Economic difficulties and the depreciation 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 in Xi’an, China’s Shaanxi province, with her husband. Zhai and her son moved to Beijing so that her son could attend primary school there. She brought him back to the United States for college while her husband stayed in Xi’an to take care of business.
“Usually my husband sends us money for our living expenses from China. We earn money in China and spend it here. I absolutely don’t want the yuan to sag because the school fees and my son’s living expenses are very expensive every month,” Zhai said.
The Chinese yuan fell to 7.3 against the US dollar, a 10-month low and nearly the level of the 2008 global financial crisis, causing concern and uncertainty among some new Chinese immigrants living in the United States.
“The factory at home can barely operate since the pandemic, which has affected our income significantly. I’m really worried,” Zhai said.
She said that in the past, if people had a little extra money, they wanted 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 not necessarily branded items, Zhai said.
“As China’s economy continues to deteriorate, the rate will likely exceed eight. Then the yuan will become worthless like a piece of paper,” said Liu Pingfei, a Chinese immigrant and owner of a used-car dealership. in Monterey Park, a Chinese enclave. in the Los Angeles area.
Vicky Li, a businesswoman from Los Angeles, is luckier. It has stores in Los Angeles and Guangzhou specializing in dry goods.
“Usually, if business in China is good, I will exchange yuan for US dollars. If business in the United States is better, I will exchange US dollars for yuan and then use it to buy goods “, she said.
The weak yuan “has little impact on me because my transactions are not very large, so everything is fine,” Li added.
Derek C. Tung has worked as 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, reducing the purchasing power of people who depend on the yuan, such as Chinese students. studying in the United States.
“If you are not in the United States to invest but to study, and your parents are only workers, civil servants or simple workers in the private sector, with an annual income of between 100,000 and 200,000 yuan (13 $666-$27,333), the weak yuan will have a big impact on them,” Tung said.
Tung said he expects fewer Chinese to travel to the United States and buy real estate to invest in the future. However, people will continue to invest on a smaller scale and buy primary residences, he said.
Adrianna Zhang contributed to this report.