Friends today we will talk about Chinese Yuan and about the Chinese economy.

More and more began to recruit the popularity of the Chinese yuan. At the moment, 1 yuan costs about 18 rubles.

In cash, Yuan in Russia you will not buy (at least officially). Even if you open an account in the yuan in some bank, you can't remove this money, you will be given them in dollars.

Rare currencies give only up to 5,000, and if they really need them. In other cases, the Chinese yuan can only be used for speculation on the stock exchange.

At the moment, the yuan is very expensive towards the dollar in the 6.3 CNY area for $ 1. For 1 year, Yuan strengthened approximately 11.5%.

Strengthening yuan is unprofitable in China. The thing is that China exports a huge amount of goods abroad. Accordingly, when the country exports more than imported, it is not beneficial for a strong currency.

Such countries are trying to weaken their currency so that their products are more competitive in global markets. When exporting, companies earn in dollars, and spend in yuan.

Therefore, the Chinese government will strive to devalue the national currency.

But, if you devalue the yuan too much or if you begin to devalue it right now, it can lead to a great acceleration of inflation. Since imported products will be expensive, people will move to the spending model, and not savings.

Inflation in China is now about 9% (production inflation). The Government of China seeks to reduce this inflation.

Product inflation is completely different, consumer price index has grown by only 1.5%. Consumer prices in China have grown little due to the fact that the yuan has strengthened, and there will be elections in 2022.

Most likely, after the election, they will begin artificially devalue yuan. And it is possible that on the horizon for 2-3 years we will see the course in the 7 CNY area for $ 1. Since China's People's Bank can greatly affect the yuan course.

Main drivers for China's economy:

Laying monetary policy and reducing rates. This is a plus for the economy, but minus for the currency. Since, the currency is strengthened if the bet grows, and if the rate decreases the currency, on the contrary, weakens.

👉 in China, much faster remove the care restrictions than in the EU and the United States. And they want to develop a soft care policy now - it will also lead to an increase in the services sector. That is, internal consumption will grow, which is favorable for the currency.

The city government completed the main stage of the nationalization of the economy by regulating the major IT companies (Alibaba, Baidu). And here there are also certain risks, but they do not really affect the currency.

👉Chata took a neutral position in the conflict of Ukraine and Russia. China refrained from the UN voting on the condemnation of Russia's actions in Ukraine.

China encourages both sides of the conflict to the early start of the negotiation and completion of hostilities. At the same time, China believes that the sanctions that are introduced by the United States and the EU harm them to the same economy. It can be said that China made a condemnation of sanctions.

Will China perform sanctions imposed by the EU and the USA? A very big question is most likely partly.

On the one hand, Chinese banks have limited financing of transactions with goods from Russia. That is, large Chinese credit organizations stopped working with Russian suppliers.

But, on the other hand, in China, several hundred banks and, of course, do not keep track of everyone.

Plus, China still plans to buy Russian energy carriers in very cheap prices, since problems are possible with the realization of Russian oil and gas.

Of course, the EU will not refuse Russian oil. Nevertheless, its cost is significantly lower than the cost of the same Arabic oil.

China can now purchase Russian energy carriers cheaply and then resell them (this is a growth driver for the Chinese economy). Plus, China may be calculated with Russia for energy carriers just the same in the Chinese yuan - it should positively affect the course of Yuan.

Perhaps on the horizon of 2022 we will see a further trend on strengthening yuan (up to 6 CNY for $ 1).

But in any case, on a longer horizon 2023-2024, the devaluation of the yuan is expected. Since such a strong yuan still prevents the Chinese economy to develop.

For investment on the long term, the Chinese yuan is definitely not suitable. There is a very big and most important risk here: how the ruble had a risk with Ukraine, which was now realized, just also in China has a risk - Taiwan.

The official position of the authorities of China that Taiwan is part of China, just now she is not surpassed to him. And China always opposes the US on Taiwan.

Now we are more and more hearing statements from China that they are about to see the independence of Taiwan.

Simply put, China is preparing for war. And this war will be far from now, as is happening in Ukraine. Since, the Taiwan Army is 250,000 servicemen.

Moreover, Taiwan receives super-modern weapons from the US, and all soldiers are very well trained. Just so, China will not be able to capture Taiwan, it will already be a global operation.

Once the risks will increase regarding this operation to restore the territorial integrity of China, the yuan will be weakened in relation to the dollar.

That is, the investment in the Chinese yuan for the long term is unprofitable.

If you now have Chinese yuan, then you can consider selling them on dollars. If you can not change the Chinese yuan on dollars, then you don't do anything with them.

But keep in mind that, most likely, in 2023-2024, the Chinese yuan will be devalued, both on the part of the economy and from geopolitical risks.

There are doubts that China will capture Taiwan right now, because they saw what consequences on the example of Russia could be.

Now they want to take advantage of the current situation to earn as much money as possible. But it is possible when their elections will be held, the invasion of Taiwan will begin.

Although, judging by the statements of China's military officials, they are ready to attack Taiwan already in 2022. Maybe they will attack and this year so that Si Jinping increases the rating before the next re-election.

Accordingly, it is safe to say that buying Chinese yuan for a long time is definitely not worth it.

Today, thanks for your attention!

Put your finger 👍 If the article was useful for you. Subscribe to the channel not to miss the following articles.