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The problems in china is different from the problems in Egypt. China is known worldwide for it’s cheap stuff, that’s why a lot of counties import from China, but if the Chinese currency (yuan) went up, the importers will not buy anything from China and that’s whats the USA is trying to do so that people would buy from them instead of from China. In Egypt it’s totally different, because Egypt mostly import so the Egyptian currency is very low. Egypt is a country that hardly exports that’s why if their currency went up, it will only effect the Egyptian economy, but it won’t effect any other country.

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In this case, China is very different from Egypt. China on purpose wanted to be a worldwide exporter country so that the value of their currency would be cheap so that many countries would be able to buy from them. USA is trying to increase the value of the Chinese currency so that less countries would buy products from China and more people would buy from the USA. However, Egypt is struggling with the currency drop since its an importer. Unlike Egypt, China is an independent country that has more value to their currency.

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In this particular situation. China is extremely different from Egypt beacuse before the floation people saw the chinese currency as a very cheap currency on the contrary people saw the egyptain currency as an expensive currency. This was very good for china beacuse a lot of countries imports from china due to how "cheap" its currency snd products. But if we analyze Egypt we would come to a conclusion that the the amount of countries that we will end up exporting to are nothing. we don't have products to export neither our currency is strong, that makes the egyptian pound nothing.

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The situation in china is different from the sittuation of the flotation of the egyptian pound in Egypt. Many countries import goods from china (especially USA) because of its cheap price. If the yaun rises, countries will lose interest in chinas goods. On the other hand the situation in egypt is different. The flotation of the EGP will help the economy if investers, invest in Egypt. Other countries that Egypt imports from, will not get affected if the dollar is cheaper. If the dollar in egypt is very low, Egypt will start importing more goods. Also other countries will start investing im Egypt

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The situation in China is really different from the situation here in Egypt. China is a world wide recognized exporting country. This is because its exchange rate is so low, that many companies buy from china a lot of products. On the other hand, here in Egypt this is a total different situation. Egypt has been an importer for many years and still is. with the flotation making the exchange rate lower, many companies and factories are not able to buy products that can be sold or manufactured here in Egypt. However, it is somehow similar, as the future hope is to attract foreign investors to come here to Egypt, as for them, exchanging to Egyptian pounds just means more money for them. This is the only similarity. Therefore, it is really different as Egypt is a major importer and China is a major exporter.

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The Chinese are trying to make the Yuan much more valuable and therefore making trading much better in China. Also the Chinese government are trying to make their currency much more worldwide like the US dollar. In Egypt however the currency is losing value and that is hurting the economy, this will also affect the trading because if the currency loses value it will not be valuable to the other countries. The difference between the two governments is that the Chinese government is doing it to help their own government but the Egyptians are doing it to make their currency better but that isn't working so that's why the government is falling

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China and Egypt are very different in terms of curreny floatation. In China they decided to do this on purpose. Even though it has some cons, it still has many advantages. It promotes new types of investment in china. On the other hand, Egypt does not have a purpose for doing so. This is because egyptians are struggling since they cannot afford to buy products because everythig is very expensive. However, in china, people do not suffer from poverty, so currency floatation would not affect them drastically as much as it affects egypt. The usa will be affected as well if china keeps its currency low. This is due to everyone exporting from america

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There is a difference between both china and egypt. China made there products cheap unlike egypt. The egyptian are struggling because of the float of the pound unlike china they did this on purpose. While the yaun is having a good currency. And that there is both importing and exporting to the us and eu. There are also some disadvantages to this for china if there production starts to decrease fhe country will start losing.

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Yes, the situation in China is a lot more different the situation in Egypt. Everyone, thinks that the chinese currency is very cheap, yet before the egyptian pound floats everyone thought the egyptian pound is so expensive. That is a great difference between both situations. Also, The chinese are using the floatation to their own good. Everyone, imports products from chinese since people prefer cheap over quality. However, the US will not benefit from that if the chinese currency stayed low, because if it stayed low everyone in the US would prefer to export from china. Yet, if the chinese currency increased and became more expensive. Now, US would benefit from that because everyone would choose to buy their products/goods from US, and they won't need to import from China since, the prices are now similar and Us products have better quality. However, the floatation her differs fro egypt to china because as we can see, China is using that to its own benefit they are typically doing that on purpose. Yet, Egypt is suffering now from what happened (the floatation of the Egyptian pound), is horrible for our economy now since, we don't have any kind of products to export, so countries like the US and UK they don't need anything from us that makes our currency even worse.

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In this case, China is the strong exporter country, with a devaluated currency. They are thinking about floating the Yuan, and that would affect them and also benefit US and European exports. If they float the currency, the Chinese exports would get hurt and other countries would not be able to buy their cheap and good products. The Chineese are looking forward to make their currency stronger as all countries think it's a cheap currency. Egypt and China have signed agreements that they will be using their own currencies, and not the USD. Therefore, this will affect the US dollar and make the Chinese and Egyptian currencies more available and easier for tourists.
Therefore, Egypt is an importer country and they are trying to motivate their Local products and this will give many people chances to work. China is an exporter country and they are trying to make their currency stronger by floating the Yuan.

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You cant compare the flotation that happened in Egypt to the flotation that happened in china. Because China is a country that exports to all of the world, china did this on purpose because they wanted their value of their currency to go down because they wanted more countries to buy things from them. The USA is trying raise the value of the Chinese currency so less people buy from China and more people buy from the USA. On the other side USA wants the Egyptian currency to go down because everything will be 50% cheaper for USA. China is also known for exporting so when the people see that their currency is so low and they copy everything exactly the same so its cheaper for all the countries around the world to buy from them. But Egypt is known for importing everything and they never export

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The currency floatation issue in China is not similar to the case in Egypt, the chinese people are a manufacturing power and the USA are importing most of their products. The yuan is getting stronger and it was cheap on purpose because they want people to pay and purchase their goods in a cheap pricing and affordable ways.

The Chinese government want to put barriers for the US investors, that want the Yuan cheaper and the value of the dollar will not be as important as t. Which will boost the prices and demand on the Chinese Yuan which will become a world leading hard currency in the future. The Chinese government is willing to make agreements with strategic partner like Egypt in order to give them the products made in China that have such a high demand and it will be all in the Yuan currency which will help give the Yuan more value.

Finally, Egypt is an importer, consumer country that doesn't have any workforce or production lines that will help them do their own products but China is dependable on itself therefore they are willing to give their currency more value

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Read the Article to answer the question on top of the page.

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Each year brings new mutterings that China is interested in methodically dismantling currency controls that keep the yuan pegged to the dollar with the eventual goal of making the yuan a (more) freely convertible currency.

It's a wonderful thought, but to be fair we're probably still a long way off from that ever happening. China initiated a currency peg to the U.S. dollar back in 1994, in an effort to secure their spot as the world's leading exporter. With a weak yuan, China's exports have remained competitive on a global level ever since and developed countries like the U.S. have exported hundreds of thousands (perhaps millions) of low-skilled manufacturing jobs there as a result.

What's lost in domestic manufacturing for developed countries, like the U.S., is gained in cheaper imports of goods and the cheaper manufacture of higher-end goods (since some parts are sourced and built in Chinese plants then brought back to the U.S. for final assembly). It's not a perfect model, and politically it's a sticky issue (since jobs are lost), but all things considered there's a net economic benefit - the U.S. (and global) consumer gets lower prices and the Chinese economy has seen blistering growth over the last 30 years. Taken together, this has provided an overall boost to the global economy and lifted a lot of other ships with it like Emerging Markets economies and stock prices.

Some of you might be thinking, sure, but isn't this still just plain and simple unfair trade? China manipulated its currency to keep its goods hyper-cheap relative to the world and essentially created a monopoly on manufacturing in the process. A lot of people here are out of work as a result.

This is true, and it's why the U.S. has put political pressure on China over the last decade to allow its currency to appreciate - something I believe China should absolutely do. But at this stage, we have to also be very careful about "biting the hand that feeds us," so to speak. A rapid appreciation of the yuan could mean goods made in China become more expensive, a cost that will likely get passed to consumers (you). Additionally, a stronger yuan would mean a slowdown of Chinese manufacturing, which makes up over 25% of its economy. If China weakens substantially, the global economy will feel it and it could hurt global growth and stock prices.

If it sounds like a Catch-22, it's because it is. But it's only a Catch-22 if the yuan rapidly and sharply appreciates against the dollar. What I would rather see is a gradual move toward greater flexibility, much like China started back in 2010. By some estimates, the yuan could be undervalued by 25%, so moving the trading band by a few percentages each year could be a smart solution to leveling the playing field, and to making removal of the peg easier when that day finally comes.

Currency hardliners would like to think that the solution is as simple as, "let the currency float and the free market will handle the rest." But it's not that simple - considering these pros and cons below will underscore why.
Pros to Letting the Yuan Float

Cons to a Rapidly Appreciating Yuan

Helps U.S. Exports - and European exports, for that matter. If the playing field is leveled and all of a sudden China may not be the best solution for cheap goods and production, the attractiveness of U.S. and European goods inherently rises. That could even lead to some manufacturing jobs returning to the U.S.

Promotes New Types of Investment in China - if China and multinationals lose their "subsidy" for expanding the manufacturing sector, it could free up capital for investment in other areas like expanding the service economy and promoting domestic consumption.

Empowers the Chinese Consumer - speaking of domestic consumption, the middle class in China is one of the fastest growing demographics in the world. If their currency goes a longer way towards purchasing goods in the global economy, everybody wins.

Creates New Wealth for Emerging Industrial Countries - if the cost of manufacturing in China rises with a rising yuan it could open new doors for other industrial nations with cheap labor, like Mexico and Vietnam. If there's one thing you can be fairly certain of, it's that multinationals will find a place with cheaper cost of production and move there. Doing so could help an emerging economy really gain steam and create new wealth.

Chinese Exports Hurt - If the manufacturing boom slows or even contracts, it could affect China's overall growth rate. As the second largest economy in the world, China is a hugely meaningful component to global GDP. Softening global GDP could threaten stock prices.

Softens China's Demand for U.S. Treasuries - China sells yuan and buys dollars to control the currency, but they recycle those dollars to buy U.S. Treasuries. Doing so helps the US finance our budget deficits. If the yuan floats, Chinese demand could sap.

Higher Production Costs for Some U.S. Multinationals - as production costs rise, those could get passed along to the consumer. Over time, those multinationals will likely seek cheaper production and move operations (a positive), but in the short term it could affect prices.

The Bottom Line for Investors

Having the yuan float is a tricky issue - both economically and politically - and I'm not sure there's a perfect solution. Regardless, the bottom line is that any change will happen only gradually, which should give the market plenty of time to digest the economic effect one way or the other. If the announcement comes that China is ready to move the trading band for the currency again, or even ready to let it float, I think there will be some clear winners and losers to emerge and investment implications would likely apply. Until then, it's a wait-and-see.

Regardless of whether China decides to float its currency (or not), its power comes from exports to America. But, what is the outlook for U.S. markets and our domestic demand? What are Zacks' predictions concerning Exports, Imports and Net Exports?

You are invited to find out by immediately downloading our newly released May, 2015 Market Outlook.

It includes the first forecast prepared entirely with our new macroeconomic model, MA/US 2015 and contains some surprising twists. There are opportunities, but also some ringing alarm bells regarding growth, the upside of the S&P 500, and, yes, China. I strongly encourage you to read it.

Free Download: Zacks' May, 2015 Market Outlook

All the Best, and Better Returns!

Mitch

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What Would Happen if China Decided to Float its Currency?

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Each year brings new mutterings that China is interested in methodically dismantling currency controls that keep the yuan pegged to the dollar with the eventual goal of making the yuan a (more) freely convertible currency. It's a wonderful thought, but to be fair we're probably still a long way off from that ever happening.