China’s Export and Greece Push Back Revaluing of the Yuan

Merchandise exports grew 30.5% in April, ahead of market expectations of when the nation would return to a surplus. Seemingly, the global economic slump and the Greek debt crisis have affected China very little. So far, China's exports seem to be handling well one result of the Greek crisis: a stronger currency. The Chinese yuan is now up more than 10% against the euro since November, a consequence of the yuan's link to a rising U.S. dollar, and even though it would seem that this rise would make buying Chinese goods a bad idea, since they are more expensive now, China’s exports to the European Union are up.

That is at least for the time being. The enormous bailout package given to Greece might force European nations to scale back translating into a weaker demand for Chinese goods. If Europe slows its imports from China, policy makers in Beijing will be extremely reluctant to appreciate the yuan. The problems in Europe could also keep other countries from increasing pressure on China to move its currency, which the U.S. is hoping will happen soon.