In the case of trade deficit, China's net foreign exchange income decreases, the supply of foreign exchange trading centers decreases, the purchase of equivalent foreign exchange requires RMB to increase, the price of foreign exchange rises, and the corresponding RMB depreciates. This is the role of the market mechanism.

The reduction of foreign exchange income will also lead to the reduction of foreign exchange reserves. The state will ensure the needs of foreign debt repayment and import payment, and will also take measures to encourage exports to increase foreign exchange income. One of the means is to encourage RMB depreciation and improve the price competitiveness of export commodities. This is the government's response.