Faced with the impact of the strong appreciation of the US dollar, what is the confidence of RMB exchange rate ? Why is it said that China’s manufacturing is our biggest trump card?
Made in China is the biggest trump card of the RMB?
In recent months, the dollar index has continued to strengthen, and the strong appreciation of dollar has brought huge depreciation pressure to global non-US currencies!
Putting aside the yen that has fallen so badly, not to mention the pound, talks about our RMB, the 7 yuan mark is broken, and the current exchange rate ratio is as low as 7.15 yuan: 1 US dollar.
The reason for the continuous depreciation of the RMB is also clear. The Federal Reserve's interest rate hike has caused global currencies to flow back to the United States, promoting the strengthening of the US dollar. The continuous strengthening of the US dollar means depreciation of other currencies . So it’s not that the RMB is not good, but that the US dollar is too strong. This is the main reason for the exchange rate problem.
Federal interest rate hikes, the US dollar index strengthens, causing the RMB to continue to depreciate
So many people ask, does the RMB have to continue to depreciate? Is there any way for China to keep the exchange rate and avoid a significant depreciation? Of course there is a way, , and the facts have also proved that among all mainstream currencies, China has the smallest depreciation range and is one of the few strong currencies.
The trump card of the RMB exchange rate
Although The People's Bank of China repeatedly mentioned that the RMB is a strong currency, we still believe that our RMB is "not strong enough". Some economic experts even believe that the trend of the RMB exchange rate deviates from fundamentals and the RMB has depreciated too much. The statement
is not without reason. According to the economic theory " Barrassa-Samuelson" effect, the higher the economic growth rate of , the faster the real exchange rate rises. Many countries take this theory.
However, China has created an economic growth rate that is a world miracle, and the RMB exchange rate against the US dollar has always remained between 6-8, so many people think that our exchange rate is diverging from fundamentals.
China-US scale GDP comparison chart
In addition to the economic theory just mentioned, there is another important value that affects the exchange rates of the currencies between the two countries, that is, the "trade surplus". After the establishment of diplomatic relations between China and the United States, China has been importing and purchasing a large amount of goods and technologies from the United States, so at the beginning, there was a trade "deficit" between China and the United States, and the RMB exchange rate was very unstable at that time.
In 1987, a plane made by Sino-US cooperation.
However, since 1994, China's trade surplus with the United States began to expand, and there has been no deficit between China and the United States since then, only China's growing trade surplus with the United States.
According to data, from January to August this year, the total trade volume between and China and the United States reached 2.93 trillion yuan, an increase of 11.8% compared with the same period last year. The trade surplus with the United States has once again widened by 21.7%, to about 1.57 trillion . The trade difference of in the first eight months is 560.5 billion US dollars, a year-on-year increase of 57%. This number is a brilliant achievement that other countries dare not imagine.
From an economic theory point of view, China has a huge trade surplus, so foreign exchange will flow in in an increasing manner, resulting in an increase in the RMB exchange rate. and a continuous high trade surplus can theoretically maintain the long-term stability of the RMB exchange rate.
Sino-US trade surplus chart. In recent years, our surplus has increased by leaps and bounds. This is the important reason why the central bank has made many statements, believing that the RMB has no basis for depreciation.
It can be said that RMB assets are safe. Due to their confidence in the RMB, the central bank has been carrying out market-oriented reforms to the RMB in recent years to make the exchange rate closer to the market. As long as the RMB does not experience major ups and downs, the central government is generally unwilling to intervene. After all, the market exchange rate needs to be dynamically balanced, and short-term rise and fall are nothing.
Central Bank: The RMB has no basis for depreciation
0 Central Bank wrote an article yesterday to reiterate that the RMB has no basis for depreciation, but in fact it is about the above content.
But think about it, where did China's huge trade surplus come from? ? What are you relying on? That is exports, China's manufacturing industry, and this is the confidence of the RMB exchange rate.
The confidence of the RMB is the manufacturing industry
China's huge trade surplus, mainly created by China's developed manufacturing industry. In 2012, China's manufacturing industry accounted for 22.5% of the world's total, with an added value of 16.98 trillion yuan; and by last year, this proportion had reached 30%, increasing to 31.4 trillion yuan, ranking first in the world.
You should know that although China is vast and has a wealth of resources, its per capita resources are not rich, so we cannot make a living by "selling resources" like Saudi and Russia. Importing resources and exporting goods are our only way of development.
So in the past 20 years, China has been conquering the world step by step, and we export some primary processed products such as shirts and jeans. To export mobile phones, home appliances, high-speed rail, satellite and other advanced equipment technology . It is these products that have brought a steady stream of foreign exchange to China and have made China's relations with countries around the world closer.
China's high-speed rail exports for the first time
China's good industrial system in the entire industrial chain has attracted countless funds to flow into the country. Many people were worried that the United States would raise interest rates in and foreign capital would flow out of China. However, in fact, from January to August this year, our actual amount of foreign investment reached 890 billion yuan, setting a record high.
This shows that no one will be unable to get along with money. Foreign investors are still optimistic about China, and our development momentum and development advantages still exist.
So why does the RMB exchange rate still depreciate significantly under various favorable factors?
First of all, the US dollar is too strong. Feder As the central bank of the global central bank, it has the hegemony of the US dollar. Major economic organizations are up to the United States, so we can only defend passively.
The Federal Reserve is the global central bank, and the world economy has the final say.
Secondly, the international hot money is erratic, and the deterioration of Sino-US relations and other reasons speculation short RMB, causing the depreciation of the RMB to accelerate. In addition, we also have some internal insiders who are not united and follow the trend of "foreign speculation", and the depreciation of the RMB by exceeded market expectations.
But it should be noted that China, as the world's second largest economy, is the largest economy in the future. Our economic growth rate is constantly rising, and the seemingly powerful United States is declining. The 31 trillion US debt crisis is like a time bomb that may explode at any time.
The total debt of the United States is as high as US$31 trillion, and it has faced a crisis of storm many times!
So, although the exchange rate problem is very complicated, as long as you stick to the basic market, insist on developing manufacturing, accelerate the transformation and upgrading of manufacturing, and ensure the trade surplus, , then the RMB will not have a basis for depreciation . Even if international hot money joins shorting, it is impossible to reduce the positive RMB exchange rate, which is impossible.
summary
From the current perspective, no matter what policy the United States adopts, it focuses on its own interests. For its competitor China, it will not give up the use of economic and sanctions to suppress it. The recent chip sanctions and other means are ironclad evidence.
So when we face the major incident of the Federal Reserve's interest rate hike, we need to be vigilant and early warning. Under the changing international situation, the bankruptcy and disintegration of many countries are due to the collapse of import and export trade and the collapse of exchange rates, resulting in the bloodbath of the wealth of the people of the country. This is the case with the Southeast Asian economic crisis in 1997.
Türkiye's exchange rate collapses and prices soar!
So we must stabilize the RMB exchange rate and maintain its reasonable floating. The central bank also expressed its statement and even entered the market in person to issue policies to suppress the cost of shorting the RMB by foreign forces. The central bank warned: should not bet on unilateral appreciation or depreciation of the RMB exchange rate. If you bet for a long time, you will lose. This is a deterrent to speculators who short the RMB.
The Fed's interest rate hike is coming to an end, and the US Treasury bond interest rate is close to the top. Even if there are any negative news that exceeds expectations in , it will not be added anywhere. This means that the RMB depreciation cycle will end soon.
China is confident of crushing the financial hegemony of the United States!
At the critical moment when the Federal Reserve has its last few interest rate hikes, We need to have confidence in the RMB and confidence in China. As long as China's economy and manufacturing basic market continue to maintain their advantages, any short-selling method against the RMB will be eventually crushed!
I also believe that the status of the RMB in the international field will become more and more important! China's international influence will become stronger and stronger! Come on, the Chinese people! Come on, China!
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ The picture source is from the Internet, please delete if infringes.
