China Yuan Depreciation Unlikely To Weight On ASEAN Tourism

The devaluation of the Chinese Yuan this week, down by 4%, is unlikely to change the perspectives of China’s tourism for ASEAN countries. The Yuan went down in a week from Yuan 6.11 to a US dollar a week ago to 6.3975 by the end of the week. China’s government tries to revive its fledging economy -although it is expected to grow around 7% this year- by lowering the cost of its goods. Devaluating the Yuan appeared then as the easiest and most efficient short-time solution to make Chinese products competitive again.

Is the Yuan slight depreciation likely to change Chinese travel habits for the rest of the year? Although long-haul travel might be affected, ASEAN tourism should show resilience. Already because the Yuan and China economic problems triggered a series of devaluation for ASEAN currencies. Compared to the Dollar, currencies from Indonesia, Malaysia and Singapore are down by over 10% while Thailand and Vietnam are also down by over 5%.

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So far the Chinese market this year has been buoyant to Thailand, Indonesia as well as Laos and Cambodia during the first quarter 2015; however, it declined sharply to Malaysia, the Philippines and Vietnam due to political or social problems with these countries. It is unlikley that the trend seen earlier this year will change dramatically. Except if Chineses’ consumption collapses following a flow of negative news…