Trade Depreciation Eroding Chinese Orders?

Sustained

Vietnam has devalued the Vietnam shield for four times in the past 15 months.

In November 2009, it depreciated 5.44% in one place and 3% in February 2010 and 2.09% in August respectively.

The International Monetary Fund and Citigroup warned that the depreciation of the Vietnamese shield could trigger a chain reaction in Asia, and the market did not rule out the possibility of the Vietnamese shield's devaluation again.

What impact did the devaluation of the Vietnam shield have on China? Vietnam maintained an average annual growth rate of around 7% in 1986 to 2006, next to China only.

The rise of the "Asian tiger" relies on cheap labor and abundant natural resources, which are threatening China's low-end manufacturing exports.

Take the footwear industry as an example. In the first two years, a shoe factory worker in Vietnam had a monthly income of about 500 yuan, while workers in Chengdu, Sichuan, had a monthly income of at least 1000 yuan.

With the acceleration of RMB appreciation, Vietnam's price advantage is more and more obvious.

Chinese textile exporters have already felt that orders are shifting, as 31% of respondents said they would increase purchases from Vietnam, one of which is that Vietnamese products are cheaper than Chinese products by 30%.

It is not hard to imagine that the devaluation of Vietnam shield will further "erode" the market share of China's similar export products.

Chile, Argentina, Brazil

Developed into a developed country in 2020?

Although most people believe that the next 10 years will be the Asian era, there are also many institutions like standard & Poor's and the world bank in recent months who are optimistic about the Latin American economy and think that the next 10 years may also be a Latin American era.

The United Nations Economic Commission for Latin America expects that the region's economy will grow by 4.2% this year.

Last year, Latin America's economy grew by 6%, much higher than that of Europe and the United States.

Chile's former Minister of Finance and foreign affairs even believes that Uruguay, Chile, Brazil, Argentina, Mexico and Columbia will become developed countries before and after 2020.

Recently, S & P has raised the sovereign credit rating of many Latin American countries.

Following Chile and Mexico, Brazil, Peru and Panama also became "suitable investment" countries.

Standard & Poor's believes Latin America's economic growth is not just due to China's massive imports of raw materials in the region.

The proportion of poor people in Latin America has dropped from 48% in 1990 to 32% in 2010, and the stronger economic middle class in the process has supported the development of domestic economy.

However, some people are skeptical about the future of Latin America: Latin America's growth rate is less than half of that of China and India; inflation in Venezuela and Argentina remains high; the crime rate in Mexico, Central American countries and Venezuela is high; the level of education and innovation in the region is much lower than that in other parts of the world.