The appreciation of a country's currency brings about the decline in the competitiveness of its export products, which leads to the depression of its domestic economy. Japan has learned a bloody lesson on this issue. 1985, in order to curb the export frenzy of cheap Japanese goods, the financial leaders of the United States, France, Germany and Britain took corresponding measures to force Japan to sign the Plaza Agreement, thus forcing the yen to appreciate by 30%. Since then, from 1985 ~ 196 to 10, the ratio of Japanese yen to US dollar has risen from 250: 1 to 87: 1, with an appreciation of nearly three times. "Plaza Agreement" is generally acknowledged as the chief culprit of Japan's economic recession.
1) RMB appreciation will affect China's foreign trade and exports. The appreciation of RMB will increase the price of China products, increase the cost of capital investment, and reduce the competitiveness of China's export products, thus causing domestic economic depression.
2) It will also affect the comprehensive competitiveness of China enterprises and many industries. Because despite "China"
"Made in China" has become the main product in the world market, but a fatal weakness of China products is that they have not yet formed their own brands. At present, their market share is mainly due to the low price of China products, and they are not in an advantageous position in the competition. It would be terrible if their competitiveness was hit.
3) It will also undermine the long-term development of China's economy and bring China's finance to the brink of crisis.
The edge is getting closer. The appreciation industry may destroy the good investment environment that China has worked hard to create for many years, and the new overseas investment will be reduced, which will greatly reduce the driving force of China's economic growth, because such investment will become relatively expensive. On the other hand, the speculation of international hot money may increase, which makes China's finance more and more close to the edge of the crisis.
For example, from the Mexican financial crisis to the Asian financial crisis, it is obvious that the governments of these countries have adopted monetary policies with high interest rates to absorb domestic funds, but the effect is counterproductive. Due to the lack of internal funds, it attracted a large number of international hot money inflows, which led to the deviation of capital flow and the contradiction of capital structure, laying a hidden danger of currency crisis; At the same time, the contradiction of foreign capital inflow pushing up the exchange rate of the local currency leads to the exposure of economic structural problems, or the bubble economy or economic downturn, which forces the implementation of the policy of depreciation of the local currency, directly leads to the transaction risk in the money market and the securities market, and finally leads to the financial crisis.
What is the financial crisis? It's like a poor family with a rich relative.
It brought them a temporary "rich" life, so outsiders lent it huge amounts of money because of the family's wealth. Unexpectedly, the rich relatives of this family suddenly disappeared, leaving this family with only high debts, which led to a friend borrowing huge debts. At that time, there were many dangers.
It can be seen that if the RMB appreciates, it will lead to: due to insufficient internal funds, it will attract a lot.
The inflow of international hot money has caused the deviation of capital flow, formed the contradiction of capital structure and buried the hidden danger of currency crisis.
4) Also, the appreciation will inevitably lead to the prevalence of speculation: because of the dollar-denominated countries
People's wealth has increased rapidly, the stock market and real estate have reached a climax, some "bubbles" have further expanded or created new "bubbles", and polarization has continued to expand, leading to the inevitable prevalence of speculation.
5) In addition, RMB appreciation has many disadvantages:
The appreciation of RMB will bring greater pressure to China's deflation; The appreciation of RMB will definitely lower the price, because the price of imported goods will fall.
The appreciation of RMB will increase employment pressure and worsen the current employment situation: foreign-invested enterprises are an important channel to attract domestic labor, especially now, so the appreciation of RMB will not only affect attracting foreign investment, but also aggravate the current employment situation.
The fiscal deficit will increase due to the appreciation of RMB exchange rate, and it will also affect the stability of monetary policy.
The appreciation of RMB will cause serious damage to China's advantageous industries. As a developing country, China has the advantage of labor cost. China's labor-intensive export products are easily restricted by anti-dumping measures, and the export situation is not optimistic. At this time, RMB appreciation will worsen the current situation, so RMB appreciation at this time will not only affect attracting foreign investment, but also aggravate the deterioration of the current employment situation.
The dispute over RMB exchange rate is essentially a dispute over trade issues. The reason why the United States pressured RMB to appreciate is that the depreciation of the US dollar only "greatly enhanced the export competitiveness of China enterprises and stimulated the export of China products". Especially in 2002, the US dollar depreciated, and the US foreign trade deficit reached a historical peak of US$ 435.2 billion, and the trade deficit with China reached US$ 103 1 billion. The United States hopes to prevent China goods from entering the United States on a large scale through RMB appreciation.
There is increasing international pressure for RMB appreciation. Although in the long run, with the development of China's economy, RMB appreciation is an inevitable trend, the nominal exchange rate of RMB should not be greatly adjusted before China's real export advantage (brand) is formed; Even in the face of enormous international pressure, China should control its exchange rate according to the needs of its own economic development, otherwise it will ruin its excellent economic prospects like Japan and Germany.
China's foreign exchange growth year by year is forced, because China's international trade has been in a surplus, that is, more exports and less imports are exchanged for foreign exchange such as US dollars. Although imported products have to be bought in foreign exchange, the long-term surplus has led to a sharp increase in China's foreign exchange reserves.
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China's foreign exchange reserves are mainly US dollars and euros. The website of the State Administration of Foreign Exchange shows that the US dollar is close to 80% and the euro is close to 20%. If converted into US dollar exchange rate, the value of gold reserves really only accounts for a negligible 1%.
Moreover, as a part of international reserves, gold reserves are only one aspect of measuring a country's wealth. A large amount of gold reserves will strengthen its ability to resist the impact of international investment funds, help make up the balance of payments deficit, and help maintain a country's economic stability. However, excessive gold reserves will increase the holding cost of the central bank, because the yield of gold reserves is basically zero in the long run, and the gold standard system of various countries has long since disintegrated, and the importance of gold reserves has been greatly reduced.