The internal influencing factors are balance of payments, foreign exchange reserves, price level and inflation, economic growth and interest rate level.
First, the RMB exchange rate has not been adjusted for nearly 10 years since 1994, and China's economy and national strength have undergone profound changes during this 10 year.
Second, since the 1990s, some authoritative international institutions and trading partners have always believed that the RMB is undervalued to varying degrees.
Third, according to the theory of international economics, the excessive foreign exchange surplus itself indicates that the foreign currency is overpriced, the local currency is overpriced and the local currency is under pressure to appreciate.
Fourth, since 200 1, all major currencies in the world, including Southeast Asian countries, have greatly appreciated against the US dollar. Only the exchange rate of RMB against the US dollar has not been adjusted, that is, the RMB has actually depreciated sharply against other currencies following the US dollar. Not to mention whether the RMB was excessively devalued or undervalued in the 1990s, 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 the RMB against the US dollar has remained unchanged. Judging from this alone, the value of the RMB against the US dollar may be underestimated.
The RMB is fixed with the US dollar, and the appreciation of the RMB is reflected in the form of the decline of the RMB exchange rate, that is, the amount converted from 1 US dollar into RMB is reduced.