May 30th, 7:44
China’s yuan has hit a record high against the US dollar after the US Treasury department said the Chinese currency was undervalued but not manipulated.
The People’s Bank of China (PBOC) fixed the yuan’s mid-point at 6.4856 against the US dollar on Monday.
China has been accused by the US and other developed economies of keeping the value of its currency artificially low to boost its exports.
China is the world’s biggest exporter.
The US and other major economies have said that China’s policy of keeping the value of its currency low gives an unfair advantage to its manufacturers.
There have also been concerns that China’s currency policies have also been responsible in part for big trade imbalances with its trading partners.
They want to do it in a way that is sustainable and gradual. A way that gives Chinese exporters enough time to adjust. The Chinese economy has to be in a position to absorb the appreciating currency”
Peter EshoCity Index
There have been repeated calls in the US to label China a currency manipulator, given Beijing’s currency policies and reluctance to let the yuan trade freely.
China however has maintained that while it is willing to allow the yuan to appreciate, its pace has to be gradual.
It said that a sudden rise in the yuan will not only be detrimental to its export sector but will also have a negative impact on the overall economy.
In its report released on Friday, the US Treasury Department said that although China’s currency was undervalued, the country was not a currency manipulator.
Analysts say that while there has been considerable pressure within the US, it seems that the Treasury Department had taken on board China’s concerns about a sharp rise.
“Manipulation carries negative connotation. The intention is to mislead”, said Peter Esho, chief market analyst at City Index.
“They are acknowledging that their (China’s) intentions aren’t to mislead,” he added.
In an attempt to show its intent on letting the value of its currency rise, China loosened its peg to the US dollar in June 2010.
The yuan has gained more than 5% against the dollar since then.
However the US Treasury report said that the rise has not been up to their expectations. “Treasury’s view… is that the progress thus far is insufficient and that more progress is needed.”
Many analysts are of the view that China is trying to make sure that the appreciation in its currency has the minimum impact on its economy.
“They want to do it in a way that is sustainable and gradual,” said Mr Esho.
“A way that gives Chinese exporters enough time to adjust. The Chinese economy has to be in a position to absorb the appreciating currency”, he added.
Mr Esho also said that since China is so reliant on its export sector “the government will not let exporters suffer, just to appease foreign concerns.”
China’s currency policy has not only created problems with its trading partners. It has also contributed to domestic problems.
Inflation in China has been rising sharply as the costs of oil, food and other essential commodities continue to spike.
Consumer prices rose by 5.3% in April compared with the same month a year ago.
Analysts say that while China has to take care of the interests of its export sector, it has also got to keep in mind that a lower valued currency makes imports more expensive and adds to inflation.
“I think really it’s a balancing act. If the currency is undervalued you’re going to have inflationary pressure on your economy,” said Mr Esho.
“That will eventually be a hindrance to growth and that’s China’s biggest worry,” he added.
The last space-walk in the 30-year history of the US shuttle programme has been completed at the International Space Station.
Astronauts Mike Fincke and Greg Chamitoff’s seven-and-a-half-hour walk completed Nasa’s part in constructing the ISS.
The astronauts will return to Earth in a few days on space shuttle Endeavour’s last voyage.
One final shuttle is scheduled for July to bring supplies to the ISS.
The BBC’s Tom Burridge in Washington says the ISS is now the size of a football field and can house six full-time residents who spend their time conducting scientific experiments and research conditions for possible longer missions, such as travelling to Mars.
Astronaut Chamitoff said before ending the 164th and last shuttle space-walk: “Twelve years of building and 15 countries and now it’s the Parthenon in the sky and hopefully the doorstep to our future. So congratulations everybody on assembly complete.”
As he attached the final 50ft (15m) boom, he said: “Amazing. Boy, this is a big space station.”
Endeavour is scheduled to return to Earth on Wednesday.
It will then be prepared for public display at the California Science Center in Los Angeles.
Russia still plans to carry out space-walks at the ISS, adding at least one more chamber to the structure. Those in the station will also carry out walks as necessary.
Russia will also ferry astronauts to the ISS.
Breaking News on Social Media
Social networking is apparently becoming the preferred way to break news.
Soon after President Barack Obama told the world that the United States had killed Osama bin Laden, the Newseum asked on its Facebook page:
“How did you hear the news that Osama bin Laden had been killed?”
Of the 140 responses, social media had a slight edge over people who heard the news through other means.
- 36 percent from Facebook and Twitter
- 31 percent from television/radio
- 17 percent from text messages/cellphones
- 15 percent from others
The comments were just as varied.
- “Twitter. All over Twitter. Way before elsewhere.”
- “I was surprised to see a friend’s post on Facebook.”
- “News alert to cellphone about 4 a.m.”
- “In my car, listening to WTOP all-news radio.”
A man in Abbottabad, Pakistan, unknowingly told the world about the clandestine raid on bin Laden’s compound through a tweet. Rumors of his death were also spread on Twitter.
The al-Qaida leader’s death, and the rapid way the news was spread, will be one of many news events featured in the Newseum’s newest interactive gallery — the HP New Media Gallery — which opens in 2012.
The HP New Media Gallery will show how technology has drastically changed the collection and dissemination of news. Included will be touch-screen walls that will allow visitors to see the news in real time and interact with newsfeeds.
The Time Out New York Lounge will present the finale of Fashion Forward, New York’s only fashion design competition / AIDS benefit – Wednesday May 25th (at 11PM) at New World Stages. A fabulous runway show of emerging NYC designers presenting their looks and competing against each other, followed by concert performances by night life favorites has been a great success. All designs are auctioned off at the end of each night with proceeds going to DIFFA (Design Industries Foundation Fighting AIDS), along with the proceeds from the door.
Hosting the finale will be nightlife cabaret star Marti Cummings. Broadway favorites Nicholas Rodriguez (the title role of Tarzan on Broadway, “One Life to Live,” Sex & the City 2, The Toxic Avenger) and Paul Canaan (Legally Blonde, Chitty Chitty Bang Bang, La Cage aux Folles, Thoroughly Modern Millie on Broadway, Sex & the City 2, “Legally Blonde: The Search For Elle Woods,” LOGO’s “New Now Next Awards”) will perform.
The Ultimat After-Party, sponsored by Ultimat Vodka, takes place after every show at the Time Out New York Lounge from 12:30am – 3am. Fashion Forward began Wednesday, May 4th. There is a $5 cover charge which will also be donated to DIFFA. The Time Out New York Lounge is located at New World Stages, 340 West 50th Street (between Eighth & Ninth Avenues).
A winner has been determined each week by audience votes and the finale on May 25th will feature multiple looks from each week’s winner. Prizes will include a solo Runway Show at New World Stages, cash and more! Hosted by Valentine, along with celebrity guests and live entertainment, this is sure to be the hottest new fashion event of the year! Design contestants are allowed to spend no more than $20 per look and must use previously owned materials. For more information or to sign up for the competition please visit http://www.bestredbottomshoes.com
The Time Out New York Lounge also features HAPPY HOUR Monday through Friday evenings from 8pm to 10pm: your second drink is free! There are Drink Specials every night as well!! There’s never a cover or minimum!