| 3-7-08 | CCAA Orphanage Fee Update |
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TO: All ASIA Families in Process FROM: Sandra Miller, ASIA Executive Director RE: Orphanage Fees Follow Up Hello again ASIA families in process, We have received back some preliminary information about orphanage fees that point to a larger issue impacting fees. It is important to put this information into the context of the current changes that China is experiencing. As you know, in the past the exchange rate for RMB has been tightly controlled by the central government. In 2006 the government allowed slight changes in the exchange rate. These changes did not dramatically alter prices. From January 2007 to now, one can see a much more significant fluctuation. For example: March 2008 $1 USD was equal to 7.00 RMB January 2007 $1 USD was equal to 7.70 RMB The Chinese government has not adjusted the orphanage fee to account for the drop in the exchange rate. If they had, it would look like this: March 2008 $3000 USD orphanage fee = 21000 RMB January 2007 $3000 USD orphanage fee = 23100 RMB Difference: 2100 RMB or $300 USD This means that if you had paid an adjusted exchange rate orphanage fee in March 2008, you would have paid another $300 in orphanage fees. This may explain part of the concern on the part of orphanages. In addition, adoptive families are experiencing an increase in costs as they travel to China, since the rest of China's businesses are adjusting their rates to keep up with the exchange rate. This explains the increasing travel costs over the year. It also appears that the general public is experiencing inflation as consumer costs rise. We know that over the past several months food prices are climbing - meat, fruit and vegetables by as much as one third. While some price increases may be due to supply shortages, the exchange rate plays a role too. The price of internal transportation is rising, as is the price of gasoline. Taken together, there is a huge impact not only on the orphanages and their ability to care for the children, but on the country as a whole. As nearly as I understand, it is the central government (not the CCAA) that regulates the fees that orphanages charge; but we are hearing that some orphanages want to increase the fees to account for their increasing costs. It may be that, just as in the U.S., some areas are more impacted than in other areas, thereby causing more stress to specific orphanages. So what is the answer to rising orphanage fees? The CCAA has told us they were unaware of some of the provinces' declarations about increasing the orphanage fee. They also stated that, at this time, families are not obligated to pay more than $3000, even if asked to pay more. If you are willing and able, you can pay more than $3000. In my opinion, this appears to be an issue that will be resolved at the central government level, but it may take some time before this is accomplished. In the meantime, we are all likely to see provincial and even orphanage differences. We are accustomed to a very systematic and centralized implementation of adoption rules. It could become less internally consistent for a while, as the Chinese government implements new rules. I do believe that we should expect many expenses associated with the adoption process and travel will continue to go up, especially if the exchange rate is allowed to continue in this "controlled float". We will continue to do our very best to keep you informed of changes as we learn of them. We will also continue to do our very best to keep costs as reasonable as possible. If you have further questions, please email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or telephone. With kind regards, Sandra |
