The favorable influence of RMB exchange rate appreciation on China's economy and its countermeasures Abstract: The issue of RMB appreciation has attracted the attention of all circles at home and abroad. By analyzing the impact of RMB exchange rate appreciation on China's economy at all levels, mainly from the aspects of industrial structure, export trade structure, enterprise transformation management mechanism, easing trade contradictions and the effectiveness of monetary policy, it is concluded that the final result of RMB exchange rate appreciation is that the advantages outweigh the disadvantages and the impact is positive. Under the background that the current appreciation has become a reality, China should actively take corresponding follow-up measures to stabilize and optimize the economic environment and minimize the possible losses caused by economic fluctuations (exchange rate changes). Keywords: exchange rate; RMB appreciation; Monetary policy. Introduction Under the new situation that China's traditional exchange rate system is increasingly unsuitable for economic development, the reform of RMB exchange rate system has become the focus of public opinion. "Perfecting the RMB exchange rate formation mechanism and maintaining the basic stability of the RMB exchange rate at a reasonable and balanced level" On the premise of effectively preventing risks, it is the established goal of the RMB exchange rate system reform to selectively and step by step relax the restrictions on cross-border capital transactions and gradually realize the convertibility of RMB capital projects. Whether the impact of RMB appreciation in the previous stage in China is positive or negative is a matter of opinion. Some scholars believe that the appreciation of RMB is very unfavorable to China's economic development. First, it is not conducive to overcoming deflation. Second, it is not conducive to attracting foreign investment. Third, it is easy to induce financial risks. Once the appreciation of RMB inhibits the rapid development of China's economy, it will not alleviate the deflationary pressure in East Asia, but will make East Asia's economy unstable. Of course, many scholars believe that RMB appreciation is of great benefit. For example, we can make better use of monetary policy and enhance macro-control ability; It is conducive to opening the capital account, realizing the free convertibility of RMB and further improving China's financial system; It can alleviate the current overheated domestic economy and maintain the steady growth of China's economy. This paper holds that the advantages of RMB appreciation outweigh the disadvantages. The structure of this paper is as follows: firstly, it describes that the formation mechanism of pegged RMB exchange rate is increasingly unsuitable for the development requirements of China's economy and reform and its defects; Then, it discusses the positive impact of RMB appreciation on China's economy from five aspects: industrial structure, export trade structure, enterprise transformation management mechanism, easing trade contradictions and the effectiveness of monetary policy. Finally, several corresponding follow-up measures are put forward to expand the positive impact of RMB appreciation and stabilize and optimize the economic environment. Two. Positive Effects of RMB Appreciation and Countermeasures Under the background that the world economy has entered the stage of structural adjustment and China's economy has been developing rapidly, with the rapid development and scale expansion of the economy, especially after China's accession to the World Trade Organization, the contact and interaction between China's economy and the international economy have been obviously strengthened. Both at home and abroad are concerned about the RMB exchange rate policy, and the voice of foreign countries demanding RMB appreciation has never subsided. Recently, the China government has finally made a decision: the RMB exchange rate will appreciate slightly. In the face of different opinions from all walks of life in China, through the analysis of China's economy at all levels, it is concluded that the advantages of RMB appreciation outweigh the disadvantages in the long run, and this benefit and promotion can be further expanded through some corresponding follow-up countermeasures after the appreciation policy. Since 1994, China has been following the "single and managed floating exchange rate system based on market supply and demand", which has been 15 years. Since 15, great changes have taken place in the international economic and trade pattern, and the formation mechanism of pegged RMB exchange rate is increasingly unsuitable for the development requirements of China's economy and reform. Its shortcomings are: First, the fixed nominal exchange rate has lost its real economic significance, and it is difficult for the current RMB exchange rate formation mechanism to form a clear and balanced exchange rate in the market. In practice, the settlement and sale of foreign exchange and the capital management system have created a large part of foreign exchange supply while restraining foreign exchange demand, while the continuous intervention of the central bank and the status of the largest market maker have actually smoothed out all the real differences between supply and demand. The benchmark exchange rate determined by the central bank is not the result of the real balance between supply and demand in the market, nor can it reflect the changes in the market. Secondly, there is a fundamental conflict between the fixed pegged exchange rate system and the independence of monetary policy, which weakens the effect of monetary policy and does not meet the needs of economic development. The independence of monetary policy is very important to the macroeconomic stability of China, and the independence of monetary policy takes precedence over the stability of exchange rate. However, the inflexibility of the RMB exchange rate against the US dollar closely links China's economy with the United States, which greatly restricts the formulation of China's macroeconomic policies, especially monetary policies. Third, the fixed nominal exchange rate encourages capital speculation and increases the fragility of the financial system. Under the framework of free floating exchange rate system, the dynamic equilibrium of the market is maintained spontaneously by international arbitrage funds. Under the fixed exchange rate system maintained by the government, although the exchange rate can remain stable for a long time, its potential speculative firepower space is constantly expanding. Once this system is difficult to maintain due to the change of objective conditions, a large number of attacks by speculative funds and other hot money in the international market will release this profit space in a very destructive way, thus bringing disastrous consequences to a country's monetary system. It is precisely because of these fatal defects of the existing exchange rate system in China that it is imperative to reform and re-select the RMB exchange rate system. The slight appreciation of RMB is an opportunity for the reform and re-selection of China's exchange rate system. People often have different views on the good or bad of a new measure. Although RMB appreciation will have an impact on China's export trade in the short term, in the long run, the advantages of exchange rate system reform represented by RMB appreciation outweigh the disadvantages, which will eventually improve the overall economic level of China. I think the appreciation of RMB is beneficial to the economic development of China, and its influence is positive. Mainly reflected in the following aspects: (1) It can force China to adjust its industrial structure, make the funds from labor-intensive sectors flow to capital-intensive sectors, and strive for high-tech and high value-added industries. The appreciation of RMB will make the capital flowing to the export sector, that is, the labor-intensive sector, flow to the capital-intensive sector, adjust the industrial structure of China in a favorable direction, and finally the capital will turn to invest in the domestic market. When the currency appreciates, capital will look for high-tech and high-value-added industries to invest, so that part of the funds in these industries can carry out technological innovation and reform, increase their competitiveness in the international market, and enter the international market with high-tech and high-value-added products, accompanied by a decline in the exchange rate. It has a great influence on many industries, but it is also beneficial to the overall economic trend of China. (2) Optimizing China's export trade structure and expanding domestic demand will help China to form a stable economic growth trend. China mainly enters the world market with "low price and good quality". The rise of RMB exchange rate has caused some harm to the price competitiveness of a large number of labor-intensive export products in the international market, which eventually led to a decrease in exports. But at the same time, in the long run, from the macro-level analysis of China's economic development, appreciation is indeed conducive to improving our export trade structure, improving our terms of trade, and will also have a positive role in promoting export enterprises. In terms of trade structure, China should be an economic power with domestic demand as the main factor, and the proportion of external demand should not be too large. There is no need to blindly expand the scale of exports. It is imperative to adjust the extensive foreign trade development strategy and promote the transformation of foreign trade export from scale-oriented to benefit-oriented A small appreciation of RMB will help to improve China's current export trade structure, increase consumers' purchasing power of imported goods, promote the coordinated development of external demand and domestic demand, accelerate the start of domestic demand, and form a development trend of combining domestic and foreign trade, thus playing a favorable role in alleviating foreign trade imbalance, expanding domestic demand and stabilizing China's economic growth.