cost Chinese goods. But it also makes
foreign assets cheaper for Chinese buyers, possibly
prompting more takeover bids by China like those launched
recently for U.S. oil company Unocal Corp. and appliance
maker Maytag Corp.
Chinese stocks, mired in a prolonged slump, were up
sharply Friday on expectations the yuan's rise will make
Chinese assets more attractive to investors.
Airlines stocks were among the biggest gainers, while
textile makers fell. Airlines will benefit from lower oil
prices while textile exports will become more expensive.
The revaluation had immediate effects on stocks and
currencies around the world, reflecting China's huge
influence on world trade.
Although China had been under pressure for years to allow
the yuan to rise, there was no clear indication of a reason
behind the timing of the move. China had long insisted that
such a decision would be based solely on its own domestic
economic concerns.
However, there had been intense speculation that China
would adjust its currency policy ahead of a planned
September visit by President Hu Jintao to the United
States, which has been pressing China hard for a
revaluation. American and other foreign businesses say the
yuan is undervalued by up to 40 percent.
--mor
1128 Local Time
0828 GMT