As the euro continues to rise against the US dollar, locals looking to travel or study in Europe are facing increased costs because the Chinese yuan is pegged to the green-back. Exporters, on the other hand, don't see the yuan's drop against the euro having too much positive impact on their business.
The euro was worth US$1.0163 yesterday, its highest level since January 2001.
"I have to prepare some 1,000 euros for next semester's study and accommodation. I hope the exchange rate will drop - that will save a lot for my family," said Li Xiaopeng, an 18-year-old Shanghainese studying at a high school in Ulspring, Germany.
Li, who is spending his summer vacation back home here and will return to Germany in early September, said he will wait until the last minute to exchange money.
Yan Xueyan with the Shanghai International Students Placement Council, said those planning to study in the euro zone can expect changing exchange rates to increase their costs by about 5 percent.
Germany, France and Holland are popular euro-zone destinations for Shanghai students.
Some 10,000 locals were studying abroad at their own expenses last year, 10 times more than a decade ago.
Travelers are already feeling the effects of the euro's increased strength.
The Shanghai China Youth Travel Service Corp was charging 18,500 yuan for a 15-day-tour to 12 European countries yesterday, 1,000 yuan more than last month's price.
The currency's increase in value has created a lot of business for banks offering foreign exchange trading services.
Experts say the exchange rate between the euro and dollar still has room to increase but will not change radically.
Theoretically, the rise of the euro should help local exporters, since their goods will be cheaper in euro-zone countries, said Zhou Dunren, a professor with the Center for American Studies at Fudan University.
But, in reality, the influence of the euro is limited as most deals signed by Chinese exporters are settled in US dollars. Less than 5 percent of deals are settled in euros, according to Guo Furong, of the Orient International (Holding) Co Ltd, the city's biggest trading company.
( eastday.com July 18, 2002 )
