Q: What impact will the depreciation of the US dollar have on the global economy? Yi Xianrong: According to historical facts, every time the dollar depreciates, the global economy will be in turmoil. We can see that in the 20th century, the dollar experienced four major devaluations. The first time occurred in 1934. President Roosevelt banned private ownership of gold, and the dollar depreciated by 4 1%. 197 1 year, the dollar depreciated for the second time. The reason is that President Nixon announced the termination of the fixed exchange rate between the US dollar and gold and imposed an import tax rate of 10%, which caused great confusion in the western currency market, and the US dollar depreciated by nearly 8%. Later, due to the serious balance of payments deficit in the United States, 1973 suffered two consecutive financial crises, and the United States once again announced the depreciation of the dollar 10%. The fourth dollar depreciation lasted 10 years. First, 1985, due to the serious twin deficits problem in the United States, in order to improve the imbalance of international payments, the United States induced the dollar to depreciate and increased the international competitiveness of its products. This is the famous Plaza Accord, which led to the rapid appreciation of the yen and the long-term loss of the Japanese economy. After 2002, the dollar began to weaken again, which triggered the fifth sharp depreciation of the dollar. Since February 2002, the US dollar exchange rate index 1 10 has fallen sharply, fell below the 80 mark in April 2007, and hit a record low of 7 1 in June 2007, which means that the depreciation of the US dollar has reached 35% in recent years. It can be said that it is the depreciation of the US dollar that has led to great changes in the international financial order. It has also become the root of the current international financial market turmoil. It can be said that the huge fluctuation of the US dollar exchange rate means the reshuffle of the interests of different currencies around the world and the adjustment of the relationship between supply and demand. Studies have shown that since 2006, the proportion of US trade deficit in GDP has dropped from 6.8% in the fourth quarter of 2005 to 5.7% in the first quarter of 2007. But why does the dollar depreciate when the US trade deficit has been decreasing? It is found that the depreciation of the US dollar reduces the willingness of central banks to hold US dollars, and the holdings of US dollar assets in foreign exchange reserves decrease. If foreign investors hold dollars again, the relationship between supply and demand of dollars will definitely change greatly. The monetary structure of the entire international financial market has also undergone tremendous changes. For example, some countries have abandoned the exchange rate policy linked to the US dollar for many years. For example, in March 2003, Russia announced that it would end its exchange rate pegged to the US dollar and peg it to a blue secondary currency, as did Malaysia. At the same time, some countries in the Middle East have abandoned the policy of pegging to the US dollar. However, the exchange rate policy changes in these countries have been greatly influenced by international foreign exchange speculators, which will further push down the exchange rate of the US dollar. In addition, the US dollar is the most common pricing currency in international import and export trade, and the huge fluctuation of the US dollar exchange rate will definitely affect the huge fluctuation of many international commodity prices in the world market. For example, why has the international crude oil price fluctuated more and more recently? Although there are many reasons, such as geopolitical conflicts, speculation by market investors, changes in the relationship between supply and demand of oil in the market, the change of the exchange rate of the US dollar is still the most important. According to relevant research, many international primary products and financial products are basically denominated in US dollars. Therefore, if the dollar price fluctuates, it means that the price of products denominated in dollars will also fluctuate greatly. For example, since 200 1, crude oil denominated in dollars has increased by 286%; However, if it is denominated in euros, its price will only increase by 147%, more than doubling. Therefore, the rapid rise of oil price and gold price in the international market in recent years are all related to the depreciation of the US dollar. Q: What impact does the depreciation of the US dollar have on China's economy? First, the impact on China's import and export trade.

China is increasingly dependent on international trade in terms of labor employment, import and export of goods and services, and transfer of excess capacity. Since China joined the WTO for more than three years, the growth rate of China's foreign trade has continuously exceeded the growth rate of GDP. The dependence on foreign trade in 200 1 year was 44%, which increased to 60% in 2003 and exceeded 70% in 2004. In the 9.5% GDP growth in 2005, the contribution rate of net exports reached 3.6%. Foreign trade exports directly attract more than 1 100 million employed people. Among them, textile trade directly attracts about 20 million employees, and indirect employees are about 1 100 million. At present, China has become the world's largest exporter of textiles, clothing, shoes, clocks, bicycles, toys, sewing machines and other products. 90% of domestic DVD production and 60% of mobile phone production are exported. In 2004, China produced 5.9 billion pairs of shoes and 654.38+300 million sets of DVDs, which accounted for more than 60% and 50% of the world sales respectively, and relied heavily on the international market.

The United States has always been an important trading country and the largest export market country of China, and its exchange rate changes will have a direct impact on Sino-US trade. Generally speaking, in 2005, the total amount of silk, silk products and clothing imported by the United States from China increased by 50.4% compared with 2004, exceeding $20 billion. This may be related to the improvement of the domestic economic situation in the United States, such as the decrease of unemployment rate and the increase of per capita hourly wage, and may also be affected by the increase of domestic prices and the downward adjustment of average import prices. As many countries that trade with China mostly settle accounts in US dollars, the exchange rate change of US dollars will have a comprehensive impact on China's trade. Since the exchange rate reform in China in July 2005, by the end of 2005, although the average monthly trade volume in China increased by 23.35% year-on-year, the growth rate showed signs of slowing down. For example, in August, September and June of 2005, the average monthly trade volume decreased by about 2%. According to the medium and long-term appreciation trend of RMB and USD, China's import and export trade volume will decrease, while imports will gradually increase and exports will gradually decrease.

Second, the impact on China's foreign debt.

In the long run, the change of US dollar exchange rate will affect the currency structure and scale of China's foreign debt. According to the report on China's balance of payments in the first half of 2005 issued by the State Administration of Foreign Exchange, by the end of June 2005, the total foreign debt of China was $26,665,438+76 million (excluding Hong Kong, Macao and Taiwan). The analysis of this report shows that in the first half of 2005, the total scale of China's foreign debt continued to rise, but the growth rate declined, increasing by $654.38+08.684 billion compared with the end of 2004, with an increase of 7.5% and a year-on-year decrease of 9.8 percentage points. There are two main reasons for this: First, the cost of borrowing foreign debts has increased. Since the end of June, 2004, the Federal Reserve has adjusted the interest rate nine times in a row, raising the federal funds rate to 3.25%, gradually narrowing the spread between local and foreign currencies and increasing the foreign debt cost of enterprises. Second, standardizing foreign debt management policies has played a positive role in controlling the excessive growth of foreign debt. Judging from the trend of the relative depreciation of the US dollar against the RMB, the cost of borrowing foreign debts in China will be reduced, thus promoting the increase of foreign liabilities. From the perspective of foreign debt currency structure, by the end of June 2005, US dollar debt accounted for 66.8%, an increase of 1.8 percentage points over the end of 2004; The debt ratios of Japanese yen and euro were 14. 1% and 8. 1%, respectively, with little change compared with the end of 2004. Recently, the exchange rates of USD, EUR and JPY have all depreciated relatively against RMB, but the depreciation of JPY is the largest, reaching 9.11%; Followed by the euro, the depreciation rate is 5.88%; The dollar is relatively the smallest. Therefore, from the current situation, the external debt costs of the Japanese yen and the euro are relatively reduced, and the proportion of borrowing in their currencies is likely to increase.

Third, the impact on China's foreign exchange reserves.

For a long time, China's foreign exchange reserves were dominated by US dollars, which was higher than that of many countries, accounting for 70%, while the ratio of Japanese yen to German mark was very small. With the weakening of the US dollar and the appreciation of the Japanese yen and the Japanese mark, this currency reserve structure has caused great losses to China. At present, China's trading countries are all over the world. Although the United States is China's largest trading country, there is little difference in the trade proportion between Japan and the European Union. The proportion of trade between ASEAN and China has gradually increased, and the appreciation trend of the yen and the euro has strengthened. Therefore, considering the complexity of reality, the currencies of China's foreign exchange reserves should be diversified, so as to enhance the stability of foreign exchange reserves and reduce the impairment losses of foreign exchange reserves. Judging from the foreign exchange changes between the US dollar and the Japanese yen and the euro announced by the Federal Reserve, the trend of the Japanese yen and the euro against the US dollar is similar: the Japanese yen appreciates against the US dollar, and the euro also appreciates against the US dollar; When the Japanese dollar depreciates against the US dollar, the euro will also depreciate against the US dollar. Therefore, we can use the relative trend of the Japanese yen and the euro against the US dollar to preserve the value of multi-currency reserves. However, we should also predict the long-term trend of the US dollar to determine the proportion of the US dollar in China's foreign exchange reserves.

Fourth, the impact on Chinese prices.

In recent years, China's consumer price index is low, and even negative growth in some years. The recent relative depreciation of the US dollar may increase the pressure of deflation in China, mainly in three aspects: First, due to the restrictions on the free convertibility of RMB, China must convert US dollars into RMB at the same time when introducing foreign capital. The depreciation of the dollar will reduce the cost of supporting RMB, reduce the demand for national finance and bank loans, and correspondingly reduce the supply demand for local currency, thus pushing down domestic prices. Second, due to the relative appreciation of RMB, the total value of China's imported products will lower its domestic selling price, thus lowering the price. Third, the relative appreciation and stability of RMB will promote China's foreign investment. The depreciation of the US dollar and the increase of domestic interest rates in the United States will increase China's foreign direct investment and securities investment, reduce the domestic circulation of RMB, and affect the price decline.