I have since 2004, has been advocated to speed up the appreciation of the renminbi. It is 2008, the RMB has dragged on dragged on after its last fierce about faster appreciation of it, the central parity against the U.S. dollar recently However, this situation, I did not feel happy. On the contrary, I believe that the current international and domestic economic and financial situation may have been reversed, it should stop the appreciation of the RMB has been.
the past 4 years, our government has been carrying dead RMB unwilling to appreciate, said there are two main reasons. The first reason is to maintain the competitiveness of export-oriented enterprises. However, depending on the export competitiveness of the yuan undervalued, the real strength of the energy is it? like high-rise buildings built on quicksand , dire. so forget about the competitiveness. really hurt the competitiveness of Chinese enterprises, not the external exchange rate, but China's own domestic policies. on the high business taxes, and levies, the domestic financial system and capital markets do not support SME development, to solve these problems any one of the competitiveness of Chinese enterprises will be leapt to a higher level. the most absurd is that, while adhering to the exchange rate fixed at the same time, it cut export tax rebates in line with international practice to support the export of corporate policies . In so doing, the competitiveness of domestic enterprises with the injury the way insurance rates, I really do not know what strange ideas? Finally, late last year introduced a much more. I am not saying the The Chinese government did a lot of harm to the competitiveness of domestic enterprises do, but in order to maintain export competitiveness against the grounds of RMB appreciation, it was a bad decision.
said second reason is to fight against Since short-term speculation and foreign investment funds. I pointed out in 2004, with the wrong policy to fight hot money, which caused the harm, the harm itself, than the more hot money. but with the way the yuan undervalued against the hot money is not only harmful , and can not achieve the results against the hot money is a policy under the next .4 look back years later, during which a small stable of solid appreciation of the RMB held a policy is in fact the middle of hot money wants. is this the wrong exchange rate policy led to the China Foreign Exchange surge in reserves in a few years over one trillion U.S. dollars, the incremental equivalent to one-third of China's GDP! which a considerable proportion of short-term speculative capital. it plainly, in the past 4 years, it is the wrong exchange rate policy to help the hot money in China Jiancang success, and has been built to a high enough serious threat to national financial security positions!
need to declare that: I am advocating here is not any conspiracy theory, what is the currency of war and the like. hot money purpose is for their own profit, not specifically to destroy the Chinese to finance. good policies can even use hot money to stabilize the financial services, will lead to wrong policy of hot money to become destructive. It's like stock market investors to make money just for themselves, who do not want to undermine the macro economy, but the wrong policy will result in the stock market rises and falls, and ultimately hurt the real economy.
after the hot money has been successfully Jiancang, late today, before our government suddenly changed its mind and let the yuan to accelerate appreciated. Goldman Sachs predicted that 2008 RMB to appreciate by 10-15%. The problem is that the financial market, a late right decision is often a completely wrong decision. I am not a scholar of international financial experts, can not be clearly and logically reasoning to prove themselves. but intuition told me: the current situation, the yuan continues to appreciate the enormous potential hazards, the police may not.
First of all, to promote a major factor in the RMB exchange rate has been China's export surplus from the past result of a stronger renminbi, into the international financial system crisis caused by a weaker dollar. In other words, the RMB appreciation China's foreign trade is no longer driven by self-balancing mechanism is an inherent and healthy process, but instead by the international financial when external shocks, stress response. and then pop a little, said the appreciation of the renminbi is now, is not due to fundamentals, but because of the financial side. revaluation process has been may be reversed at any time. Second, the international oil price at the end of the high and rising food prices are instructions in the recent past years, the so-called period of global excess liquidity, asset bubbles have been from the beginning stages of entering into the resources of even the basic commodities commodity prices compensatory growth phase, as a general rule, which may augur the end of inflation into, that is, from the excess liquidity to illiquid reversal may occur at any time (in fact, some experts think that this has happened) . a lot of people lobbying the yuan continued to rise last reason is that it can offset inflation. But from a global perspective, inflation is probably not the greatest economic threat the next few years, and the resulting liquidity crunch has brought the general recession is.
Finally, to ease hot money flows from the point of view, given the current domestic asset prices have been high, and the hot money has been basically completed in the territory Jiancang the fact that large inflows of foreign capital to continue to seek value-added space inside is no longer large. That is, through the appreciation of the renminbi to prevent hot money inflows do not mean much. At the same time, trillions of possible short-term investments out of China is increasing. If the above two Reverse - USD from weak to strong, or global excess liquidity into deflation - a place for any, if only there signs, which may have led to the current high position in China's hot money held by striking out of China, which amplify a hundredfold liquidity crunch. The RMB if continue to appreciate, no doubt to the hot money continues to let, to encourage their escape.
In short, the 2008 global economy and financial markets are facing many uncertainties, it is possible a number of inflection point. In order to prevent the arrival of the Chinese financial system again when caught by surprise at the inflection point , monetary policy should be forward looking, in the present may be determined to stop the appreciation of the renminbi.
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