Effects of China’s Weaker Currency Felt in NYC

Travel agent Rickie Ye says more Americans and Chinese here are traveling to China because of the weaker Chinese currency. (Photo by Daqi Liu via World Journal)

In the past six months, China’s yuan has been been losing its value, and so far it has fallen 10 percent against the U.S. dollar. Many Chinese in the U.S. are feeling the heat, especially people in the tourism industry, which has been affected a lot. [The currency is also referred to as RMB for renminbi, which literally means “the people’s currency” in Mandarin.] On the one hand, fewer Chinese are coming to the U.S. and those who come spend less money. On the other, more people are purchasing plane tickets or join tour groups to visit China. “Those who could not afford first class before are tempted to treat themselves now,” said industry insiders.

One dollar now buys 6.8 yuan compared to 6.3 in March. Recently, it was even close to 7 against the dollar at certain points. Rickie Ye, in charge of Yes Holidays, a tourism agency in Flushing, said the yuan’s weakening is accelerated by the trade war between China and the U.S.

To tour agents like Ye who offer tours in the U.S. and in China, the yuan’s devaluation gives them a bittersweet taste. Ye said the number of orders for its services in the U.S. that the company received from partners in China is much lower than the same time last year. He said the summer normally is the high season. The hotels the company contracts with usually have full occupancy during this time. Now several of them still have rooms available. The hotels already offer a discount to the company’s guests. But some tourists from China, after exchanging currencies, still complain that they are too expensive.

Meanwhile, the summer is also the high season for Chinese in the U.S. to go back to the country to travel around or visit their families. Ye said his company received more orders from these clients for plane tickets to China, and they tend to spend more than they normally do. “The American tourists who join our China tours are happy because the prices are lower, and they can pay some items in RMB,” Ye said. “Some people who never purchased first class before now are doing so.”

Kevin Leung, head of Mayi Tours, said tourists coming to the U.S. from China are substantially fewer than in previous years. He said the World Cup made Russia a hot destination for some tourists who might have come to the U.S. instead. Then there’s the trade war and the RMB’s falling value. “We received far fewer orders from tourists in China for our late August tours. The entire East Coast market of Chinese tourists has dropped 20 percent,” said Leung.

Leung also said that China’s economy is not very robust now and Chinese tourists’ interest in traveling abroad is not as strong as before. And in addition to the trade war, some political reasons, including President Trump’s immigration policies, also have made Chinese tourists hesitate to come here. “If this atmosphere remains for the next few years, the tourism industry will be seriously hurt,” Leung said.

Faye Zhao, manager of Sunshine World Travel, said the changes in the exchange rates between the RMB and the U.S. dollar have deterred some Chinese tourists who may have come to visit the U.S. otherwise, and the strong dollar, in turn, has prompted American tourists to travel abroad. And in general, the tourism market is much quieter than in previous years. “But, no matter how the rates are changing, there are always tourists who can afford to travel wherever they like,” Zhao said.

In a separate story, reporter Daqi Liu found some Chinese immigrants in New York gaining windfalls thanks to the yuan’s weakness. Jianhui Chen in Bayside is one of them. The 35-year-old Chen came to the U.S. from his hometown of Changle, Fujian province, more than a decade ago. He worked hard, saved some money, purchased a house, married and now has two sons. At the beginning of this year, a business opportunity showed up in Chen’s wife’s hometown of Zhejiang. The couple started to think about moving back to China for good. Last month, when they finally sold their house in Bayside and wrapped everything up, Chen found that because of the weakened RMB, he is able to pocket an extra 600,000 yuan ($90,000) when he brings the money he got from selling the house back to China.

“I know about the trade war between China and the U.S. But I thought it was too far off from us ordinary people…Who could have known that the house could bring in so much more RMB in just half a year’s time?” Chen said.  

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