Ding Zhijie: The effective exchange rate of RMB is likely to be basically stable

("China Times"2010Year11month5日）

Our reporter Shang Hao reported from Beijing

The Federal Reserve’s recent quantitative easing has increased expectations for RMB appreciation and has touched the most sensitive nerves of China’s foreign w88 enterprises. We have seen that many foreign w88 companies have stopped accepting orders before. It is believed that the number of orders will continue to decline in the future. At the same time, we have also seen that some scholars have publicly stated recently that if the RMB is allowed to appreciate every year3%-5%, China can basically bear it. But judging from the painful reality of today’s Chinese foreign w88 companies, is this judgment valid? Only recent4The RMB has appreciated nearly a month3%, Some companies are worried that profits may soon decline30%To50%. How serious will this trend be in the future? How long can Chinese foreign w88 companies persist?

Reporter from "China Times"11month3日Special interview with a famous expert on exchange rate issues and the dean of the w88 casino of Finance at the w88 casinoDing ZhijieProfessor, ask him to elaborate on his point.

The exchange rate will return within two years6below

China Times: In your opinion, has the current exchange rate of RMB against the US dollar approached the critical point where most foreign w88 companies expect appreciation?

Ding Zhijie: I personally believe that the impact of exchange rate changes should be observed from both short-term and long-term perspectives. First of all, the current adjustment of the RMB exchange rate against the US dollar towards a balanced direction is conducive to the adjustment of China's overall economic structure, which includes the transformation of China's foreign economic and w88 development mode. Second, with6month19日The Central Bank of China announced the restart of exchange rate reform, and the RMB exchange rate generally tends to appreciate. In the short term, this may compress the profit margins of foreign economic and w88 enterprises. In the future, the RMB exchange rate is likely to continue to strengthen, and companies should be prepared to deal with it from two aspects: first, strengthen management of exchange rate risks, and second, make appropriate adjustments to export business. But there are currently no signs that the exchange rate will crush foreign w88. In the long term, the fundamentals of China's economy determine that the RMB is a strong currency, and its exchange rate adjustment process will put certain pressure on enterprises. But we may see that as enterprises’ response capabilities increase and the country’s economic structure changes, China’s foreign w88 should gain international competitiveness on a new platform.

"China Times": Recently, some scholars have publicly stated that the RMB will appreciate every year3%-5%Basically it’s bearable. But judging from the painful reality of today’s Chinese foreign w88 companies, do you agree with this judgment?

Ding Zhijie: First of all, we must dynamically look at the ability of enterprises and the economy to withstand RMB appreciation. from2005New Year's Eve2008Year, the RMB appreciated20%, while China's foreign w88 is still developing continuously and rapidly. Second, in the future, under the premise that the RMB appreciates against the US dollar, if the US dollar depreciates, the RMB will appreciate against the US dollar3%To5%, then the effective exchange rate of the RMB may be basically stable. At least the appreciation rate of the RMB effective exchange rate will be smaller than the appreciation rate against the US dollar. Third, under such a background, the RMB appreciates against the US dollar3%To5%It's entirely possible.
China Times: Is it possible that the extent of the RMB exchange rate adjustment in the future will exceed expectations? How much do you estimate the cumulative appreciation rate for the whole year will be?

Ding Zhijie: Under the current circumstances, expectations for the appreciation of the RMB may be smaller than the actual appreciation rate. The reason is that there are deviations in everyone's prediction of the future trend of the US dollar. Assuming there are no major problems with the Chinese economy, I think the RMB exchange rate against the US dollar will return to normal in the next two years6The following may be a normal state.

Exchange reform pressure promotes economic adjustment

China Times: Can we really make the exchange rate adjustment process gradual and controllable?

Ding Zhijie: In the past, we have used this gradual and controllable approach to adjust exchange rate levels and reform the exchange rate mechanism. However, judging from the current chaos in the global currency exchange rate field, I personally prefer to first adjust the RMB exchange rate to an equilibrium level. Through market changes, in the future, the exchange rate will more reflect the fundamentals of the economy. At this time, a floating and flexible exchange rate can truly be achieved, and its impact on the economy will be smaller. The key issue at the moment is that everyone may think that the RMB exchange rate deviates from the equilibrium level and needs to be corrected for a certain degree of underestimation. This may indeed bring a certain degree of pressure to the operations and profits of foreign w88 companies. But if it is adjusted to the equilibrium level, even if there is a periodic appreciation in the future, the impact will be much smaller.

"China Times": China's current policies and policies to promote domestic demand based on market reasonsCPIWhat is the relationship between growth rate and w88 surplus? Is the RMB exchange rate just a tool for structural adjustment?

Ding Zhijie: In the process of adjustment, the current rise in China's inflation rate is mainly imported inflation. In other words, the US dollar is giving up its role as an anchor for global currency and exchange rate stability. In this process, the appreciation of the RMB may help curb inflation, but it cannot completely solve inflation, or even completely offset the current imported inflation. In the coming period, an important function of RMB exchange rate reform is to play a leading role in the transformation of China's economic structure. In other words, the pressure of exchange rate reform may lead to adjustments in the economic structure.

This year’s surplus may be accounted forGDP 5%below

China Times: Is it possible that China’s w88 surplus will decrease significantly in the next few years? What will be the maximum decrease? What serious consequences will there be? Can it be successfully dealt with?

Ding Zhijie: As the proportion of China’s economic scale in the world economy increases, as the world’s second largest economy, it remains relatively largeGDPWith a relatively large foreign w88 surplus, I think we may encounter various obstacles. Speculating on future development, we can at least see a trend, that is, China's foreign w88 surplus accounts forGDPThe proportion will decrease. And during the 12th Five-Year Plan period, balance may be restored.

"China Times": If we imagine that when China's various industries gradually enter the upper reaches of the value chain and enter these areas that have always been regarded as privileges owned by the United States, Germany, Japan and other countries, is it then that China's foreign w88 can truly respond to various challenges calmly?

Ding Zhijie: I think it’s hard to say. Some problems in China's economic structure are due to the rigidity of the exchange rate. Well, I think the exchange rate adjustment, as I just said, will play a leading role in economic structural adjustment.

"China Times": Do you think China's foreign w88 surplus has dropped toGDPof3%, even2%Can the international pressure on the RMB exchange rate issue be resolved by the following times?

Ding Zhijie: The core issue of the RMB exchange rate now is how to achieve floating and elasticity as soon as possible. So when the RMB exchange rate level is unbalanced, the floating and elasticity of the RMB exchange rate is impossible. So, what is China’s foreign w88 surplus?GDPHow much is appropriate? The exchange rate is not the most important factor, but depends on the division of labor and status of the Chinese economy in the world economy, as well as China's economic structure.

China Times: How low do you think China’s foreign w88 surplus will drop this year?

Ding Zhijie: Looking at it now, China’s foreign w88 surplus should account forGDPof5%The following.

The most important thing is to prevent hot money

China Times: The world is currently experiencing excess liquidity, but is there any possibility of a sudden reversal of the situation, such as a large-scale outflow of hot money? How does China prevent such dangers from happening?

Ding Zhijie: I think there is no sign of this yet. Now, as the United States implements the second phase of quantitative easing monetary policy, it may cause global liquidity to flood, and more of this liquidity will flow to emerging market economies that are the first to recover and have relatively good economic growth, including China and other countries. Therefore, the most important thing is to prevent the inflow of hot money.

China Times: How will the United States’ implementation of the second quantitative easing monetary policy affect China’s continued increase in its holdings of U.S. Treasury bonds? How does it affect the appreciation of the RMB against the US dollar?

Ding Zhijie: In fact, we can see that a large amount of capital inflows into emerging market economies will cause the actual appreciation of the currency exchange rates of these countries, either through an increase in nominal exchange rates or inflation. From this point of view, the depreciation of the U.S. dollar caused by quantitative easing and the increase in the ratio of other countries' currency exchange rates to the U.S. dollar have also increased the appreciation pressure of the RMB against the U.S. dollar.

China Times: Isn’t the core of the exchange rate issue not the exchange rate but the initiative? Will China be able to seize this initiative?

Ding Zhijie: It should be said that first, we should be more proactive in reforming the RMB exchange rate. Second, when it comes to exchange rate issues, we must not only consider domestic issues, but also international considerations, because China is a big country.

Related links:

China Times:http://www.chinatimes.cc/pinglun/sheping/2010-11-05/18746.shtml

Financial world:http://stock.jrj.com.cn/2010/11/0523028500872.shtml

Foreign exchange: http://forex.cnfol.com/101108/134,1385,8752752,00.shtml

Hexun.com:http://forex.hexun.com/2010-11-06/125465075.html