Exchange rate, also known as foreign exchange rate, foreign exchange rate or foreign exchange market, refers to the exchange rate between two currencies, and can also be regarded as the value of one country's currency against another's currency. Specifically, it refers to the ratio or parity between one country's currency and another country's currency, or the price of another country's currency expressed in one country's currency. Exchange rate changes have a direct regulatory effect on a country's import and export trade. Under certain conditions, by devaluing the local currency, that is, letting the exchange rate rise, it will promote exports and restrict imports; On the other hand, the appreciation of the domestic currency, that is, the decline of the exchange rate, plays a role in restricting exports and increasing imports.
The positive impact of RMB appreciation;
First, expand the demand of domestic consumers for imported products, so that they can get more benefits. The most obvious change brought by the appreciation of RMB to domestic consumers is that the RMB in hand is "more valuable". If you study abroad or travel, you will spend less money than before; In other words, spending the same money can make you do more things than before. If you buy imported cars or other imported products, you will find that their prices have become "cheap" and ordinary people have gained more benefits. Second, reduce the cost burden of imported energy and raw materials. China is a country lacking in resources. With the increase of international energy and raw material prices, domestic enterprises are bound to bear more and more heavy cost burden. If the RMB appreciates to a reasonable level, it will greatly reduce the burden of importing energy and raw materials in China, and enable domestic enterprises to reduce costs and enhance their competitiveness. Thirdly, we should use the "reverse mechanism" to promote the adjustment of China's industrial structure and improve China's position in the international division of labor. For a long time, China relied on the expansion of cheap labor-intensive products to implement the export-oriented strategy, which made the export structure not optimized for a long time and made China play the role of "world wage earners" in the international division of labor. Appropriate appreciation of RMB will help export enterprises to improve their technical level and product grade, thus promoting the adjustment of China's industrial structure and improving China's position in the international division of labor. Fourth, it helps to ease the relationship between China and its major trading partners. In view of the rapid development of China's export trade and the increasing trade surplus, China's major trading partners have repeatedly demanded RMB appreciation. In this regard, simply saying "no" seems encouraging, but it doesn't help. Because this will continue to worsen China's relations with them and set obstacles for China's foreign trade and economic development. In recent years, the sharp increase of anti-dumping cases against China is a very convincing evidence. A proper appreciation of RMB will not only help to ease the relationship between China and its major trading partners, reduce economic and trade disputes, but also help to establish a good international image of China as a big country. Fifth, it helps to reduce the threat of "foreign exchange holdings" to the independence of China's monetary policy. Since 1994, there has been a big "double surplus", which has led to a high foreign exchange reserve in China and seriously damaged the independence of China's monetary policy. Therefore, an appropriate appreciation of RMB can be closer to the market exchange rate level and alleviate the adverse effects of foreign exchange holdings.
Second, the negative effects of RMB appreciation are as follows: First, it will have an impact on China's export enterprises, especially labor-intensive enterprises. In the international market, the export price of China products, especially labor-intensive products, is far lower than that of similar products in other countries. The reason is that China's labor price is low, and the fierce domestic competition makes export enterprises compete to adopt the strategy of selling at a low price and paying no expense. Once the RMB appreciates, in order to keep the bottom line of RMB price unchanged, the price of China's export products in foreign currency will increase and weaken its price competitiveness; If the foreign currency price of export products remains unchanged, it will inevitably squeeze the profit space of export enterprises and have an impact on export enterprises, especially labor-intensive enterprises. Second, it is not conducive to the introduction of foreign direct investment in China. China is the country that attracts the most foreign direct investment in the world. At present, foreign-funded enterprises are playing a more and more obvious role in China's industry, agriculture, service industry and other fields, which has a great impact on promoting technological progress, increasing employment and expanding exports, thus promoting the development of the entire national economy. The appreciation of RMB will not have a substantial impact on foreign investors who have already invested in China, but it will have a negative impact on foreign investors who are about to invest in China, because it will increase their investment costs. In this case, they may transfer their investment to other developing countries. Third, increase domestic employment pressure. The impact of RMB appreciation on export enterprises and overseas direct investment will eventually be reflected in employment. Because most of China's export products are labor-intensive products, blocked exports will inevitably increase employment pressure; Foreign-funded enterprises are one of the departments that provide the most new jobs, and the slowdown of foreign investment growth will make the domestic employment situation more severe. Fourth, it affects the stability of financial markets. If the RMB appreciates, a large number of short-term speculative funds abroad will seize the opportunity to speculate on the RMB exchange rate. Under the condition that the development of China's financial market is not perfect, it will easily lead to financial and monetary crisis. In addition, the appreciation of RMB will further increase the actual amount of existing non-performing assets of banks in US dollars, which is not conducive to the reform of the entire banking industry and the adjustment of debt structure. -that is, the "hot money" now.