The Yuan Revaluation Debate
What is often overlooked however is the nature of the business relationships between U.S. companies and their Chinese counterparts. In fact this complex series of relationships extends far beyond China and far beyond the typical notions of buying and selling, encompassing international labor, energy and materials costs, plant investments and upgrades, even including a greater attention to detail in core market demographics, consumer brand recognition and brand perception.
The largest consumer electronics manufacturers and resellers have contracts in place partially protecting themselves from the variables of the international trade. In some cases they are able to push production costs down through innovative contracting and manufacturing in low cost labor markets. They still require however tactics to hedge against energy costs and variable demand in their targeted markets.
Some retailers such as Philips have even managed to defray some research and development costs by introducing a number of R&D facilities throughout China. Others have looked towards conservative bets on the currency markets, or even with modest speculation in the energy and raw materials markets. However, smaller players have long protected their interests through a number of mechanisms and innovative twists in their international marketing plans.