First of all, what does a loose currency cause-the depreciation of the US dollar-the appreciation of the RMB-the appreciation of the RMB exchange rate.
2. Grasp these key factors, and then we will analyze them in detail.
(1) depreciation of the US dollar-leading to the depreciation of a large number of US dollar foreign exchange reserves in China. China people have done so much work for foreigners without any return, and their IOUs are shrinking.
(2) RMB appreciation-the impact of import and export-the increase of unemployment rate. Foreigners have to spend more dollars to buy things in China, things in China are no longer cheap, and the poor export processing industry has to close down one after another, which is undoubtedly a huge blow to China's economy. The unemployment rate of the poor will rise, aggravating social instability.
(3) the depreciation of the dollar-the influx of hot money-inflation-the increase of asset bubbles. What if the dollar is worthless? In this way, foreign capital will pour into China one after another, and the asset price of China will rise again. This is called imported inflation. The people of China will suffer from inflation.
(4) RMB appreciation-in order not to appreciate and affect the import and export industry, we must adjust the monetary policy-so we have to automatically depreciate more currencies, depreciate with the US dollar, and then inflate. . .
3. Understand the above, then look at the following, and make a concrete analysis ~ ~ ~ ~
I. Impact on RMB exchange rate
Because of the different names and values of currencies in the world, one country's currency should set an exchange rate for other countries' currencies, that is, the exchange rate, which is the price of another currency expressed in one currency, and the RMB exchange rate is the ratio of RMB to another country's currency. The implementation of quantitative easing policy in the United States is to actively depreciate and promote abundant domestic liquidity. The weakening of the US dollar against other major currencies has put pressure on other countries' currencies to appreciate. Obviously, it has also had a certain impact on the RMB exchange rate, making the RMB continue to rise and the RMB exchange rate fall. 165438+1On October 5th, China's Vice Foreign Minister Cui Tiankai expressed "concern" about the actions of the Federal Reserve. He said: "The finance minister of a country said that spamming money is tantamount to manipulating the exchange rate in disguise." Only by maintaining the stability of RMB will it be beneficial to China's economic development and global economic recovery.
Second, the impact on foreign exchange reserves.
China is an important buyer of US Treasury bonds. Moreover, China's foreign exchange reserves are mainly in US dollars. As long as the dollar still occupies the leading position of the most important international currency, this situation will continue in the next one to twenty years or even longer, and there will be no fundamental change. Judging from the past history, the United States, relying on its special position of "dollar hegemony", always ignored the interests of other countries and adopted the policy of alternating appreciation and depreciation of the US dollar in order to solve or alleviate the problems and contradictions in the domestic economy. The quantitative easing monetary policy of the United States is essentially a measure that the United States continues to implement the proliferation and depreciation of the dollar. The purpose is obvious, which is to dilute the creditor's rights of countries to the United States. It can also be understood that the depreciation of the US dollar is expected to continue or accelerate in the future. From this point of view, it is based on the chain reaction of recent interest rate hikes in China, India and other countries, with an obvious purpose: "RMB is undervalued, and there is still a lot of room for appreciation". In the final analysis, it is actually to accelerate the dilution of the huge dollar claims held by China and other countries, so as to reduce the US claims held by China and other countries in exchange rate comparison. By the end of June 2009, China held US$ 776.4 billion in US Treasury bonds, accounting for 1/3 of China's more than 2 trillion foreign exchange reserves. Once the dollar falls, it will suffer huge losses. Affected by the quantitative easing policy, the US dollar has depreciated, and the corresponding price of China's foreign exchange reserve assets denominated in US dollars has shrunk dramatically. On the other hand, the decline of long-term yield will also lead to huge interest losses.
Third, the impact on import and export.
Exchange rate is one of the most important and influential economic variables in today's open economy. Its change will directly change the comparison of commodity prices at home and abroad, and directly have an important impact on a country's international competitiveness and the profits of exporters. Regarding the impact of exchange rate fluctuations on exports, the mainstream view abroad is that the increase of exchange rate fluctuations will increase the risks of exporters, thus inhibiting their export impulses. Therefore, the appreciation of RMB will restrain China's exports, while China's main export target is the United States. In recent years, the United States has a trade deficit, and appreciation will slow this situation. The quantity, price and value of imported products depend on many factors, such as domestic demand, real effective exchange rate of RMB, import tariff rate, international market price and foreign demand. Relatively speaking, the rise of China's currency will stimulate foreign imports to China, and the impact of RMB's real effective exchange rate on import value is twofold. The appreciation of RMB's real effective exchange rate will directly reduce the price of imported products and increase the import quantity, but the increase of import quantity will stimulate the increase of import price and indirectly inhibit the increase of import quantity.
Fourth, increase the inflationary pressure in China.
The announcement of the second round of quantitative easing monetary policy by the Federal Reserve will definitely have a negative impact on emerging markets, which will lead to capital flowing to emerging market countries to a great extent, and China is one of these emerging countries, which will lead to an increase in the price of imported goods, thus leading to inflation, that is, imported inflation, which will become more obvious with the passage of time. China is facing enormous asset price pressure. At present, the pressure of rising price level can not be ignored. At the end of the year, prices may exceed the expectations at the beginning of the year, and actual inflation may also rise. There is still great uncertainty about the inflation situation next year.
The Influence of verb (abbreviation of verb) on Unemployment Rate
China's goods have always entered the world market with "low price and good quality". This quantitative easing policy will inevitably affect the export of China's products, have a great impact on export-oriented enterprises, and increase the risks of exporters, so as to curb the export impulse of manufacturers, promote the increase of enterprise costs, reduce the export competitiveness of products, lead to the closure of enterprises, and then lead to serious unemployment and a sharp economic decline. On the other hand, it will reduce the attractiveness of foreign investment, reduce foreign direct investment in China, and then directly reduce employment opportunities; With the inflow of hot money, the interest rate increase policy of China government was triggered. In this way, the loan cost of enterprises increases, the enthusiasm of enterprises to invest is restrained, the loan amount of enterprises will decrease, and the scale of enterprises will not expand or even shrink, which will bring great pressure to the employment rate of society, thus causing further growth of unemployment rate.
Sixth, the asset bubble has increased.
The appreciation of RMB caused by quantitative easing monetary policy will cause a large inflow and outflow of funds, resulting in macro-financial risks. Secondly, judging from the actual situation of RMB appreciation in the past, the inflow of hot money (also known as hot money or speculative short-term capital, short-term speculative capital that only pursues the highest return and flows rapidly in the international financial market with the lowest risk) is worrying and must be vigilant. The faster the appreciation, the higher the expectation of international investors for the continuous appreciation of RMB, and the larger the inflow of hot money, which will have a spiral effect. Hot money flowing into China will cause local overheating and local supercooling. Hot money mainly acts on real estate and stocks, which will lead to a further rise in China's real estate price, stock price and asset bubble. The stock market will give birth to a new bubble, create a false economic "warm current", mislead some citizens and investors, and further aggravate the market speculation.
Seven. Passive adjustment of monetary policy
The implementation of quantitative easing policy in the United States has a direct impact on China's monetary policy, which will make China passively adjust its monetary policy. If China does not follow the quantitative easing policy of the United States, there will probably be greater pressure on the appreciation of the RMB, which will bring more capital inflows and have a greater impact. The obvious increase in foreign exchange holdings and foreign exchange reserves since September indicates that the rate of foreign exchange inflow into China is accelerating. The rapid growth of China's foreign exchange reserves will undoubtedly bring great appreciation pressure to the RMB. In order to maintain the stability of RMB exchange rate, the central bank will be forced to increase the base currency, which will aggravate the excess liquidity. In order to effectively control the situation of excess liquidity, the central bank can only take passive austerity measures. Once the central bank starts to raise interest rates, it will further widen the spread between the RMB and the US dollar and promote the appreciation of the RMB. These two factors further attract the inflow of short-term international capital, which makes the People's Bank of China passively increase currency issuance.