Chinese airlines has ordered more than US$100 billion of planes from Airbus SE and Boeing Co in the past decade. Paying those bills is getting harder with the prospect of a trade war pushing the local currency to its lowest level in six months.
A weaker yuan means Air China Ltd, China Southern Airlines Co and China Eastern Airlines Corp will find it more costly to pay for new aircraft, which are priced in US dollars. The airlines must also spend in foreign currency for fuel purchased overseas, which is somewhat cushioned by international ticket sales. All told, they are bracing for higher expenses and fewer passengers as trade tensions build up between the world’s two biggest economies.
Investors have pummeled the shares of the three biggest Chinese airlines on concern the weaker yuan will result in a dip in earnings. Flag carrier Air China has tumbled 22 percent in Hong Kong since June 13, while China Southern Airlines and China Eastern have slid 25 percent and 18 percent since June 14, losing a combined market value of about US$11.5 billion.
“Trade concern is the one [thing] that’s pushing the yuan down,” said Mohshin Aziz, an aviation analyst at Maybank Investment Bank in Kuala Lumpur. “That’s the root cause of all the branches of troubles we’re going through.”
A weaker yuan also means higher interest payments on dollar-denominated debt. Air China had about US$21 billion of dollar-denominated debt; China Southern had US$18 billion; and China Eastern US$11 billion, according to data compiled by Bloomberg.
Since reaching a high in late March 2015, the Chinese currency has declined almost 5 percent amid ongoing trade tensions with the US and last week’s decision by the People’s Bank of China to cut the reserve requirement ratio — a move set to unlock 700 billion yuan (US$107 billion) of liquidity effective July 5.
Every 1 percent fluctuation in the dollar would translate to a loss or gain of 280 million yuan annually for Air China, 278 million yuan for China Southern and 260 million yuan for China Eastern, according to K. Ajith, a Singapore-based analyst at UOB Kay Hian.
means loans taken out by a company (or government) calculated in US dollars. Since the loan is expressed in US dollars, repayment of the loan must be made in US dollars. Loan repayments are therefore affected by the exchange rate of the base currency used to take out the loan. If the base currency weakens against the dollar, the value of loan repayments will increase and vice-versa.
Reserve requirement ratio is the percentage of depositors’ money that a bank must hold in cash, according to the requirements set out by the central bank of the country in which it is operating. Governments will occasionally reduce the reserve requirement ratio to increase the money supply (the total amount of currency circulating in a country’s economy at any given time) as a way to stimulate spending during periods of low economic growth.
(Edward Jones, Taipei Times)
1. trade war; trade spat phr.
貿易戰 (mao4 yi4 zhan4)
2. foreign currency phr.
外幣 (wai4 bi4)
3. cushion v.
緩衝 (huan3 chong1)
4. pummel v.
連續擊打；拋售 (lian2 xu4 ji1 da3; pao1 shou4)
5. market value phr.
市值 (shi4 zhi2)
6. dollar-denominated debt phr.
以美元計價的債務 (yi2 mei3 yuan2 ji4 jia4 de5 zhai4 wu4)
7. reserve requirement ratio phr.
法定存款準備金率 (fa3 ding4 cun2 kuan3 zhun3 bei4 jin1 lu4)
They may have had a reputation for trade, braids and fearsome raids, but the Vikings were far from a single group of flaxen-haired, sea-faring Scandinavians. A genetic study of Viking-age human remains has not only confirmed that Vikings from different parts of Scandinavia set sail for different parts of the world, but has revealed that dark hair was more common among Vikings than Danes today. What’s more, while some were born Vikings, others adopted the culture — or perhaps had it thrust upon them. “Vikings were not restricted to blond Scandinavians,” said Eske Willerslev, a co-author of the research from
Literary circles have been celebrating the legacy of late writer Eileen Chang, who would have turned 100 on Wednesday next week. Born in Shanghai, the legendary writer shot to fame in her 20s, and continued to write after moving to Hong Kong, and then the US, in the 1950s. Chang is one of the greatest female Chinese writers, and her classic works include Love in a Fallen City, The Golden Cangue, and The Red Rose and the White Rose. Many of her novels, such as Lust, Caution, were adapted into films and TV drama series. Based on Chang’s novel Aloeswood Incense
Let’s dine out tonight (3/5) 今晚我們去餐廳吃飯吧（三） A: Hmm. . . I can’t decide what to order. I’m hesitating between a lamb rogan josh or a beef vindaloo. B: Well, let’s order both and share the dishes. We can also order the tandoori king prawns that I was just eyeing up. A: The prawn dish will perfectly complement the bottle of Australian Chardonnay that I’ve brought along. It’s a great wine, with notes of peaches and lemongrass. B: Cool! Let’s also order some butter naan bread and pilau rice for two. A: 嗯……我無法決定要點哪一道菜。我正在猶豫要點喀什米爾羊肉咖哩，還是辛辣香料牛肉咖哩。 B: 啊，那我們兩個都點，然後分著吃吧。我們還可以點一份坦都里香料烤明蝦，我剛剛一直在看這道菜。 A: 這道明蝦應該能完美搭配我帶來的這瓶澳洲夏多內白葡萄酒。這瓶酒真的很棒哦，帶有桃子和檸檬草的香氣。 B: 酷！那我們也點一些奶油烤餅，和兩人份的香料米飯吧。 （Edward Jones, Taipei Times／台北時報章厚明譯） WARNING: Excessive consumption of alcohol can damage
Let’s dine out tonight (5/5) 今晚我們去餐廳吃飯吧（五） A: I can’t believe we ordered the hottest curry on the menu by mistake. I’m such a dunderhead: I should have checked with the waiter first. B: Never mind, the mango lassi the waiter gave us on the house really did the trick: my mouth has cooled down now. A: Why don’t you finish off the remainder of the lamb rogan josh — it’s the mildest of all the curries we ordered. I’ll polish off the beef vindaloo. Waste not, want not. B: Are you sure that’s wise? I might have to take you home in an ambulance. A: 真不敢相信我們竟然不小心點到菜單上最辣的一道咖哩。我真是個笨蛋：我應該先跟服務生確認的。 B: 沒關係，服務生送我們餐廳招待的芒果優格真的發揮魔力了：我的嘴巴現在冷卻下來囉。 A: 你要不要把剩下的喀什米爾羊肉咖哩吃完──這道是我們點的咖哩菜肴裡最溫和的。我會快速掃完辛辣香料牛肉咖哩。不浪費才能不虞匱乏。 B: 你確定這樣是明智之舉嗎？我搞不好要叫救護車載你回家哦。 （Edward