중 위안화 하락, 한국에 득보다 '실' China’s Yuan Could Fall 10% or More

원·위안 환율 5% 하락땐 

한국 수출 3% 줄어들어

"엔저에다 저위안 샌드위치 신세"

교역액 1조弗 시대 지속 비상등

source barrons.com

 

edited by kcontents 

케이콘텐츠 편집

최근 중국 위안화 가치 하락세가 우리 수출에 득보다 실이라는 분석이 나왔다.  특히 한국 수출은 엔저에다 저(低)위안까지 겹쳐 샌드위치 신세가 됐다는 지적이다. 이로써 지난 2011년부터 막을 올린 "교역액 1조달러 시대" 지속에도 비상등이 켜졌다. 18일 현대경제연구원은 "중국 위안화 평가절하의 국내 수출 파급 영향" 보고서에서 "원·위안 환율이 5% 하락(원화 강세)하면 우리 총수출은 3% 감소할 것"이라고 분석했다. 기계산업(-5.5%)이 가장 큰 타격을 받고 석유화학(-3.7%), 철강(-2.5%), 자동차(-1.9%), 정보기술(-0.3%) 순이다. 원·위안 환율은 이달 10~13일 사이 3% 급락한 바 있다. 홍준표 연구위원은 "우리의 대중국 수출 중 상당 부분이 중간재 수출이기 때문에 위안화 약세로 중국의 수출이 좋아지면 우리도 덩달아 호전되는 긍정적 경로가 있다"면서도 "그러나 중국이 부품을 자국 내에서 조달하는 비중이 높아져 긍정적 효과는 이전보다 작을 것"이라고 평가했다. 실제 우리의 대중국 수출 중 중간재 비중은 2000년 85%에서 2013년 73%로 낮아졌다. 반면 부정적 효과는 클 것으로 보인다. 휴대폰, 중소형 자동차 등의 분야에서 중국 제품의 경쟁력이 갈수록 향상돼 세계시장에서 우리 제품과 경합도가 높아졌다. 한국무역협회에 따르면 세계시장에서 한국과 중국 제품의 경합도(ESI)는 지난해 37.4로 2013년 38에서 소폭 하락했지만 2000년(34)에 비해서는 상승했다. ESI는 0부터 100까지의 값이며 100에 가까울수록 양국 수출상품 구성이 비슷하다는 뜻이다. 이런 상황에서 위안화 가치 하락은 중국 제품에 가격경쟁력이라는 날개까지 달아줄 수 있다. 홍 연구위원은 "외환시장 변동에 대한 미세조정 및 시장 안정화 대책으로 원·위안 환율 급락을 방지해야 한다"고 말했다. 또 "무역보험공사 등을 활용해 환 위험에 노출된 기업에 지원을 강화하는 등 대책이 필요하다"고 제언했다. 서울경제 이태규기자 classic@sed.co.kr

China’s Yuan Could Fall 10% or More

Up & Down Wall Street: History suggests that China’s currency devaluation won’t be a one-time move. More trouble ahead for multinational consumer stocks. 

By Randall W. Forsyth Updated Aug. 15, 2015 1:40 a.m. ET

On a sultry mid-August evening last week, world currency markets were rocked by what amounted to nothing short of a regime change: China announced a devaluation and freer float of its currency, the yuan or renminbi.

The move recalled an episode more than four decades earlier, on Aug. 15, 1971, when President Richard Nixon stunned the world by unilaterally severing the dollar’s last link to gold. Like the U.S. action at the time, China’s was portrayed as a measured, one-time adjustment that amounted to approximately a 3% depreciation in the currency. Just as America’s eventual moves would prove far more substantial, China’s might also turn out to be bigger than initially advertised, notwithstanding Beijing’s protestations to the contrary. The yuan could fall a total of 10% or more. 

China pinned its surprise devaluation on a desire to allow market forces greater play in setting the currency’s exchange rate. The shift came after signs of a sharp economic slowdown, including a steep fall in exports in July; a series of stimulus measures, including interest-rate cuts, to counter the slowing; and a sharp break in its stock market.

Last week’s depreciation of the yuan was but a fraction of the rise in the currency’s value over the past several years, which now appears to be weighing on China’s economy. China’s economic weakness suggests that further declines in the currency lie ahead. And as the yuan loses more value, there will be greater repercussions for the global economy.

The People’s Bank of China emphasized last week that the yuan had appreciated by 55.7% against its trading partners, after adjusting for inflation, since the currency was allowed to float in mid-2005. That’s well in excess of its roughly 33% appreciation versus the greenback until last week’s devaluation.

In a news conference last week, the PBOC described market commentary that China was seeking a 10% currency depreciation to boost exports “completely groundless and unfounded.” Beijing backed those words by actions, supporting the currency in the market later in the week. 

There are good reasons for Chinese officials to resist a sharp drop in the yuan, not least their longtime avowed aim to maintain stability above all. More substantively, the burden of Chinese corporations’ heavy debt load in dollars becomes even greater as the yuan loses value versus the greenback.

Even so, last week’s actions to lower the yuan look tiny relative to its previous rise and the loss of competitiveness. Japan’s yen has been effectively devalued by a third under Abenomics, albeit from a severely overvalued level. But at the same time, there have been sharp declines in the South Korean won, the Indonesian rupiah, the Malaysian ringgit, and the Vietnamese dong. Vietnam has undercut China as the low-cost producer in the region.

One wonders what a 3% adjustment in the yuan will do to spur China’s economy, which reported an 8%-plus year-on-year plunge in exports for July, in the context of the currency’s sharp previous appreciation. Granted, greater exchange-rate flexibility would complement the domestic monetary-easing moves since last year, including a series of interest-rate and bank reserve-requirement cuts, plus the various moves to prop up the stock market. But a 3% change goes only so far.

To a longtime observer of finance ministers and central bankers, the claim that the initial moves to tweak a currencies will suffice is a familiar refrain. The larger the underlying imbalance, the larger the eventual exchange-rate adjustment. And, seemingly, the louder the official protestations that no further dramatic moves are needed. 

Some rich, powerful money managers continue to trust in China’s leaders to maintain control, as they have through that nation’s remarkable economic revolution. But to skeptics, the Beatles ring truer: “If you go carrying pictures of Chairman Mao, you ain’t gonna make it with anyone, anyhow.”

Looking back at that fateful evening in August 1971, Nixon also portrayed the U.S. move as a one-time adjustment to protect U.S. interests against nefarious international forces. In actuality, he dumped the prevailing monetary order for the current nonsystem of currencies that neither float freely in a free market nor are stabilized with a fixed value. 

Today, the world remains in this neither-fish-nor-fowl environment in which governments manipulate exchange rates along with the other policy levers at their disposal—interest rates, tax rates, and spending. That is even as they insist the price of currencies is set by a free market, as are commodities such as wheat and copper.

To be sure, the analogy isn’t exact. The U.S. dollar was the linchpin of the Bretton Woods system in which the greenback could be exchanged for gold at $35 an ounce (by governments and official institutions only, not regular folks), while other currencies were defined in terms of the dollar. The yuan, by contrast, isn’t freely convertible and is only in the early stages of having a major international role.

But the same pressures that led Nixon to abrogate the U.S. promise to maintain the dollar’s international value figured into Chinese officials’ decision to end tight control of the yuan. Domestic considerations take precedence for any politician—in an authoritarian regime or a democracy. When a currency rate hurts more than it helps, it goes.

That has been the history of exchange-rate schemes, from the classic gold standard to Bretton Woods to Britain’s exit from the European exchange-rate mechanism in the early 1990s to the break of the currency pegs of Asian nations later in that decade. (The history of the euro is incomplete at this point.)

More recently, much of the world is engaged in what has been described, perhaps hyperbolically, as a currency war. Many nations, especially in emerging markets such as Malaysia to Brazil, have seen their currencies decline as their economies have faltered, notably as commodity exports have waned. Whether they have driven down exchange rates to gain advantage or allowed them to retreat, the changes smack of the competitive devaluations that exacerbated the Great Depression of the 1930s.

China had, until last week, seemed to stand aside from the fracas. Since July 2005, it had allowed a controlled float of the yuan and in recent years had permitted a steady appreciation against the dollar. But far from being an anchor, the greenback has successively sunk and floated higher, with the yuan following in its wake.

If there is a currency war, moreover, the U.S. arguably started it with repeated rounds of quantitative easing following the 2008 financial crisis, greatly expanding dollar liquidity and driving down the greenback. QE from other major central banks, including the Bank of England and later the Bank of Japan and then the European Central Bank, followed the same script. Then, currencies such as the Australian dollar slumped due to weakness in commodity prices, importantly driven by China’s slowing economy.

NOW THE EFFECTS are washing up on American shores. U.S. companies that sell to China will get hurt as overseas profits are translated back into dollars. As Fitch Ratings notes, these currency effects will only exacerbate pressures already being felt by consumer-product multinationals such as Procter & Gamble PG -0.5295908910366741% Procter & Gamble Co. U.S.: NYSE USD75.13 -0.4 -0.5295908910366741% /Date(1439931769335-0500)/ Volume (Delayed 15m) : 7323792 AFTER HOURS USD75.287 0.157 0.2089711167309996% Volume (Delayed 15m) : 122094 P/E Ratio 31.30547106129422 Market Cap 204879805433.884 Dividend Yield 3.529349128177825% Rev. per Employee 693445 More quote details and news » PG in  Your Value Your Change Short position (ticker: PG), which derives 8% of its revenue from China, and Colgate Palmolive CL 0.04433934377771209% Colgate-Palmolive Co. U.S.: NYSE USD67.69 0.03 0.04433934377771209% /Date(1439931641132-0500)/ Volume (Delayed 15m) : 2177825 AFTER HOURS USD67.69 % Volume (Delayed 15m) : 52905 P/E Ratio 27.184738955823292 Market Cap 60902935704.8292 Dividend Yield 2.2455310976510563% Rev. per Employee 443926 More quote details and news » CL in  Your Value Your Change Short position (CL) and Kimberly Clark KMB -0.16346898391121054% Kimberly-Clark Corp. U.S.: NYSE USD116.04 -0.19 -0.16346898391121054% /Date(1439931694461-0500)/ Volume (Delayed 15m) : 821579 AFTER HOURS USD116.04 % Volume (Delayed 15m) : 57053 P/E Ratio 67.46511627906976 Market Cap 42339683763.4353 Dividend Yield 3.0334367459496727% Rev. per Employee 455907 More quote details and news » KMB in  Your Value Your Change Short position (KMB). They have also seen a steep sales decline in Latin America.

China is inextricably wound into the global weakness in commodities, which is in turn weighing on U.S. corporate earnings. Standard & Poor’s Howard Silverblatt notes that 2015 operating earnings per share for companies in the S&P 500 index now are forecast to decline 1.1% from 2014 results.

But the impact of lower energy prices has been far more severe for the high-yield bond market. Energy credits make up a big chunk of the junk market, and as Gluskin Sheff’s chief economist and strategist, David Rosenberg, points out, the average yield in that sector has jumped 120 basis points (1.2 percentage points), to 7.3%, since May. That’s a move comparable to a 9% correction in the stock market; were that to happen, the S&P 500 would be down around 1910, not 2091.54, where it ended on Friday.

BCA Research further observes that high-yield energy debt now is trading at “distressed” levels, which is defined as 10 percentage points over comparable Treasuries (or 1,000 basis points of fright), as debt is at the center of the energy sector’s stresses. Hercules Offshore HERO 13.564668769716087% Hercules Offshore Inc. U.S.: Nasdaq USD0.072 0.0086 13.564668769716087% /Date(1439931600198-0500)/ Volume (Delayed 15m) : 2238355 P/E Ratio N/A Market Cap 10247785.4360322 Dividend Yield N/A Rev. per Employee 334679 More quote details and news » HERO in  Your Value Your Change Short position (HERO) filed a prepackaged bankruptcy on Thursday. 

 

http://www.barrons.com/articles/chinas-yuan-could-fall-10-or-more-1439617207

edited by kcontents 

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