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

Meanwhile, Wei pointed out that the lifting of the renminbi's peg to the US dollar resulted in closer relations with "a basket" of other currencies, increasing the risk that the impact of the yuan's rate adjustment may be impacted upon by the diversifying fluctuations of various currencies.

Chen estimated that the positive impact on overseas travel was unlikely to be seen in the next few months. The first wave is expected during the seven-day National Day holiday, and the subsequent trend is expected to be stable development.

According to a survey conducted by www.chinasurvey.com.cn, which sampled over 1,000 Chinese in nine cities, 56.3 per cent of the respondents said that the yuan revaluation is acceptable and they plan to travel and consume overseas.

Hong Kong, a popular overseas tour destination for mainland Chinese, will benefit from the renminbi appreciation, shopkeepers, hotels and other tourism-related businesses believed.

"Definitely, it will stimulate the Hong Kong retail market," said Bankee Kwan, chairman of the Retail Management Association, a trade group representing the city's shopkeepers. "More mainland travellers will come to Hong Kong to spend money, because it's cheaper than before."

Chen said the renminbi appreciation would affect inbound travel more quickly and more directly than outbound travel. He added that foreigners are more sensitive to currency fluctuations, a good example being US tourists.

"US visitors to European Union countries have witnessed a sharp drop over almost two years, due to the strong euro currency and sluggish US dollar. A similar phenomenon may occur on the Chinese mainland," pointed out Chen.