English translation: at official or current exchange rates
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13:09 Nov 3, 2008
French to English translations [PRO] Bus/Financial - Finance (general)
French term or phrase:en termes de taux de change
This is about China, "la 6ème puissance économique mondiale en termes de taux de change."
Can a country be an economic power "in terms of exchange rates" and what does this mean?
Explanation: What they are indicating is that this is calculated at official exchange rates. The implication is that Chinese official exchange rates vary greatly from what might be termed the 'real value' of the chinese currency, which would be calculated at a 'purchasing power parity' rate.
If you will google 'official exchange rate' and 'purchasing power parity', or look at the Wikipedia entry for 'purchasing power parity' on the link below it will explain why a country can be more or less of an economic power if it's real exchange rate is different from its official or nominal exchange rate.
In economics writing the term 'at official exchange rates' is very common, (more than 7 million hits on Google) and the most accepted way to express this.
'In exchange rate terms' would be understood and not incorrect, but at 'official exchange rates' is probably the way a professional economist would express this.
I think the reason that the writer qualified this with "en termes de change" is because the real size of the Chinese economy is very much a subject of debate among economists. In fact, last year the estimated size of the whole Chinese GDP was recalculated to be only 40% of its former estimated value. That is a huge difference.
It seems that the Purchase Power Parity factor used to adjust the Chinese currency had not been updated since the 1980s and had become grossly inaccurate. Further, Chinese statistics are considered to not be reliable, so it is difficult if not impossible to estimate many economic phenomena in China accurately.
Thus the writer of this French sentence acknowledges these issues, and carefully notes that the criterion used is the value of the Chinese economy at the official exchange rate, and not at PPP or using one of the other measures economists use to estimate economies. So the rate is not adjusted, and the reader should consider the size of the Chineses economy to be the size at the official rate adjusted by whatever the reader might deem appropriate, or just to understand that the amount is probably not exactly accurate.
Reading through my last comment, I may be - and suspect am - guilty of "second guessing" what the authors mean on the basis of a bullet point and (implicitly) criticising them if they are using a current/market exchange rate measure as the sole indicator of a country's economic power. Obviously, the point about the (current market) exchange rate would carry over into any aggregates that have been adjusted/converted using this rate.
What I was trying to say, in essence, is that I think the issue behind the translation is one of comparability. In this case, it boils down to choosing a country's currency as a reference point (e.g. the $US) and then producing comparable figures via conversions based on each country's dollar exchange rate. If it is simply about an exchange rate, then I can only assume than some (weighted) exchange rate (index) has been used (from memory I think the IMF is one organisation that produces these) to make the comparison.
If it is not about using an exchange rate, market or otherwise, to express some economic aggregate in common terms, then it may be that they are using some sort of weighted exchange rate. In this case, using Joe's suggestion or working the term "weighted" into the text, would make more sense than simply saying "in terms of exchange rates" (how many would be needed to illustrate the point?).
So maybe something like "in terms of a weighted exchange rate (index)". Something tells me that China didn't become a "major economic power" - and won't sustain the export-led growth/low cost base that brought it there - by having a high exchange rate (which would dampen down demand for its exports) - which makes me think that it is about some sort of exchange rate adjusted/converted aggregate. It is possible that the aggregates have simply been adjusted/converted using, say, each country's dollar exchange rate to produce dollar value figures.
...as addendum to my comment, I think the author's saying that China is the 6th strongest economy in the world in terms of the power of its currency, ie, its exchange rate at any time against US$, GBP£, etc has a powerful impact on the economies of those countries and all other countries who have trading relationships
I'd say this means "China is the 6th strongest economic power is terms of currency" OR to put it differently "China has the 6th strongest currency in the world" [obviously open to debate as similar has been claimed recently of Chile, UK, etc]