Impact of the Fed’s Rate Cut on China’s Imports and Exports

Xiao Huang:DOORM, what impact will the Fed’s rate cut have on China’s imports and exports? What specific changes can we expect?

DOORM:The Fed’s rate cut will lead to an appreciation of the Chinese yuan against the US dollar, which will have mixed effects on China’s trade. On one hand, a stronger yuan will increase the pressure on Chinese exports by making them more expensive and less competitive in international markets, posing a challenge for export-dependent companies. On the other hand, the appreciation will lower the cost of imports, potentially reducing production costs for businesses and promoting domestic consumption and investment.