Maos for Benjis: Chinese Money is HereJanuary 18, 2011 - 11:45 AM | by: Eric Shawn
The Chinese currency war has invaded America.
A major issue that will be discussed during Chinese President Hu Jintao’s visit to the White House is the disputed value the Chinese currency, the yuan. Yet people can now get the yuan right here.
The state run Bank of China now lets customers exchange dollars for the Chinese money at the branch in New York City’s Chinatown. So instead of withdrawing greenbacks with George Washington or Abraham Lincoln, you can now stuff your wallet with money that has the engraved portrait of Mao Zedong.
Account holders can cash in up to $4,000 a day, with the limit of 20 grand a year. If you don’t have an account, you can only cash in half those amounts.
Analysts say letting Americans buy the Chinese currency is a way for China to expand the yuan as a global force and spread its influence, at a time that Beijing is under heavy criticism for undervaluing its currency by what is estimated as much as 40%
“I think it’s largely a symbolic gesture,” says Alec Young, an international equity strategist at Standard And Poor’s. He notes that the trade is limited to one branch, of one bank, and not at thousands of branches of an American bank. Yet he does call offering the Yuan here an incremental step for the Chinese.
“China is still a very export driven economy although they have tremendous domestic potential with their huge population and growing middle class. The average Chinese person still only makes two or three thousand dollars a year so their economy really is dependent on exports to drive it and that requires a cheap currency,” says Young.
China has taken other steps to boost the yuan against the dollar.
Its currency has risen by about 25%, and the government has even limited imports that are not designed in China, which analysts say hurts U.S. Exports. Chinese officials have even called for replacing the dollar as the standard of global currency.
And now you can buy the yuan here, even if it is only at one place.