Stronger RMB to benefit outbound travellers
By Liu Jie (China Daily)
Updated: 2005-07-29 06:16

The appreciation of the Chinese renminbi, or the yuan, should have a positive impact on Chinese nationals travelling or studying overseas. However, the impact will be small, and not immediately noticeable.

On July 21, the People's Bank of China, the nation's central bank, unexpectedly announced that the renminbi would no longer be pegged to the US dollar. Initially it will be traded at a rate of 8.11 yuan per dollar, down from 8.28.

"The rate adjustment is of course good news for outbound tourists and overseas students. As it is more valuable in overseas markets, Chinese travellers and students will get more foreign goods for the same amount of renminbi," said Wei Xiao'an, a researcher with the Travel Research Institute attached to the Chinese Academy of Social Sciences. He added that considering the 2 per cent adjustment is rather slight, the market response will be neither quick nor strong.

Chen Xiaobing, general manger of Beijing CAISSA International Travel Service Co Ltd, whose key business is European package tours, told China Daily that although the renminbi revaluation could lead to lower outbound travel costs, overall tourism costs will not decrease in the near future.

In general, overseas tour costs include airfares, hospitality and local shopping. According to Chen: "Destination expenditure will be lowered slightly, but this will be offset by the continuing rise in airfares, caused by soaring oil prices."