You pick up your favourite toy you used while you were a kid when you notice that familiar yet unwanted tag- 'Made in China'.
One of the reasons why Chinese goods are preferred lies behind the way the Chinese currency Renminbi or more popularly called 'Yuan' is evaluated.
You see, currencies like Indian Rupee, American Dollar, GBP (Great British Pound) are traded openly in a separate market (also called as forex). This trading happens as long as each unit of currency holds a certain value against some other currency and this value keeps on changing.
I remember when I changed my Binocular with my brother for his geometry box (which I badly needed!). For my bro (who was 7 years old), Binoculars were like heaven. So he gave in.
That's whats happening with currencies. They trade when they hold value.
Now, in the last decade, for 1$ you could get 8.28 Yuan of work done! So as a company in US, I send more $'s into China. But later, in 2005, China valued Yuan to 8.11 Yuan/$. Now I am only able to get 8.11 Yuan of work done by my Chinese friends for my precious 1 $. It is at this point that I start focusing more on quality. I now start looking at countries which offer more quality goods.
One of the reasons why Chinese goods are preferred lies behind the way the Chinese currency Renminbi or more popularly called 'Yuan' is evaluated.
You see, currencies like Indian Rupee, American Dollar, GBP (Great British Pound) are traded openly in a separate market (also called as forex). This trading happens as long as each unit of currency holds a certain value against some other currency and this value keeps on changing.
I remember when I changed my Binocular with my brother for his geometry box (which I badly needed!). For my bro (who was 7 years old), Binoculars were like heaven. So he gave in.
That's whats happening with currencies. They trade when they hold value.
Now, in the last decade, for 1$ you could get 8.28 Yuan of work done! So as a company in US, I send more $'s into China. But later, in 2005, China valued Yuan to 8.11 Yuan/$. Now I am only able to get 8.11 Yuan of work done by my Chinese friends for my precious 1 $. It is at this point that I start focusing more on quality. I now start looking at countries which offer more quality goods.
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