Chinese students studying in Europe and shoppers are happy about the falling value of the euro but experts hold opposing views on the weakened single currency's impact on the Chinese economy, China's Global Times reports.
The People's Bank of China set the daily reference price of the euro for foreign exchange trade at 6.9795 yuan on Jan. 23, following the European Central Bank's announcement of a quantitative easing program.
The newspaper noted that with the euro breaking through the 7 yuan level for the first time in history, the currency has fallen 19% against the yuan during the past eight months.
"The euro's depreciation will usher in a spring for vendors selling imports in China," said Zhang Yan, a Chinese woman living in Hamburg, who sources German goods for Chinese online shoppers. Zhang expects an increasing number of people to join her business following the decrease in prices in yuan for infant formula, cosmetics and shoes.
Shen Kaiming, a student at Humboldt University of Berlin, said the weakening euro has helped reduce the costs of living and studying in Germany from around 100,000 yuan (US$16,000) to less than 90,000 yuan (US$14,400) per year.
However, not all Chinese living in Europe will be happy about the falling euro, the newspaper said. Ding Yifan, deputy director of the Institute of World Development under the State Council's Development Research Center, said Chinese nationals working in France and remitting their pay home will see their earnings shrink.
Meanwhile, the newspaper cited the German weekly Die Zeit, which said German companies exporting goods to China expect to see profits increase by 20% due to the change in the exchange rate.
Li Jianjun, a financial analyst at Bank of China's International Finance Research Institute, advised that China should seize the opportunity created by the weak euro to buy high-tech products produced in Europe to push for an upgrade of Chinese industries.
Chinese companies should also consider expanding their investments in Europe to take advantage of the weaker currency, Li added.
However, Tan Yaling, head of the China Foreign Exchange Investment Research Institute, cautioned the public against the negative impact of the stronger yuan on the Chinese economy, which posted lower-than-expected trade growth in 2014. The capital outflow brought about by increasing investment in Europe may also pose risks to the Chinese economy if it takes place on a large scale, Tan noted.
Although the stronger yuan will hurt China's exports in the short term, a recovery of the European economy will drive demand in the continent and Chinese exports in the medium to long term, said Xu Gao, chief economist at Everbright Securities in Beijing.
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