Expect the Yuan to rise ….

­­­­­­­­but not for yet a while.

There have two major developments in the last 7 days in relation to the competitiveness of the yuan – or renminbi – the currency of China.  The first was the decision by US Treasury Secretary Tim Geithner to reserve judgement on whether the Chinese are manipulating their currency and keeping it low to maintain its export competitiveness.  The second was the meeting over last  weekend of the Chinese government to discuss its plans for the next 5 years of growth and development.  Unlike western economies the Chinese continue to create 5 year plans to guide the economy.  The one now published – the 12^th - covers the years 2011 to 2016.

Funding Universities in England and Wales

Government policy in the UK has moved decisively towards a more consumerist model for funding higher education.  Traditionally we have taken the view that the wide economic benefits of having a workforce educated beyond age 18 will more than pay for the investment required to get them there.  That is to say that the economic benefit of investing in education will be seen in higher levels of economic activity and growth and therefore more tax income for the government.  On that basis the ‘taxpayer’ is more than able to bear the cost of University and still be ‘quids in’.

The balance of the argument has now moved on.  First we introduced top up fees a decade ago.  This means that currently students pay up to £3290 per year for their courses which they receive as a student loan repayable after graduation.   It is essentially requiring students to pay for a part of their education out of the enhanced lifetime income stream it gives them.  Seems reasonable.  We are now facing the prospect of increasing the top up fees to some £7000 and perhaps more.  We must wait and see the full debate as it passes through the Parliamentary process.

More fundamentally