The value of the Euro and the impact on the US toy industry


World%20Currency%20symbols The recent sharp decline of the Euro versus the US dollar has been having an impact on China and that may be having an impact on the toy industry.  The Chinese currency is not pegged to the value of the Euro as it is to the US dollar.  For that reason, the recent precipitous decline in the value of the Euro has made Chinese made goods more expensive on that continent.  As you can expect, this means that the Chinese export industry is getting hit hard.

If China is hit hard it means that it will be much harder for the Chinese government to sell the long anticipated revaluation of the Chinese renminbi against the US dollar to its business class.

Here is how the New York Times put it in an article entitled:  "Euro Crisis Drifts to China:”

The pain of the European debt crisis is spreading as the plummeting euro makes Chinese companies less competitive in Europe, their largest market, and complicates any move to break the Chinese currency’s peg to the dollar…

I found support for this point of view in the Chinese press.  Here is how China Daily puts it:  The chances of an early revaluation of the renminbi look unlikely and could happen much later than expected, considering that the nation's trade surplus may see steep erosions due to the European debt crisis…”

The toy industry was already complicated, it’s just getting more so. 

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