In recent years, China's trade situation has also undergone a series of changes. As shown in Table 4. 1, in the first three years after the exchange rate reform, although the RMB exchange rate has maintained a rapid appreciation trend, China still maintained a rapid growth trend in its trade surplus. Even under the US subprime mortgage crisis in 2008, China still achieved a trade surplus of $295.4 billion. However, after 2009, the global financial crisis, which evolved from the American subprime mortgage crisis, led to a downturn in peripheral economies and a sharp drop in export demand. Comparatively speaking, China still maintained a high GDP growth rate, and the residents' demand for imported goods showed an increasing trend, which made China's trade surplus decline.
(A) the positive impact of RMB appreciation on China's foreign trade
In the long run, a small appreciation of RMB will help to adjust China's economic structure and transform China's economic growth mode.
1. is conducive to improving the terms of trade, adjusting the industrial structure and enhancing the competitiveness of enterprises.
On the one hand, the moderate appreciation of RMB will force labor-intensive export enterprises to transform into technology-intensive enterprises, and realize the transformation from quantitative profit to quality profit by increasing the added value of export products. On the other hand, the trade surplus for many years made China's terms of trade deteriorate for a time. A moderate appreciation of RMB is conducive to reducing the trade surplus, improving trade relations with major trading countries, reducing anti-dumping measures against China products, providing a healthy trading platform for China's export enterprises, and promoting the harmonious development of China's economy and trade. At the same time, with the improvement of enterprise production efficiency, the quality of export products has been improved, which will help China export enterprises to extend their products to the high end, improve their international competitiveness and increase national welfare.
2. It is conducive to improving the growth mode of extensive economic, optimizing industrial allocation and improving the economic benefits of foreign trade.
At present, China's foreign trade model has a large proportion of processing trade, a short industrial chain and a small range of pillar industries. Although there are huge exports, it has not brought much economic benefits. This extensive growth mode can no longer meet the requirements of contemporary economic development. China should vigorously develop heavy chemical industry and high-tech industry to meet the domestic market demand. The appreciation of RMB has increased the import capacity of these enterprises, and enterprises can make full use of foreign resources and energy to create sustainable economic development focusing on stimulating domestic demand, which is of great significance to the development of heavy chemical industry and high-tech industry.
3. Conducive to the internationalization of RMB.
The rise and fall of a country's currency is closely related to the rise and fall of its comprehensive national strength. With the long-term appreciation of RMB, the world's confidence and trust in RMB and China's economy will increase day by day, and more and more countries are willing and willing to accept RMB as the international settlement currency. At present, the RMB has been circulated in most neighboring countries. With the strengthening of the strong signal of RMB, the circulation scope of RMB will be further expanded and eventually internationalized, becoming one of the international currencies. From this perspective, a moderate appreciation of RMB is not only a signal of China's comprehensive economic strength and good economic situation, but also an indispensable condition for China's economic internationalization and globalization. It is conducive to enhancing the confidence and willingness of domestic and foreign investors and reducing the cost and difficulty of China's external refinancing.
4. It is conducive to improving people's lives and increasing people's wealth effect.
During the period of 1994, the sharp depreciation of RMB led to the high price of domestic imported products, which led to the fact that no matter how hard enterprises tried to expand production and export, people had to endure the inflation caused by the rising price of imported goods. However, when the RMB appreciates properly, the average relative income of China households will increase under the strong current account balance of China. At the same time, as the relative prices of foreign products will decrease, the purchasing power of China people will increase accordingly, which will be beneficial to increase China's imports of foreign high-quality consumer goods, especially to improve the opportunities for China people to study or travel abroad, thus helping China people to further improve their existing living standards.
(B) the negative impact of RMB appreciation on China's foreign trade
This summary will analyze the following negative effects of RMB appreciation on China's foreign trade from both macro and micro perspectives:
1, macro level
(1) The scale of foreign debt has been further expanded.
The continuous appreciation of RMB strengthens investors' expectation of RMB appreciation, which will attract a large amount of foreign capital into China's capital market, increase the scale of China's foreign debt, and at the same time transfer a large number of foreign "currency taxes".
(2) Excessive appreciation of RMB will inhibit exports, expand imports and affect the stable and healthy development of the national economy.
On the one hand, the appreciation of RMB will increase the price of China's export commodities, thus weakening the international competitiveness of China's export commodities; On the other hand, due to the rising domestic commodity prices, domestic people will also increase their consumption of imported goods to replace domestic goods, which will do great harm to China's export market, which is dominated by labor-intensive goods. Once the RMB appreciates too fast and too much, labor-intensive enterprises will raise their product prices in order to maintain a certain profit, which will not only weaken their international competitiveness, but also have a devastating impact on the growth of exports.
(C) affecting the stability of the domestic financial market
At present, the development of China's financial market is relatively backward, and the RMB continues to appreciate, which leads to obvious expectation of appreciation. A large number of international hot money flows into the capital market and real estate market through various channels to compete for profits. This kind of high-risk investment is not only easy to cause inflation, but also easy to cause turmoil in the domestic financial market, which will adversely affect the sustained and healthy development of China's economy. In addition, the sharp appreciation of RMB may also lead to the uncertainty of the trend of bank deposits in China. If a large number of bank deposits are converted into foreign exchange, it will trigger a RMB exchange rate crisis, which is not conducive to the stability of the financial market.
(4) Increased employment pressure.
At present, the quantity and quality of effective labor force in China are increasing rapidly, but the speed of economic growth is not enough to offset this employment pressure. If the appreciation of RMB leads to slow economic growth, the phenomenon of oversupply in the labor market will be further aggravated, which will not only help alleviate the employment pressure in China, but also lead to wage stagnation and affect people's income and welfare. In addition, the rise of RMB exchange rate will also lead to the rise of the prices of non-tradable goods (including labor, land and other production factors) in China, thus weakening domestic demand and bringing serious negative effects to the job market.
(5) The central bank's monetary policy is invalid.
When faced with the pressure of RMB appreciation, in order to keep the RMB exchange rate basically stable, the central bank has to put a lot of base money in the foreign exchange market to buy foreign exchange. Putting too much base money into the market obviously runs counter to the current policy goal of the central bank to continuously raise the deposit reserve and deposit and loan interest rates to control inflation, which can be said to invalidate the central bank's monetary policy to some extent.
(6) It is not conducive to attracting foreign investment, especially foreign direct investment.
The appreciation of RMB means that the cost of foreign investment in China (denominated in RMB) is rising, such as the cost of building factories, purchasing equipment and labor in China. This will probably prompt foreign capital to turn to China's capital market, affect the capital inflow of China's import and export enterprises, and have a certain negative impact on China's import and export trade. In addition, the export products and services of foreign-invested enterprises in China will greatly reduce the competitiveness of their products and even force some foreign companies to leave the China market.
2. Micro level
(1) revaluation of assets and liabilities
Monetary items refer to the monetary funds held by an enterprise and the assets collected or liabilities paid at a fixed or determinable amount. When the exchange rate changes, the above-mentioned foreign currency assets or liabilities of the enterprise will also change accordingly. Specifically, if the RMB exchange rate rises, the original foreign currency deposits and assets expressed in foreign currencies will depreciate. This in itself is a substantial impact on the present value of enterprises.
(2) corporate income decline
For export-oriented companies, exchange rate changes will directly affect sales, sales revenue, operating costs and other operating factors. With the appreciation of RMB, the foreign currency price of enterprise products rises obviously under the condition that the local currency price remains unchanged, which may cause enterprises to be forced to lower export prices or reduce production to adapt to the decline in product demand. For some large enterprises, this may only be a reduction in profits, and they can still make up for the increase in income in other ways. However, for many small and medium-sized export enterprises, the decline in net profit is likely to lead to losses or even bankruptcy. At present, only by maintaining the stability of the value of RMB can we ensure the survival of many small and medium-sized enterprises in China and ensure the stable and healthy development of China's domestic economy and foreign trade.
Five, countermeasures and suggestions to deal with the impact of RMB exchange rate changes on China's foreign trade
Through the analysis of the advantages and disadvantages of RMB exchange rate appreciation in the fourth part, it is found that although RMB appreciation can promote China's economic development in the long run, China is still a developing country with a low per capita income. Under the current complicated and severe economic and political situation, the China government should intensify the reform of the exchange rate system, give full play to the adjustment and economic leverage of RMB exchange rate on the national economy, promote the adjustment and optimization of China's foreign trade structure, and then comprehensively promote the rapid and healthy development of the national economy.
(A) gradually realize a small appreciation
The steady and small appreciation of RMB has a positive effect on import and export enterprises and domestic economy, but a large appreciation will bring a devastating blow to the national economy. Therefore, in order to control the negative impact of RMB appreciation to the maximum extent, we must avoid excessive appreciation and realize steady and small appreciation. As long as a small appreciation does not lead to an unusually serious situation, we should continue to adhere to it. However, a sustained small appreciation will undoubtedly give people the expectation of RMB appreciation, and it is easy to induce a large-scale inflow of speculative capital. Therefore, while the policy induces a small appreciation of RMB, measures must be taken to prevent a large inflow of speculative capital.
(2) Improve the RMB exchange rate formation mechanism, constantly improve the management of floating exchange rate system, and promote the reform of RMB exchange rate system.
At present, China implements a managed floating exchange rate system in the exchange rate market. Although compared with the floating exchange rate system generally implemented in developed countries, the managed floating exchange rate system is backward and non-market-oriented, which does not meet the requirements of the long-term development of the market economy. We should constantly improve the RMB exchange rate formation mechanism and the managed floating exchange rate system, improve the RMB exchange rate formation mechanism and the managed floating exchange rate system, and improve the level of opening up. It is conducive to implementing the strategy of sustainable economic development based on domestic demand and optimizing the allocation of resources.
(3) Vigorously develop various forms of foreign trade.
China should effectively speed up the implementation of the "going out" strategy, establish an overseas investment insurance system and a risk early warning mechanism, encourage capable enterprises to invest abroad, and increase energy and resource-based foreign investment.
Enterprises should not only regard exchange rate as the only means to stimulate exports, but should focus on constantly improving the international competitiveness of export enterprises and products, take trade innovation as the starting point, innovate trade concepts, promote services with efficiency, greatly improve China's export capacity and enhance its position in foreign trade.
(4) Adjust the trade structure of China's import and export commodities, change the mode of trade growth, and promote industrial upgrading.
From the current structure of China's trade goods, it can be seen that the rapid growth of China's exports mainly depends on the advantages of quantity and price, while the advantages of technology and marketing management are less in export products, and the added value of products is lower. In addition, it is precisely because of the labor-intensive and low added value of China's export commodities that its demand elasticity in foreign markets is small, and it also faces fierce competition from many emerging developing countries such as India. China must strive to increase the proportion of manufactured goods in export commodities, improve the supply elasticity of export products, improve the technical content of export commodities, reduce the external dependence of high-tech products, and reduce the adverse impact of RMB appreciation on China's trade through efforts in import and export.
(V) The transformation of China's development strategy, from export-oriented to domestic demand.
As the most populous developing country in the world, it is very dangerous to rely solely on the export-oriented development strategy. Overreliance on the international market is vulnerable to the impact of foreign markets, thus affecting the sustainable development of the economy. Therefore, it is necessary to change China's over-export-oriented development strategy from export-oriented to domestic demand-oriented. The policy of expanding domestic demand can also internally absorb the declining demand for China's export products in foreign markets due to the appreciation of RMB, improve China's import and export trade surplus and avoid economic losses for domestic enterprises.