Since the beginning of this year, the US dollar index has been adjusted back. In the first three quarters, the US dollar index rose by 4.7%, and the RMB appreciated slightly by 1.2%. At present, the exchange rate of RMB against the US dollar has exceeded 6.4 to 6.38. Exchange rate is an index to measure relative economic strength, which affects import and export, thus having a direct impact on the economies of various countries.

The continuous depreciation of the RMB against the US dollar means the appreciation of the RMB. The appreciation of RMB will make China's goods exported to the United States more expensive, thus reducing demand, while if it depreciates, exports will be cheaper, thus increasing demand and expanding export volume.

Many people think that 1 USD can be exchanged for 6.38 RMB. Why is the dollar so valuable? Isn't it good for RMB to appreciate? To make RMB more valuable, it is best to convert RMB into US dollars and convert it into 1: 1.

The appreciation of RMB does have certain benefits. If it really becomes 1: 1, then China's GDP has already surpassed that of the United States, and it is much higher. For example, in 2020, China's GDP will be 1, 0 1 trillion RMB. According to this exchange rate, it is 1.0 1 trillion dollars, which is 20.9 trillion dollars in the United States and almost five times in China. The per capita GDP also exceeds $70,000, making it a developed country.

After the appreciation, imported products become cheaper, such as imported cars, which may only cost tens of thousands of RMB. The cost of imported energy and raw materials has also dropped significantly. China imports a lot of oil, natural gas and chips.

However, the negative impact of RMB appreciation is even greater. China is known as the "factory of the world", with developed manufacturing industry and obvious price advantage, thus creating a huge trade volume and promoting economic development. Once it appreciates, imported products will become cheaper, and domestic products will lose their advantages, which will inevitably have an impact on China's manufacturing industry. Factory profits become low and thin, difficult to survive, closed down, resulting in unemployment and so on.

In addition, it is not conducive to the introduction of overseas investment. Foreign investment in China can promote technological progress and create jobs, thus stimulating economic growth. In 2020, foreign investment in China will reach US$ 520.6 billion, an increase of 8 1% compared with 20 19, making China the largest foreign capital inflow country in the world. After the appreciation of RMB, it means that the investment cost in China becomes higher, so they may move to other countries.