Chinese currency revaluation benefits Vietnam's export, tourism

The revaluation of China's Renminbi (RMB) is beneficial to Vietnam's export and tourism, but has some side-effects on the country, local newspaper Young People reported Saturday.

The appreciation weakens China's exports to the United States and the European Union. That creates favorable conditions for similar Vietnamese exports, especially garments, textiles and footwear, to penetrate more deeply into the two markets.

Changes in the exchange rates of US dollar and Vietnamese dong against RMB will increase Vietnam's export to China, and slow down its import from the neighbor country, resulting in a smaller trade deficit, the report said. Vietnam exported over 2.7 billion US dollars worth of goods to China last year, and posted a trade deficit of over 1.7 billion US dollars.

The changes will also encourage tourists in China to visit Vietnam, which welcomed over 1.7 million international arrivals in the first half of this year. The number of visitors from China rose 5.7 percent to nearly 405,900, becoming Vietnam's biggest tourism market in the period.

However, the appreciation has some negative impacts on Vietnam. Loans to be borrowed from China will rise, the report said, noting that Vietnam received 315 million dollars worth of official development assistance alone from China. Local organizations and residents may shift to keep RMB instead of Vietnamese dong.

On Thursday, China revalued the exchange rate of the RMB to the US dollar by some 2 percent to 8.11. Over the past few years, the RMB has been pegged to the US dollar at the rate of one dollar for 8.27 yuan.

Source: Xinhua