For multinational companies with established China operations and expanding local sales, what impact will a strengthening yuan bring? A Shanghai-based Rhodia executive gave his take on the issue.

Frank Laganier, the Zone Director - Asia Pacific for Rhodia Polyamide Engineering Plastics, told Plastics News that a large portion of the company's business in China is driven by domestic consumption (essentially automotive sales). Therefore, "we should not expect a strong impact on the Rhodia EP business in China," he said in a statement.

In fact, the appreciation of the Chinese currency will have a positive effect on the company's turnover from a corporate point of view, when the numbers are converted to dollars or euros, he added.

He acknowledged possible negative impact on some fixed costs linked to the Renminbi, but that would be of "a lower order of magnitude," he said.

Compared to increasing China costs resulted from wage hikes, inflation and the real estate boom, I think, the impact of the currency could remain a minor factor for the time being and the near future.