LOS ANGELES -Economic woes and the devaluation of the yuan in China are affecting the lives of some Chinese immigrants thousands of miles away.
Zhai Li of Pasadena, California, owns a consumer goods factory with her husband in Xi’an, Shaanxi province. Zhai and her son moved to Beijing so her son could attend primary school there. She brought him back to the US for middle school while her husband stayed in Xi’an to run the business.
“Usually my husband sends us money from China for living expenses. We make money in China and spend it here. I definitely don’t want the yuan to weaken because my son’s tuition fees and living expenses cost a lot every month,” Zhai said.
The Chinese yuan has fallen to 7.3 to the US dollar, a 10-month low and almost at the level of the 2008 global financial crisis, causing worry and uncertainty among some new Chinese immigrants living in the US.
“The factory back home is barely working since the pandemic, which has really affected our income. I am really worried,” said Zhai.
She said that in the past, if people had a little extra money, they would want to spend it on more expensive things. Since the pandemic, people have run out of money. Many of them only buy what they need and don’t necessarily buy brand-name products, Zhai said.
“If the Chinese economy continues to deteriorate, the rate will probably exceed eight. Then the yuan will be as worthless as a piece of paper,” said Chinese immigrant Liu Pingfei, owner of a used car dealership in Monterey Park, a Chinese enclave in the Los Angeles area.
Vicky Li, a Los Angeles businesswoman, is more fortunate. She has stores in Los Angeles and Guangzhou specialising in dry goods.
“When business is good in China, I usually exchange the yuan for US dollars. If business in the US is better, I will exchange the US dollars for the yuan and then use it to buy goods,” she said.
The yuan’s weakness “has little impact on me because my transactions are not very big, so it is still OK,” Li added.
Derek C. Tung has been a tax attorney, accountant and financial planner in Los Angeles for 34 years. He works with many Chinese immigrant clients. He said the weak yuan would affect the middle class the most, and he expected the Chinese currency to continue to depreciate, eroding the purchasing power of people who depend on the yuan, such as Chinese students studying in the US.
“If you are in the US not to invest but to study, and your parents are only working class, civil servants or ordinary workers in the private sector, with an annual income between 100,000 and 200,000 yuan ($13,666-$27,333), the weakening of the yuan will have a big impact on them,” Tung said.
Tung said he expected fewer Chinese to travel to the US and buy property for investment in the future. However, people will still invest on a smaller scale and buy primary residences, he said.
