China's Renminbi Devaluation Would Makes “Currency Wars” In World Market

On 11th Aug 2015, China carried out the biggest devaluation of the renminbi in two decades--The 1.9 per cent downward move by the central bank was its biggest one-day change. This move boosts China’s slowing economy, marking an escalation of international “currency wars”, surprising markets and risking a political clash with US.

The People’s Bank of China said the currency fixing will become more aligned with supply and demand. But foreign media said that this move has raised the risk of a “currency war”. According to Stephen Roach, former non-executive chairman for Morgan Stanley in Asia, he thinks Chinese “currency war” as export rivals seek a weaker exchange rate to stay competitive.

The move, coming as economic growth has flagged and the currency has been under upward pressure from its informal peg to the rising dollar, is in sharp contrast to policy during earlier times of stress when Beijing resisted pressure to devalue. This move is relatively increased the competitive of export enterprise such as Rech Chemical Co. Ltd and so on.