CHINESE CURRENCY CHANGE TO BE FELT BY U.S. CONSUMERS WHITE HOUSE HAILS MOVE.

Byline: Evan Pondel Staff Writer

Los Angeles importers and consumers will likely pay more as a result of China's decision Thursday to raise the value of its yuan by 2 percent and sever that currency's link to the dollar.

The move, sought by China's trading partners, could make foreign assets cheaper to buy for China and level the playing field for companies competing with low-cost Chinese goods. But consumer goods from China will become more expensive for Americans.

The biggest initial impact on consumers could come in toy prices, since about 75 percent of toys sold in the United States come from China.

On Thursday, the Chinese government announced the change to an exchange rate of 8.11 yuan to the dollar.

``The cost of products were already going up because of high oil prices. And this increase will exceed the cost of raw materials even further,'' said Isaac Larian, chief executive officer of MGA Entertainment Inc., a North Hills toy company that imports Bratz fashion dolls from China. ``The price of consumer goods will have to go up.''

The U.S. government welcomed China's decision and hopes it will satisfy concerns of trading partners who have said that Chinese exporters had an unfair price advantage.

The Bush administration, facing political pressure because of a record $162 billion deficit with China, hailed the announcement. ``This is a very positive development. It clearly puts China on the right path,'' said Treasury Secretary John Snow.

Federal Reserve Chairman Alan Greenspan called the action a ``good start,'' but some economists worry that China may have unleashed economic forces that will eventually worsen inflation by making all Asian imports more expensive.

``In the scheme of things, 2 percent isn't a huge increase,'' said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. ``But China has a subtle way of punishing us.''

Los Angeles is also more dependent on Chinese imports these days. The value of imports from China rose nearly 100 percent, to $75.7 billion, between 2000 and 2004, with textiles and molded plastics leading the way.

``And it's the tchotchke makers (pens, flashlights, etc.) that are going to be paying the price in the future,'' Kyser said.

China's decision surprised International Technologies Network Inc., a Thousand Oaks importer of molds for plastic.

``We were expecting it to be in October, around the holidays over there,'' said S.R. Nair, president of ITN, who previously anticipated that the value of China's currency would increase more than 10 percent.

Nair said his company is comfortable with a 2 percent increase. But if the Chinese government continues to raise the yuan's value compared with the dollar, ``we're going to have to talk to some banks in China about covering our exchange rates,'' he said.

Analysts expect the value of the yuan to climb indefinitely.

``There is a broad consensus in the global economy that price pressures are rising, not falling,'' said Peter Ro, senior vice president and manager of foreign exchange for Beverly Hills-based City National Bank.

The Associated Press contributed to this story.

Evan Pondel, [phone]

evan.pondel(at)dailynews.com