From the Los Angeles Times:
Any day now, China’s rapidly appreciating currency will break the key barrier of seven yuan to the dollar. Los Angeles-based Wessco International is dreading it.
Wessco makes toiletry kits, stationery, bags and beverage containers in China and sells them to airliners and hotels around the world. The company’s sales come in dollars, and it pays Chinese suppliers, office rent and staff here in yuan. For years when the greenback was strong, such outsourcing kept costs low and profits up. But last year, the Chinese currency rose nearly 7% against the dollar, and it gained an additional 4% in the first quarter. “It means a lot of pain,” said Petros Sakkis, Wessco’s manager in Shanghai.