"Simply put, if China has $2 trillion in foreign exchange, it is worth RMB 1:8. If it appreciates to 1:6, it will only be 12 trillion, and 4 trillion will be gone. "

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This friend has a misunderstanding. China's foreign exchange management is a compulsory foreign exchange settlement system, that is, the foreign exchange earned by enterprises must be converted into RMB at the official price, and enterprises basically have no foreign exchange (this system has been slightly relaxed recently). At present, the official so-called "foreign exchange" mostly comes from enterprises, not the real government's own money.

When enterprises need to use foreign exchange, they must buy it from the government, so that when the RMB appreciates, it is cost-effective for enterprises to exchange foreign exchange, but the government will lose money.

After the appreciation of RMB, it will be more expensive for Americans to buy things from China, so they will import less and buy more local products. This can increase the sales of American products and increase their employment.

In the process of appreciation, only the China government will suffer, so they don't want to appreciate.