What do the Chinese do when the dollar drops and the RMB rises? shopping!
Air China announced today that it will purchase 45 planes from Boeing with a book value of $6.3 billion.
The RMB has risen 6.65 percent against the dollar so far this year, and about 20 percent since 2005. Dragging their feet on the order for three years has probably saved Air China billions of yuan. Assuming the RMB continues to appreciate against the dollar over the life of the order (a likely assumption), the deal gets even more attractive for Air China over time.