Yuan little changed after Brexit decision
Print Edition
AS the world begins to assess the implication of Britain’s decision to leave the European Union and financial markets slide, China is one of the major economies likely to be least affected.
While the pound slumped to a 30-year low, the yuan was little changed at 6.62 to the US dollar. While European stock markets crashed, the Shanghai Composite Index closed down only 1.3 percent.
Analysts say it’s too early to gauge the full impact of the British exit because that is expected to take two years to complete. In the end, business transactions between China, the UK and the EU could cost more.
The 28-member European Union is China’s biggest market for imports and second-largest for exports. In 2015, the EU sent US$208.9 billion of exports to China, with the UK accounting for 9 percent of that.
The European Union Chamber of Commerce in China said it “deeply regrets” the outcome of the British referendum.
“The companies of EU member states greatly benefit from their operations in China in opening markets, defending the legitimate interests of European industry and negotiating trade and investment deals,” the chamber said in a statement. “It is hard to see how UK businesses will be better off now without this support.”
Japan, a popular destination for Chinese tourists, may become, at least temporarily, more costly as currency traders pile into the yen and out of sterling and euros. The yen touched a three-year high of 100 to the US dollar yesterday.
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