LAWRENCE – A University of Kansas international business professor is available to talk about the macroeconomic issues involved in China’s economic slowdown and the devaluation of its currency, the renminbi.
Tailan Chi, the Carl A. Scupin Faculty Fellow and Academy of International Business Fellow, has been following the dramatic swings in the global financial markets.
Chi said the Chinese government saw an opportune time to achieve two policy goals with one stroke. By using the previous day’s closing rate in setting the benchmark exchange rate for the renminbi each day, the Chinese government will allow the market to play a greater role in influencing the daily fluctuations of the currency and move closer to a market-based mechanism for the determination of the exchange rate, which both the IMF and the US government have been urging the Chinese to do.
“Because of the recent changes in market conditions, the trend of the market is likely to push the value of the renminbi downward, giving the struggling Chinese exporters more breathing space and boosting the slowing economy,” Chi said.
Chi said the market was surprised by the move and inferred that the People’s Bank of China (PBOC) might have seen a more rapidly worsening economy than previously thought and had become desperate in shoring up the export sector to arrest the downward economic slide.
“Consequently, the market initially reacted very negatively to this move and only recovered in the last couple of days,” Chi said. “The PBOC is likely to accompany future adjustments in the value of the renminbi with more vigorous press activities to present their reasoning in a clearer and more persuasive manner.”
Chi recently spoke at two international conferences, the Academy of International Business in Bangalore, India, and the annual meeting of the Academy of Management in Vancouver, Canada, on macro institutional changes and their implication for corporate governance. He is a consulting editor for the Journal of International Business Studies and an editorial board member for Strategic Management Journal, Journal of World Business and International Journal of Strategic Change Management.
To speak with Chi, contact Christine Metz Howard, KU News Service, 785-864-8852, firstname.lastname@example.org.