RMB exchange rate reform is a de-dollarization process

2010-06-26 00:13:05 Source:China Times

After the central bank announced exchange rate reforms, the flexibility of the RMB exchange rate has increased significantly in recent days, and its future trends have attracted worldwide attention. A reporter from "China Times" recently visited a well-known scholar in the field of exchange reform and the dean of the w88 casino of Finance at the w88 casinow88 casino games loginProfessor, please provide an in-depth analysis and explanation on relevant issues.

Obvious spillover effect

China must remain cautious

"China Times": What do you think of the changing trends of the RMB and other Asian currencies after the central bank announced the exchange reform, as well as the fluctuation trends of the US dollar and gold prices in recent days?

w88 casino games login: Generally speaking, since China launched exchange reform, the trend of RMB exchange rate fluctuations has been intensified. Judging from the recent general weakening trend of major international currencies such as the US dollar, it also reflects the market's expectation of whether the US dollar will continue to weaken in the future. The recent general strength of Asian currencies reflects that in the context of globalization, China, as a big country, will have some spillover effects on its economic policies, which will have an impact on other countries. Therefore, China does need to remain cautious in its current role.

China Times: In your opinion, what is the special significance of the timing of announcing the exchange reform?

w88 casino games login: In my personal opinion, both aspects are reasonable. First, in terms of economic fundamentals, the positive momentum of China's economy has been further consolidated. The global economy is also recovering and, despite the uncertainties, is in much better shape than it has been in the past two years. Second, when the RMB exchange rate reform was launched, expectations for RMB appreciation in both domestic and international markets had been greatly weakened. Judging from the market reaction I have seen, the appreciation of the RMB within one year is expected to be around1%Within. At the same time, in the domestic foreign exchange market, the US dollar strengthened. This will have a big impact on the stability of exchange reform.

"China Times": Asia-Pacific Stock Market6month21Is there a general rise in daily prices or is it closely related to this?

w88 casino games login: I think so. At least it sends a signal to the market that China has confidence in its own economy and the world economy.

The exchange rate moves or does not move

Based on the domestic economy

"China Times": Do you agree with the statement that the central bank's announcement of exchange reform has the so-called effect of killing three birds with one stone?

w88 casino games login: If the role of killing three birds with one stone is to reduce pressure and remove obstacles strategically, maintain a reasonable and balanced level of the RMB in battle, and be a necessary measure for overall macro-control of the domestic economy, I think the order of the three should be adjusted. The first point should be the needs of the Chinese economy, including the inhibitory effect of RMB appreciation on inflation. The second point is to release appreciation expectations and reduce the pressure that future speculation may bring to the stability of the RMB. Finally, we may also take the international situation into consideration, but this is just a matter of consideration and does not mean succumbing to international pressure. We follow this policy: China will not change its exchange rate because of international pressure, nor will it change its exchange rate because there is no international pressure. The exchange rate should be adjusted according to the needs of China's economy.

China Times: Maybe in a sense, how to use exchange rate policy is a very special art, right?

w88 casino games login: I think this exchange reform should be said that the Chinese government and relevant management departments did a lot of research in the early stage and found a very suitable time to launch it based on very sufficient arguments.

China Times: Will the principles of RMB exchange rate reform change at all under external pressure?

w88 casino games login: The reason why China adheres to the three principles of independent, controllable and gradual RMB exchange reform is because changes in the stable RMB exchange rate not only affect China, but also the world. But first of all, it is a Chinese issue, and only when China's needs and China's national interests are basically guaranteed can we consider taking into account the international situation.

China Times: How do you view the connection between international pressure and China’s response?

w88 casino games login: It should be said that the international community has never stopped criticizing the RMB exchange rate. First of all, we should understand this accusation, because the RMB exchange rate issue not only affects ourselves, but also affects others. Second, I think a lot of criticism, especially from the United States, is untenable. This point must be clarified to set the record straight. But at the same time, I think judging from the past period of time, it is true that international pressure has not prompted China to carry out exchange reform, but has made China's exchange reform more complicated. RMB exchange rate reform must be promoted and implemented on the premise of adhering to China's interests.

"China Times": What are the conditions for further appreciation of the RMB?

w88 casino games login: It mainly depends on economic fundamentals. From the fundamentals of China's economy, the RMB is strengthening, which is a trend.

Chinese products will be on the new platform

Acquire international competitiveness

China Times: What will be the prospect of RMB exchange rate reform?

w88 casino games login: The prospect must be to become a strong currency. I think this is beyond doubt. However, in the coming period, including judging from the current foreign exchange market trends, the RMB exchange rate is in the process of finding equilibrium. I personally believe that even if there is an imbalance, it will not be large, and the equilibrium direction can be adjusted through market-based methods.

China Times: Which of these three trends do you think is most likely to occur, one-time appreciation, slow appreciation, or two-way fluctuations?

w88 casino games login: I think that overall in the process of two-way fluctuations, the RMB will definitely become a strong currency in the future, and there will definitely be a certain degree of appreciation.

"China Times": How much appreciation of the RMB can the country and the world bear?

w88 casino games login: This may depend on changes in the international market exchange rate. How the U.S. dollar moves is volatile in the international market, so it is difficult to say how the RMB exchange rate will change against the U.S. dollar. A study we conducted concluded that the impact of changes in the U.S. dollar exchange rate on the United States is much smaller than the impact of changes in the RMB exchange rate on China. The conclusion is that it is impossible for the RMB to follow the U.S. dollar in its ups and downs. Therefore, China has repeatedly emphasized the need to maintain basic stability of the exchange rate at a reasonable and balanced level.

"China Times": Is the era of Chinese manufacturing relying on exchange rates to expand sales really over?

Ding Zhijie: First of all, it should be said that the RMB exchange rate is not the main reason for China's foreign w88 surplus. Second, the main reason for China's foreign w88 surplus comes from structural problems within the Chinese economy, including China's high savings rate and low labor costs. And these factors will not change much in the future. But I think China can still maintain the international competitiveness of Chinese products by improving productivity levels.

"China Times": From another perspective, will the RMB exchange rate reform have a negative impact?

w88 casino games login: The most basic point is that exchange rate fluctuations will increase and exchange rate risks will increase. These factors require enterprises to pay special attention. At the same time, we will also strengthen the management of exchange rate risks. Exchange rate adjustments will bring about relative adjustments in commodity prices, which will promote adjustments to the product structure of some companies. Some industries, especially labor-intensive industries, may be under certain pressure. Therefore, relevant companies should make preparations in the industry, such as transformation and production change, and resolve difficulties by improving efficiency.

One of my judgments is that even if the appreciation of the RMB will have an impact on the production of some industries in the short term, looking at the next two or three years, China's export commodities will gain international competitiveness on a new platform.

China Times: Will the exchange rate reform have any impact on domestic inflation trends and property market control policies?

w88 casino games login: First of all, it should be clear that although the exchange rate is not a tool to solve the inflation problem, the appreciation of the RMB can help curb inflation. Second, what is the impact on the property market? We have seen that in the past period, due to the expectation of RMB appreciation, a lot of funds entered the property market for speculation. However, after the RMB exchange rate reform, there will actually not be much room for appreciation, which will not be very attractive to new hot money entering the property market. Based on comprehensive judgment, housing prices in the property market may experience downward pressure. The government's policies to regulate the property market will not end either.

Exchange reform direction

A process of de-dollarization

"China Times": What impact will Americans' speculation on the RMB exchange rate have?

w88 casino games login: I personally think that the Americans’ constant play of the exchange rate card is more about asking China for prices, especially in terms of market opening. I once said that we can discuss the exchange rate issue with anyone, but we must not discuss it together with other issues. Hyping up the RMB exchange rate issue will only make the problem more complicated.

"China Times": In the long run, what will be the direction of RMB exchange rate reform?

w88 casino games login: The exchange rate should be floated with reference to a basket of currencies. In the future, the role and proportion of the US dollar in a basket of currencies should be continuously reduced. This is a process of de-dollarization.

The trend of the RMB exchange rate and exchange rate reform to further expand flexibility depend on the development and changes of the market.

"China Times": What do you predict will be opened next weekG20Can the conference reach some consensus to help the world economy get out of the trough?

w88 casino games login: I think there may not be much progress. There will be little if any substantive consensus for cooperation. It can only help everyone clarify the problems that the current international economy may face and how to deal with them.