First of all, RMB depreciation can stimulate exports, stimulate economic growth and curb unemployment. Secondly, the devaluation of RMB will shake the confidence of foreign investors in holding RMB in the short term. This will undoubtedly eliminate the hidden inflationary pressure and prevent China from experiencing a financial crisis similar to that of the United States. Third, the buying price of dollars in cash has increased. The cash price of dollars sold by individuals to banks is about 0. 12 yuan, which is an incentive for residents to hold and buy dollars. I wonder if this is conducive to passing on the risk of the country holding US dollars? Fourth, speaking of the 4 trillion plan to expand domestic demand, if the RMB depreciates, will this 4 trillion domestic demand plan shrink (in fact, there is no need to invest so much money)? Will this make RMB the best currency in the world in the near future? Of course, I also know that RMB depreciation is a double-edged sword. Under the current economic situation, RMB depreciation will have an impact on Chinese mainland's foreign investment, imports, foreign exchange reserves and the formulation of economic policies. But as far as my personal analysis is concerned, the advantages of RMB depreciation at this stage still outweigh the disadvantages. The appreciation of RMB is indeed a complicated and realistic problem, and it is a double-edged sword. Only by sizing up the situation and grasping the advantages and disadvantages can we respond rationally, forcefully and calmly. The positive effects of moderate appreciation of RMB are as follows:

■ It is conducive to continuing to promote the reform of the exchange rate system and even the financial system. On July 2, 2005, the People's Bank of China announced the implementation of a managed floating exchange rate system based on market supply and demand and with reference to a basket of currencies. More flexible and in line with the direction of reform.

■ Conducive to solving the imbalance of foreign trade. Due to the single exchange rate system pegged to the US dollar, China products have always maintained the advantage of "cheap". Within the range that most domestic enterprises can bear, the moderate appreciation of RMB shows that China is willing to sacrifice its own interests for its trading partners, thus alleviating the imbalance of international payments to some extent.

■ It is conducive to lowering the prices of imported goods and reducing the production costs of export enterprises mainly importing raw materials. Appreciation can reduce the domestic prices of some imported goods and benefit domestic consumers. At the same time, because many export enterprises are actually "double-headed enterprises", most of the raw materials for export products come from abroad. After the appreciation of RMB, enterprises can pay less RMB for importing goods with the same dollar unit, which actually reduces the production cost.

■ It will help reduce the cost of outbound travel for China citizens and encourage more citizens to go abroad. In recent years, more and more compatriots have gone abroad to see the world. China people have a habit of going abroad, that is, converting commodity prices into RMB to see if it is worth it, and the result is too worthless. A moderate appreciation of the renminbi means that our money will be more valuable.

■ It is conducive to prompting domestic enterprises to strive to improve product competitiveness. The long-term low-cost occupation of the international market by Chinese enterprises is actually the result of internecine competition, which reduces their own profits and is beneficial to foreign importers. If the price is raised after appreciation, the market may be lost; Failure to raise the price may increase the loss. Therefore, we can only improve productivity and scientific and technological content, reduce costs, improve quality and enhance competitiveness.

■ It is conducive to reducing the demand of foreign funds for domestic housing purchase and reducing the real estate bubble. The appreciation of RMB has increased the cost for foreign investors to buy houses in Chinese mainland. If the external demand is reduced, it will undoubtedly alleviate the so-called shortage of supply, cool down the feverish domestic real estate market and have a positive effect on lowering housing prices. The adverse effects of the rapid appreciation of RMB are as follows:

■ It will reduce the profit margin of enterprises in a certain period of time, reduce the competitiveness and share of enterprises in the international market, and lead to a decrease in exports. Although China's foreign trade surplus has reached a new high at present, it shows that exports have not been substantially affected, but the voice from enterprises is getting stronger and stronger;

■ This will intensify competition in some domestic fields. Some manufacturers of export products will join the domestic market competition, which will make the already fierce domestic market competition more intense. Under the principle of survival of the fittest, some enterprises may close down;

■ It may lead to relative overproduction in some fields. If 40% ~ 60% of export commodities such as food, clothing, stationery and daily necessities are transferred to the domestic market, it will inevitably lead to oversupply of some commodities in a certain period of time;

■ It will aggravate the employment pressure, especially many migrant workers will lose their jobs. While importers in the United States and other countries reduce imports, local people may switch to buying domestic products, which will increase their employment in their own countries;

■ It will increase the cost of foreign investment in China, and the utilization of foreign capital may show a gradual downward trend. Non-export-oriented foreign-funded enterprises, in particular, do not enjoy the benefits brought by appreciation to imported raw materials, but increase investment costs, including labor costs, and compress profit margins;

■ It will increase the cost of overseas tourists traveling in the Mainland and reduce the foreign exchange earned by tourists coming to China and traveling. Tourists have to spend more or lower their consumption standards, which may lead them to travel to other countries or regions.

The rapid appreciation of RMB not only has a negative impact on China. In the case of increasing international economic exchanges and dependence, both favorable and unfavorable influences are two-way, and the turmoil of one party will also lead to instability of the other, especially when one party's trade depends on the other party to a certain extent. Therefore, if the export of domestic enterprises and industries decreases due to appreciation, it is difficult to ensure that our trading partners are unscathed. The direct consequence of excessive appreciation pressure is that it is difficult for many people in many countries in Europe and America to enjoy China products with good quality and low price. Whether we switch to domestic products or use substitutes from other countries, it may lead to rising domestic prices, increasing consumer spending and declining actual living standards.

Appreciation has advantages and disadvantages, and the key is to grasp the progress and degree. Facing the pressure of continuous appreciation, we should calmly and calmly deal with it, taking into account the reality and the future.