Germany wouldn't like it
And everything that China buys, from oil to iron ore to semiconductors to Brazilian soybeans would cost 15% more.
And the ruble/yuan starts getting important for the LNG.
And the $3 trillion in dollar denominated corporate debt would require tens of billions more yuan to service, but sure the effect of the tariffs on their exports is muted.
Of course the inflation would create a bit of unrest,
China has 60 cities with a population over one million so imagine Hong Kong's protests times what 50? 100?
Hell, fair value is probably north of 9, onward comrade Xi.
From MarketWatch:
Aug 7, 2019 11:22 p.m. ET
Yuan midpoint set at 7.0039 per U.S. dollar, not as weak as some feared
China’s central bank set the daily midpoint for the yuan at its weakest level since 2008 early Thursday.
The People’s Bank of China set the yuan’s CNYUSD, -0.0042% reference point at 7.0039 against one U.S. dollar, according to Dow Jones Newswires. The bank allows the yuan to fluctuate up to 2% higher or lower than that level.
Reuters reported it was the weakest midpoint since April 21, 2008, and also the first time since 2008 that the midpoint has been weaker than 7 per dollar. The yuan’s midpoint had been set at 6.9996 per dollar on Wednesday....MORE
