Domain investing in China.
Last week’s depreciation of the Chinese yuan against the mighty American dollar signaled trouble ahead for the Chinese domain markets.
While a 3% adjustment was just a fraction of the appreciation the Chinese currency has seen in recent years, there are signs of further downwards adjustments ahead, to the tune of 10% or more.
This move by the Chinese government which practices a strange form of communist capitalism, aims at increasing competition of China’s economy abroad.
Combined with the tremendous losses of the Chinese stock market, to the tune of 4 trillion dollars, has forced China to implement stability controls.
In other words, on one hand the Chinese economy seeks to be more competitive, and on the other hand, any huge fluctuations will now be limited.
This creates a cash flow issue to Chinese domain investors, many of which reaped the seeds of stock market trading in past months, and invested in domains, particularly numerics or pinyin letters.
Already, the cost of acquisitions of short domains owned by westerners is reflected in the unsolicited offers sent via spam; the upper range now reaches 2000 yuan from a previous of 1600.
While corporations in China invest in valuable short domains as a representation of their company’s image, domain investors of the “flipping” kind aren’t expected to continue gambling in an insecure market.
And that, might be less spam for owners of good letter LLLL .com’s as well.
