For example, the positive impact of RMB appreciation in China this time. The impact of exchange rate changes on the economy is multifaceted. The beneficial effects of RMB exchange rate appreciation are mainly manifested in three aspects: first, it stimulates the increase of imports, the appreciation of RMB exchange rate, and the prices of foreign consumer goods and means of production are cheaper than before, which is conducive to reducing import costs; Second, it is conducive to improving the environment for attracting foreign investment. The appreciation of RMB exchange rate can increase the profits of foreign-funded enterprises that have invested in China, thus enhancing investors' confidence and prompting them to further invest or reinvest; The appreciation of RMB exchange rate will attract a large amount of foreign investment into China's capital market, and the proportion of indirect investment will further increase. Third, it is conducive to reducing the pressure of debt repayment. With the rise of RMB exchange rate, the amount of local currency required for servicing outstanding foreign debts decreased accordingly, thus reducing the foreign debt burden to some extent.
(2) The negative impact of RMB exchange rate appreciation. However, the negative impact of RMB exchange rate appreciation on China's economic growth can not be ignored, especially in the current situation, the negative impact of RMB exchange rate appreciation on China's economy is more prominent:
First, curb export growth. After the appreciation of RMB exchange rate, the cost of export enterprises will increase accordingly. Under the condition that the international market price remains unchanged, the decline in export profits will seriously affect the enthusiasm of export enterprises; If export enterprises raise prices in order to maintain a certain profit, it will weaken the international competitiveness of export products, which is not conducive to the continuous expansion of exports and the improvement of products' share in the international market. The appreciation of RMB exchange rate will hurt the price competitiveness of a large number of labor-intensive export products in the international market.
Second, it will lead to further expansion of foreign debt. With the appreciation of RMB exchange rate, a large amount of capital will be attracted to China's capital market, and the scale of China's foreign debt will expand accordingly.
Third, it affects the stability of the financial market. Most of the capital markets are active in international hot money, which is a potential factor of financial market turmoil because of its large scale, fast flow and strong profitability. In the case that China's financial supervision system needs to be further improved and the development of financial market is relatively lagging behind, a large amount of short-term capital flows into the capital market through various channels, which will easily lead to a monetary and financial crisis and adversely affect the sustained and healthy development of China's economy.
Fourth, it affects the effectiveness of monetary policy. Due to the pressure of RMB exchange rate appreciation, in order to maintain the basic stability of RMB exchange rate, the central bank was forced to buy a large amount of foreign exchange in the foreign exchange market, thus increasing the base currency in the form of foreign exchange holdings. On the surface, the money supply is growing continuously, but the difference of supply structure causes the inefficient use of funds, which affects the effectiveness of monetary policy.
Fifth, increase employment pressure. At present, export enterprises and foreign-funded enterprises have provided new employment opportunities in China. Therefore, the appreciation of RMB will inhibit or hit exports and ultimately affect employment. Under the extremely severe employment situation in China, the appreciation of RMB exchange rate is likely to worsen the employment situation.
Although China's balance of payments is a "surplus" at present, this "surplus" is unstable, and the lack of sustained internal motivation for RMB exchange rate appreciation will affect China's balance of payments and the stability of financial markets.
Weighing the pros and cons, the RMB exchange rate should not appreciate.
Faced with the pressure of RMB exchange rate appreciation, it is really a dilemma: RMB exchange rate appreciation can make China gain some benefits in attracting foreign investment, repaying foreign debts and buying foreign goods, but RMB exchange rate appreciation will increase the relative prices of China's export commodities and restrain exports. Therefore, whether our government can take appreciation measures under certain international pressure fundamentally depends on the needs of domestic economic development, the structure of import and export, and the comprehensive judgment on the relationship between supply and demand of goods and money in the international market.
Recently, the international call for RMB exchange rate appreciation is rampant. US Treasury Secretary Si Nuo said in mid-June 2003 that the United States supports China to implement a more flexible exchange rate system; Prior to this, Duysen Berg, President of the European Central Bank, called China's exchange rate system a "problem", and Japanese officials repeatedly called on the China administration to let the RMB appreciate in order to rebuild the trade balance. The International Monetary Fund also suggested that China should consider allowing the floating exchange rate system managed by RMB to be more flexible. This shows that the RMB exchange rate issue has become an extremely important issue affecting China's economic development and international economic relations at present and in the future. We must attach great importance to this and never take it lightly.