Currency exchange board showing cross rates between various countries

By Shan Li, Samantha Masunaga and Andrew Khouri
August 12, 2015

At the Beverly Center on Wednesday, a clutch of Chinese tourists spilled out of a bus and into the upscale mall, ready to snap up Gucci purses and Nike sneakers.

The tour bus is just one of about 70 the shopping center gets a month, dropping off visitors from China primed to splurge — but with currency that is suddenly worth less because of the devaluation of the Chinese yuan.

These tourists are spending now, but anxiety is high throughout the Southland about whether tourists, home buyers and investors from China will lose interest if the currency keeps falling.

Chinese tourists “are very, very important,” said Susan Vance, the Beverly Center’s marketing and sponsorship director. “One of the things we realized … is that they like to shop.”

China’s decision to devalue the yuan, also known as the renminbi, is sure to be felt across the Southern California economy — in ways that are bad as well as good.

With so many local businesses tied to the Chinese economy — whether for tourist dollars, investment or trade — any weakening of its currency could have a swift impact here in the Southland.

Retailers and shopping centers could take a hit as Chinese tourists curb their spending in reaction to the falling yuan. Tour guides and hotels could suffer a similar crunch. But companies that import Chinese goods will enjoy reduced prices, and those catering to overseas investors may get a boost from people eager to shelter their wealth in dollars, economists said.

“Depending on the kind of business you are in, it can be positive or it can be negative,” said Sung Won Sohn, an economist at Cal State Channel Islands. “This could actually be a temporary benefit for the Southern California economy, because we don’t export as much as we import.”

But the one industry that will likely suffer is tourism, which has been a boon to the region as busloads of Chinese tourists criss-cross Southland’s highways, shop at its mall and dine at its restaurants, economists said.

In 2014, nearly 2.2 million visitors from China traveled to the U.S. — up more than 21% from the year before, according to Office of Travel and Tourism Industries. They spent almost $24 billion last year, outpacing their 2013 spending by 12.6%.

In November, the Obama administration gave a big boost to Chinese tourism by relaxing visa rules for Chinese tourists and business travelers.

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