If RMB appreciation is settled in RMB, the dollar price of export commodities will increase relatively, and the demand will decrease with the price increase, while for China, the local currency price will not increase, the sales volume will decrease, and the income will decrease; If it is settled in US dollars, the appreciation of RMB will lead to the decline of the US dollar price of export commodities after being converted into RMB, which means that the export enterprises will have lower prices and lower income even if the demand remains unchanged.
in the long run, for export enterprises, the steady appreciation of RMB can accelerate industrial transformation and eliminate industries with low export added value. It can improve the productivity of goods and make up for the decline in prices through the increase in quantity. For importing enterprises, we can reduce the import cost, introduce foreign advanced technology and equipment at a lower price, and better attract foreign talents to enter.
the appreciation of RMB is also unfavorable to the country's foreign exchange reserves, which will cause exchange rate losses of foreign exchange reserves. For enterprises with high load rate, such as civil aviation, the appreciation of RMB can reduce the dollar foreign debt and increase profits. Impact of RMB exchange rate appreciation on China's foreign trade
(1) A small appreciation has little impact on China's import and export scale
According to the simulation analysis of exchange rate appreciation by the National Information Center using the model, it is concluded that a 2% appreciation of RMB will reduce the export growth rate by 1.5 percentage points and increase the import growth rate by .2 percentage points. According to the data of 24, it is equivalent to a decrease of $9.1 billion in exports, an increase of $1.2 billion in imports, a decrease in trade surplus from $32 billion to $21.7 billion, and a decrease in net export demand of RMB 85.2 billion, which affects about .6 percentage point of the GDP growth rate in that year (the GDP by expenditure method in that year was RMB 14,77.6 billion, an increase of 9.5%). At the same time, the model calculation shows that the impact of one-off exchange rate changes on the national economy will decrease with time, and the impact will be reduced by half in the second year, and the impact will basically disappear after two years. It can be seen that the import and export elasticity of RMB exchange rate is very small, which is related to China's unique trade structure. At present, the processing and assembly trade with imported materials, the processing trade with imported materials and the import of foreign machinery and equipment account for nearly 6% of all imports. If we consider the import of raw materials and investment products in general trade, this figure still has a lot of room for improvement. It has little to do with the change of exchange rate to earn a fixed labor fee in processing and assembly trade; The situation of feed processing trade is slightly complicated, which depends on the proportion of imported intermediate products and raw materials. After the appreciation of RMB, the appreciation of RMB was alleviated to some extent due to the improvement of purchasing power of RMB, which led to the increase of prices of these products in the international market. According to the calculation of the Trade and Development Report of the United Nations Trade and Development Committee in 22, among the 17 important sample countries, China has the lowest unit labor wage, which is 2.5-47.8 times higher than that of China. Even considering the production efficiency of unit labor, 1 of the 17 sample countries are higher than the cost of China, so the increase in labor wages caused by the exchange rate rise will not bring great advantages to China's labor forces such as processing and assembly trade and feed processing trade.
(2) A moderate appreciation of RMB is conducive to the harmonious development of China's economy and international trade
Traditional exchange rate theory holds that exchange rate has a strong regulatory effect on the economy, and its mechanism is that the exchange rate of local currency affects the export of domestic products, thus affecting domestic production and GDP growth. When the local currency exchange rate is high and the foreign currency exchange rate is low, the cost of domestically produced products will increase, and the price will become relatively expensive in the international market, which will naturally affect domestic production and GDP growth. When the local currency exchange rate is low and the foreign currency exchange rate is high, the cost of domestically produced products will be reduced, and the price will become relatively cheap in the international market, which will enhance the price competitiveness of products and help expand the market, which will naturally promote domestic production.
however, when a country's economy has been relatively strong and its currency has been seriously underestimated, the appreciation returning to its true value will not only have an adverse impact on its own economy, but also make international trade develop more harmoniously, which in turn will also promote the further development of its own economy. The foreign exchange reserves of more than 7 billion dollars show the world that China has already met such conditions. Throughout the world, the currencies of economic powers are relatively strong, and there is no conclusion that these countries have withdrawn from the stage of economic powers because of their strong currencies.
(3) Moderate appreciation of RMB is conducive to the adjustment of product cost composition in China
The increased cost of RMB appreciation is labor cost. In China, labor cost is very low, generally accounting for only 1% of product cost, which is a cost factor with low sensitivity. If RMB appreciates by 1%, product cost will only increase by 1%, which will not have a substantial impact on product cost, so it is impossible to have a substantial impact on export product prices. Moreover, in China's export products, enterprises with foreign investment background account for a large proportion of income, and usually need to import a large number of equipment and raw materials from abroad. The appreciation of RMB makes the cost of equipment and raw materials purchased abroad decrease, and the cost of these enterprises with foreign investment background will not only increase, but also decrease.
(4) Moderate appreciation of RMB can better straighten out various trade relations
Exchange rate is the exchange rate of the two countries' currencies. Under the gold standard system, the ratio of the value of the two countries' currencies is directly and simply expressed as the ratio of their gold content, which is called coinage parity. In the early paper currency circulation system, countries generally stipulated that the gold price of paper money is gold content, and paper money still performs the function of metal money. The exchange rate basis of the two countries is still gold hidden behind paper money. However, with the evolution of the paper currency circulation system, the gold parity of paper currency is out of touch with the actual amount of gold represented by paper currency, and it is difficult to determine the actual amount of gold represented by paper currency. The determination of paper currency exchange rate seems a bit complicated, but one thing should be certain, that is, the basis of paper currency exchange rate should be purchasing power. Parity purchasing power is another kind of gold content. Compared with another country's currency, the increase of purchasing power shows that the inflation rate of this country is lower than that of another country, and it also shows that the country's economic strength is increasing, and countries with increasing economic strength will naturally enhance the confidence of trading partners. So as to promote the healthy development of domestic trade, which is itself an intangible trade resource. After the Asian financial crisis in 1998, the currencies of China's neighboring countries seriously depreciated. According to reports, after the financial crisis, the exchange rates of Thailand, Thailand, South Korea and Singapore dollars fell by 39% ,36% and 61% respectively against the US dollar. At this time, in order to stabilize Asian finance, the China government said that the RMB would not depreciate, the RMB's honorary exchange rate would remain unchanged, and the real exchange rate would actually appreciate with the depreciation of neighboring countries' currencies. However, the trade situation in China in recent years shows that China's foreign trade has not been seriously affected, but continues to show a strong growth momentum. This fully demonstrates the positive significance of a strong currency to trade promotion, and at the same time reveals a law to us, that is, the exchange rate is only an external manifestation, and it is the internal quality and economic strength of the domestic economy that play a decisive role in a country's economy.
In recent years, due to the undervalued RMB, the international trade frictions related to China's export products are also increasing. The dumping of some products at too low a price has worsened the international trade environment and affected the smooth circulation of China's products in the international market to some extent. International trade promotes each other, and the theory of international trade tells us that only when the economies of all trading partners can develop well can international trade be smoother and promote the economic development of all countries. Therefore, the reasonable value of RMB will return to appreciation, trade friction with trading partners will be reduced, various trade relations will be straightened out, international trade will be smoother and mutually promoted, and the trade interests of relevant trading countries will be maximized, and China will also gain greater benefits in this process.
(5), RMB appreciation is conducive to China's industrial structure adjustment and industrial upgrading
Since the reform and opening up, China's economy has developed rapidly, especially since the 199s, with an annual growth rate of almost 8%. However, we must see that China's economic growth has long been at the expense of high energy consumption, low efficiency, low technology content and even ecological damage. In international trade competition, underestimating the value of RMB encourages mainly the production and export of labor-intensive products and resource-based products. Although a large amount of foreign exchange is earned, the value of return is not very high, and capital accumulation is quite difficult. The competition of labor-intensive products in the international market is very fierce. The development of similar industries in a large number of third world countries has put great pressure on China. Generally speaking, China is a resource-poor country, and economic development continues to stay in the growth mode of high resource consumption, which will seriously affect the sustainable development of China's economy. With the rapid development of science and technology in the world, the application of various new technologies, new methods, new processes and new materials plays a key role in the economic development of a country. As a big country, China is still a developing country, but after more than ten years of reform and opening up, economy, technology and management have accumulated to some extent, which is the basis for China's development to a higher technical field and a higher industrial level.
industrial restructuring and industrial upgrading bring many benefits, which can greatly improve production efficiency, reduce product costs, improve product quality and value content, produce products with higher technical requirements, expand market space, make full use of resources, enhance their commodity value, and develop many raw material substitutes, reduce resource consumption and reduce environmental damage. Only industrial upgrading can fundamentally change China's economic growth mode and China's trade situation. Therefore, China's future competitive advantage must be transferred to the road of industrial upgrading. It not only meets the requirements of Scientific Outlook on Development, but also meets the requirements of social and economic development. In China's industrial structure, the proportion of traditional industries is relatively large, and emerging industries can only be said to be in their infancy. It is an urgent need for international competition in the future to vigorously develop emerging industries, strive to transform traditional industries and accelerate the upgrading of China's industrial structure. Industrial upgrading requires a lot of capital investment, especially foreign exchange capital investment. Now, there is pressure of RMB appreciation, which should be a good opportunity. After RMB appreciation, less equipment with the same dollar price will be converted into RMB, and the cost of introducing investment products will become relatively low. For the same patented technology and the same advanced equipment, only the relatively low cost will be paid, which will greatly mobilize the enthusiasm of enterprises to introduce advanced equipment and buy new technology patents, and will eventually accelerate the speed of technological upgrading in China, thus speeding up industrial restructuring and upgrading and improving products. It is certain that China will certainly open up a new world in the international market by making good use of the favorable opportunity of RMB appreciation, speeding up the upgrading of traditional industries, accelerating the rapid development of emerging industries and promoting the upgrading of products.
III. Conclusion
The appreciation of RMB is one of the important issues facing the government at present. As a fast-developing economy, if China has always implemented a fixed exchange rate policy, it is likely that the currency is gradually deviating from its value, so it is necessary to increase its flexibility in the exchange rate of RMB to ensure the stable and rapid development of China's economy and finance. Strengthen the regulation of the circulation of RMB in the international market, accelerate the reform of the banking system, and improve the management level of the banking system. The People's Bank of China should also make use of various means such as supervision and open market business to strive for the initiative to control the change of RMB exchange rate, so that the RMB can truly reflect its intrinsic value on the premise of stable economic development.
With China's foreign trade balance growing continuously, reaching a record high, foreign exchange reserves exceeding 8 billion, foreign trade product structure having some problems, and trade disputes caused by excessive foreign trade balance with some countries and regions, the implementation of a new exchange rate system and a small appreciation of RMB will not only greatly affect China's foreign trade import and export, but also improve some unfavorable factors in China's foreign trade import and export. Improving China's overall terms of trade, making foreign trade a healthy engine to promote China's economic growth, can also prompt enterprises to adjust the structure of foreign trade products, change the phenomenon that processing trade and other labor-intensive industries have been driving exports, promote the upgrading of China's industrial structure, and truly enhance China's position in international trade. In the case of exchange rate appreciation, enterprises pay more attention to domestic market and domestic demand, reduce the dependence of national economic growth on foreign trade, and weaken the impact of world economic ups and downs on China's economy, thus making China's economy develop more healthily. The apparent economic background of the Plaza Accord is to solve the huge trade deficit caused by the overvaluation of the US dollar. However, judging from the huge amount of US dollar assets owned by Japanese investors, the Plaza Accord is aimed at attacking Japan, the largest creditor of the United States.
in the early 198s, the fiscal deficit of the United States increased sharply, and the foreign trade deficit increased sharply. The United States hopes to increase the export competitiveness of products through the depreciation of the dollar, so as to improve the imbalance of international payments in the United States.
Let's take a look at the basic economic situation of the United States for a period of time before 1985.
In p>1977, Michael Blumeuthal, the finance minister of the Carter administration of the United States, verbally intervened in the foreign exchange market on the grounds of the trade surplus between Japan and the former Federal Republic of Germany, hoping to stimulate American exports and reduce the trade deficit of the United States through the depreciation of the US dollar. His speech led investors to sell dollars wildly, and the dollar depreciated sharply against the currencies of major industrial countries. At the beginning of 1977, the exchange rate of the US dollar against the Japanese yen was 29 yen, and in the autumn of 1978 it dropped to 17 yen, a decrease of 41.38%. The American government was shocked. In the autumn of 1978, President Carter launched a "rescue package" to support the dollar price.
from p>1979 to 198, the second oil crisis broke out in the world. The second oil crisis led to a sharp rise in energy prices in the United States, followed by a high consumer price index in the United States, and serious inflation occurred in the United States, with the inflation rate exceeding double digits. For example, when money was deposited in the bank at the beginning of 198, the real rate of return by the end of the year was negative 12.4%.
in the summer of p>1979, Paul A.Volcker became the chairman of the federal reserve. In order to control serious inflation, he raised the official interest rate three times in a row and implemented a tight monetary policy. The result of this policy is that the official interest rate in the United States is as high as double digits and the market interest rate is 2%. The short-term real interest rate (the real rate of return after deducting inflation) rose from the average level of near zero from 1954 to 1978 to 3% to 5% from 198 to 1984.
The high interest rate attracted a large amount of overseas funds to flow into the United States, which led to the soaring US dollar. From the end of 1979 to the end of 1984, the exchange rate of the US dollar rose by nearly 6%, and the exchange rate of the US dollar against major industrial countries exceeded the level reached before the collapse of the Bretton Woods system.
The sharp appreciation of the US dollar led to a rapid expansion of the US trade deficit. By 1984, the US current account deficit reached a record $1 billion.
in September p>1985,