The reasons for the appreciation of RMB come from the internal motivation and external pressure of China's economic system. The internal influencing factors are balance of payments, foreign exchange reserves, price level and inflation, economic growth and interest rate level. Since 1994, the current account of China's balance of payments has been in surplus, and China's foreign exchange reserves reached 286.4 billion US dollars in 22, an increase of 5.55 times over 1994. Judging from PPP, the price level in China is only 21% of that in the United States (World Bank, 22). From the difference of inflation rate, the average inflation rate in the United States since 1998 was 2.23%, while the average inflation rate (CPI) in China was-.3%, which was 2.53% lower than that in the United States. From 1978 to 23, China's gross domestic product (GDP) increased by 9.3% annually. During these 25 years, China's economic growth is undoubtedly the fastest in the world. Judging from the interest rate difference between China and the United States, the interbank lending rate in China was 2.7% at the end of 22, and the federal funds rate in the United States was 1.25%. The short-term interest rate in China is 1.5 percentage points higher than that in the United States. In China, the interest rate of RMB deposits is also 1.4 percentage points higher than that of US dollars. In addition, since the first half of 22, the dollar has weakened from strong to weak, and the RMB has depreciated with the dollar, which is contrary to the trend of RMB appreciation. While China's relative labor productivity is growing rapidly (the growth rate of China's manufacturing labor productivity is at least 1.5 percentage points higher than that of the US manufacturing industry in the same period from 1993 to 1999), on the contrary, the RMB depreciates with the US dollar, which makes the trade deficit of trade deficit countries bigger and bigger, which constitutes the external pressure of RMB appreciation.

(I) Economic analysis

Economically speaking, there may be the following reasons:

First, the RMB exchange rate has not been adjusted for nearly 1 years since 1994, and China's economy and national strength have undergone profound changes in the past 1 years.

second, since the 199s, some authoritative international institutions and trading partners have always believed that RMB is undervalued to varying degrees.

Third, according to the theory of international economics, excessive foreign exchange surplus itself indicates that foreign currency is overpriced, local currency is overpriced, and local currency is under pressure to appreciate.

fourthly, since 21, all the major currencies in the world, including those of southeast Asian countries, have greatly appreciated against the U.S. dollar. Only the exchange rate of RMB against the U.S. dollar has not been adjusted, that is, the RMB has actually depreciated sharply against other currencies following the U.S. dollar. Not to mention whether the RMB was excessively devalued or undervalued in the 199s, it is only said that the currencies of other countries have greatly appreciated against the US dollar in recent years, and only the exchange rate of RMB against the US dollar has not moved. This alone can judge that the value of RMB against the US dollar may be underestimated.

(III) Analysis of International Politics

The RMB exchange rate issue is not only an economic issue, but also an international political issue. Some scholars have pointed out that there are other reasons behind some western countries' frequent calls for RMB appreciation. Some are out of jealousy, some are to divert domestic accusations against the authorities, and some are to win votes from domestic manufacturing industries. For example, western countries simply link the value of RMB with the decline of their own manufacturing industry and try to force RMB to appreciate. The reason for the reduction of employment opportunities in the United States is not China, but the invisible hand of global competition. The reasons why foreign countries clamor for RMB appreciation are nothing more than the following: First, the RMB exchange rate is too low. It has been suggested that the RMB exchange rate should be set at around 1 US dollar to 4.2 yuan RMB. Second, China's foreign exchange reserves are too high. Since China's accession to the WTO, there has been no sharp increase in imports. On the contrary, the trade surplus has greatly increased. Third, China's massive export of cheap goods caused world deflation. Some people think that in recent years, China's massive export of cheap products has led to deflation in Japan, Europe and the United States, and China should make the RMB appreciate and take corresponding responsibilities in the world economy.

The reason why the United States pressured RMB to appreciate is that China's policy of "pegged to the US dollar exchange rate" failed to give full play to the positive effect of dollar depreciation, but only "greatly enhanced the export competitiveness of China enterprises and stimulated the export of China products". Especially when the US dollar depreciated in 22, the US foreign trade deficit reached a historical peak of US$ 435.2 billion, and the trade deficit with China reached US$ 13.1 billion. In fact, the reason for the sharp increase in the US foreign trade deficit is not China's RMB exchange rate policy itself, but the comprehensive effect of many factors such as the adjustment of American industrial structure, the expansion of foreign direct investment, the growth of personal consumption expenditure, and the J-curve effect of the depreciation of the US dollar.

Financial hegemony is an extension of military hegemony and economic hegemony. By virtue of its dominant position in the international monetary system, the United States arbitrarily and compulsorily pursues its policies according to its own will, continuously obtains hegemonic profits, and maintains its position as a "financial hegemonic country". By depreciating the dollar, the United States can not only reduce its foreign debt burden, but also reduce its debt by one third every time the dollar depreciates sharply, stimulate the export of its products, and pass on its various economic crises, which has become the main form of its exploitation of other countries. The fundamental purpose of the RMB exchange rate dispute is that the United States hopes to prevent China goods from entering the United States on a large scale through RMB appreciation. Pressure for RMB appreciation, together with the US anti-dumping policy towards China, constitutes a new content of the Bush administration's adjustment of its economic and trade policy towards China.

In recent years, the discussion about "Asian Dollar" has become increasingly hot, and who can become the dominant player in the future Asian Dollar has become an increasingly sensitive topic. As Japan's economy has been sluggish for ten years, the possibility of the Japanese yen becoming the dominant Asian currency is getting smaller. However, due to the rapid economic growth, China has gradually become the "locomotive" of Asian economic development and the "engine" of world economic development, so the value of RMB has become increasingly obvious, and a "RMB zone" has begun to form in countries around China, which has caused Japanese anxiety. Against the background of Japan's $5 billion surplus with China in 22, Japanese Finance Minister Masajuro Shiokawa proposed a motion to urge the G-7 to adopt "a document similar to the Plaza Accord against the Japanese Yen in 1985" to force the appreciation of the RMB, which pushed the global voice of suppressing the appreciation of the RMB to the peak. The purpose was to defeat the challenge of the RMB to the Japanese Yen through the appreciation of the RMB and ensure the future dominant position of the Japanese Yen.

In recent years, China's external economic friction has become increasingly serious, but it is more confined to micro-economic friction. After China's entry into WTO, China is in the stage of great institutional adjustment, and institutional factors have attracted more and more attention in China's economic development. Countries such as the United States, Japan and Europe pressured RMB to appreciate, which made the share of institutional economic friction in China's foreign economic friction increase.