Secondly, another result of RMB appreciation is weakening foreign investment in China. This is directly related to the first influence. The reason why a large number of foreign investors invest in China is based on the current fixed exchange rate between RMB and USD. If the RMB appreciates, many foreign investors will change their investment plans in China. In 2002, China attracted a record $52.7 billion in foreign investment, surpassing the United States for the first time to become the country that attracted the most foreign investment that year. Although there are risks in introducing foreign capital, which has a negative impact on China's economic growth, on the whole, foreign investment in China plays an important and positive role in China's economic modernization and China's economic growth.
Third, the current appreciation of RMB is not conducive to China's political and economic stability. Although China has experienced rapid development for many years, due to its poor economic foundation and large population base, it has long faced the strong pressure of nearly 300 million people being employed or semi-unemployed, and needs to maintain high economic growth; On the surface, the appreciation of RMB increases the purchasing power of RMB, which is also conducive to improving China's international image, but in fact, it is easier to fall into the illusory trap that the economic prosperity brought by RMB appreciation is out of touch with reality;
Fourthly, the value of RMB is not completely fixed, and it is not true to say that the RMB in China is completely controlled by the government and has been fixed. Since 1994, the RMB has actually appreciated twice. The first price increase was clear. 1997 was converted from 1994 1 USD to 8. 70 RMB to 1 USD to 8. 28 yuan, an appreciation of nearly 5 percentage points, the second appreciation is actually. Although RMB did not appreciate in a clear sense, in the East Asian financial crisis of 1997- 1998, when the currencies of Southeast Asian countries depreciated sharply, especially when Japan, the largest economic entity in East Asia, allowed the yen to depreciate, although the nominal exchange rate of RMB in China remained stable at 1. Around 28 yuan, but in the case that the currencies of East Asian countries depreciate by 20-50% or more, insisting on not depreciating is actually appreciation; Some experts believe that the RMB has actually appreciated for the third time, that is, the US dollar has depreciated by about 10% in recent years, while the RMB has not depreciated, but actually appreciated.
Fifth, China has not prepared for the free floating mechanism of the RMB, and rashly liberalized the control of the RMB, allowing the RMB to fluctuate with the changes in the international market, which will have huge financial risks. For example, in recent years, hundreds of billions of dollars have fled legally or illegally due to loopholes in China's foreign exchange control. Some experts even estimate that the outflow of US dollars from China exceeds that of US$ 500 billion introduced by China. If the expectation of RMB appreciation exists, it will lead to a lot of speculative foreign investment, continue to oppress RMB appreciation, and lead to the market value of RMB divorced from its actual value. Once there is a problem in China's economy, even the malicious manipulation or blind flow of artificial speculative funds will lead to a disastrous financial crisis. It is one thing for China to do its duty in the economic crisis of East Asian countries and insist that people should rise and not depreciate (actually appreciate), but it is another matter as a long-term market mechanism. Only when China's foreign exchange control, foreign exchange mechanism, investment system and financial system are further improved can the RMB rise and fall according to market changes.
Sixth, China insists that the RMB will not appreciate for the time being, which fully considers the need of stabilizing the world economy and is also a contribution to the stable development of the world economy. First of all, during the period of low-speed growth of the three major economies of Europe, America and Japan, the long-term high-speed development of China's economy contributed to the development of the whole world economy. China's total economic output only accounts for about 4% of the world's total economic output, but its contribution to world economic growth has reached about 15- 16%. A large number of low-priced products exported by China have brought benefits to hundreds of millions of consumers around the world, and China's economy has remained stable, which is a contribution to the world economy. On the contrary, if China's economy falls into chaos or even retrogression because of RMB appreciation, it will also be a negative factor for the world economy; Second, some American and Japanese media have ulterior motives to blame China's economic exports for some problems in the US-Japan economy, which is also groundless. China's economy has little to do with the economic growth of the United States and Japan: both China's economy and the United States' economy maintained rapid growth in the middle and late 1990s, while Japan's economy was already in a downturn as early as the 1990s, which has no direct relationship with China's rapid economic growth; China's exports only account for about 3% of the total world trade, and it is impossible to control the US-economy with a huge base; On the contrary, the rapid economic growth of China has also promoted the economic development of Southeast Asian countries to some extent. In recent years, these countries' exports to China have increased substantially. Even Japan is actually one of the beneficiaries of China's economic growth to a certain extent. China has replaced the United States as the largest importer. Third, China's export profits are not monopolized by China. American and Japanese capital and other foreign capital invested heavily in China actually took away most of China's export interests; Some experts pointed out that the driving force of China's export mainly lies in the investment strategy of foreign capital in China, rather than the rapid development of China's local industries; Fourth, China's exports mainly rely on China's low labor costs, the improvement of technology and quality, and the improvement of infrastructure, rather than the advantage of low currency; Finally, even though the China administration obtained a large amount of foreign exchange reserves from China, it actually returned to the United States in the form of purchasing a large amount of US Treasury bonds. In June 2003, China purchased US Treasury bonds as high as US$ 654.38+022 billion, becoming the second largest holder of US Treasury bonds, which played a positive role in stabilizing the US economy.
RMB appreciation is the antonym of devaluation.