China conducts stress tests for devaluation of the Yuan: Chinese currency ETFs

China is conducting "stress tests" in the export sector of the country to see how much appreciation of the yuan companies can support, according to local newspaper 21st Century Business Herald on Friday.

The newspaper quoted industry sources saying that the test results, conducted jointly with the Ministry of Trade and the Ministry of Industry and Information Technology, will serve as reference for future monetary policy of the Chinese government. These tests, according to the newspaper, do not necessarily mean that Beijing let the yuan appreciate.
 
According to initial results of the tests, which focused on exporters of textiles, shoes and toys, each percentage point of appreciation of yuan would take one point from their profit margin. That would be a serious blow to profitability, since often the net profit margin of exporters is only 3% to 5%.

Two ETFs that track Chinese currency are CNY and CYB, with CYB having much higher volume: