Anyone, including companies that moved manufacturing to China are instantly loosing 10% of their investment.
Look for companies having to take huge charges at quarter end and year end. Some will choose to take it all one lump to clear their books of it, while others will try to spread it’s impact over the year.
This change both makes it harder for companies to remove capital valued in RMB out of the country and also makes them think twice about turning their dollars into RMB investments.
Chinese Manufactures have to import almost all their raw materials in dollars. So their price in USD will remain almost the same since most items manufactured in China have <5% labor content.
Bottom line, their estimates on what this will do to their exports are way off, these estimates are based on the old model of larger labor content for Chinese Manufacturing.
In the end, we will see how spectacularly this fails and just creates a race to devaluation in the region.
What China did this week solidified a horror - that the charade is over, and every other economy (especially ours) will be hit, hard.