The world is starting to react following the devaluing of the yuan to its lowest rate against the US dollar in almost three years.
The decision has been made following weak economic data and aims to make exports cheaper. However, it is thought that the move to devalue the yuan by 1.9% will have global ramifications both in the short and the long term.
The country has reported a dramatic fall in exports and a drop in producer prices to a near six-year low. Imports have also plummeted 8.1%, and have been down for nine months running. Year-to-date imports dropped 14.6% in yuan terms. In total, China’s trade surplus has dropped 8.5% from June, to $43.03 billion.
A number of manufacturing plants in China have shut down and claims of unpaid wages are filtering through the country. Toy manufacturer Ever Force Toys & Electronics was recently protesting, demanding three months’ worth of pay.
Stock markets have now dramatically fallen around the globe amid fears of an economic slowdown.
London’s FTSE 100 index closed down 4.6% at 5,898.87, with major markets in France and Germany also down by 5.5% and 4.96%.
What impact do you think the situation in China will have on the UK toy industry? We’re keen to hear your views – email email@example.com.