Finance & economics | Soft-currency power

The Chinese yuan is losing value, yet gaining ground

Low interest rates have a paradoxical effect

The skyline of Shenzhen, a city in China
Guangdong, where it all beganImage: Getty Images
|Hong Kong

China owes a lot to foreign investment. Long before Foxconn started making iPhones for Apple, manufacturers from Hong Kong tiptoed across the border to Guangdong in search of cheap labour. In 1982 Jetta, a toymaker, opened a spray-painting plant among the nearby lychee orchards of Dongguan, according to “Toy Town”, a book by Sarah Monks. Water for a shower was boiled in a wok; the plant was in a tin shack. At another firm, Ms Monks reports, the workers decided that Mickey Mouse’s nose should be red, not black.

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This article appeared in the Finance & economics section of the print edition under the headline “Soft-currency power”

From the November 11th 2023 edition

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