U.S. exporters.
The decision to devalue had an instant effect: the yuan currency fell nearly 2 percent against the U.S. dollar, the most in a decade.
Beijing’s goal, to make China’s exports cheaper and boost an economy that’s been slowing markedly.
WOMAN (through interpreter): The export sector is facing great pressure. Inventories are high. Manufacturing, including investment, is facing overcapacity. So, in order to stop sliding export figures, we need to adjust the currency rate.
JUDY WOODRUFF: Indeed, China’s exports were down sharply in July, by more than 8 percent. Even so, reaction to the currency move was mixed on the streets of Beijing.
MAN (through interpreter): It should be a good thing for the people’s lives. Exports will be easier to export, and it will be easier to sell things.
MAN (through interpreter): In the short term, it doesn’t look like it will have any particularly obvious impact.
JUDY WOODRUFF: Meanwhile, the European Commission welcomed the prospect of a weaker Chinese currency.
ANNIKA BREIDHARDT, European Commission Spokeswoman: To the extent that the changes announced overnight reflect a shift in operating regime, allowing the daily fix to better reflect the balance of demand and supply in the foreign exchange market, we consider that this is a positive development.
JUDY WOODRUFF: U.S. exporters have long complained that China’s currency valuation is already too low, giving its goods an unfair advantage.
But, in Washington, the State Department was reluctant to criticize today’s move.
MARK TONER, State Department Spokesman: We have pressed China to continue financial reforms. And while we want to see additional economic reforms we believe that are needed, but we have seen progress. And that has included the recent commitments by China that were secured at the most recent security and economic dialogue.
JUDY WOODRUFF: China is the latest large economy to devalue its currency. In the past two years, Japan and the European Union took similar steps.
"What does the yuan’s decline mean for the U.S.?" PBS NewsHour 8/11/2015
Excerpt
SUMMARY: What does a weaker yuan mean for China and the global economy? Greg Ip of The Wall Street Journal and Orville Schell of the Asia Society join Judy Woodruff to discuss the economic and geopolitical factors.
"Sudden Chinese currency devaluation has global consequences" PBS NewsHour 8/12/2015
Excerpt
SUMMARY: Following market forces, China again devalued the yuan, rocking world stock and currency markets for a second straight day. According to some analysts, the change could hurt U.S. companies that do a lot of business inside China, like Apple and Coca-Cola. Judy Woodruff gets analysis from Eswar Prasad of Cornell University and Michael McDonough of Bloomberg.
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