In recent years, many changes have taken place in the international economic situation, especially in terms of currency exchange rates. The outflow of funds from emerging countries and resource-rich countries is accelerating, and the currency exchange rates of countries such as I

In recent years, many changes have taken place in the international economic situation, especially in terms of currency exchange rates. The outflow of funds from emerging countries and resource-rich countries is accelerating, and the currency exchange rates of countries such as India and South Africa have fallen to historical lows . Emerging countries began to protect the loss of their own currencies, but to no apparent effect. Different countries have implemented different measures in response to such changes, and China has also begun a war to defend funds. Faced with this new economic and currency crisis, how should China escape? What impact will it have on China's economy?

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1. Major economic changes, global currency depreciation has a wide range of implications

From a global economic perspective, currency depreciation has brought about a series of impacts. The causes of currency depreciation, price increases of most commodities around the world, and inflation can be summarized in two aspects. One is that the prices of most commodities are no longer proportional to reality, resulting in unfair living conditions for some people. Second, as the total demand of the people has greatly increased, the country's monetary policy and expansionary fiscal policy have led to inflation.

For those economically powerful countries, such as Russia and the United Kingdom, their external exchange rates continue to decline. This can be seen from the ruble exchange rate announced by the Russian Central Bank at 60 rubles per dollar and 66 rubles per euro. As for emerging countries, the currency exchange rates of India, South Africa and other countries have also continued to decline. The price of oil in South Africa has dropped from US$16 to US$13. As for Australia, a resource-rich country, the Australian dollar has also fallen to its lowest value in recent years.

Then we can find a question. With such a huge economic change, where did the money flowing in from various economic markets and resource-rich countries go? Did it all disappear out of thin air? This is obviously impossible. Through the understanding of the media, , we can find that in the context of global currency depreciation, only the exchange rate of the US dollar continues to increase, and even reaches its highest point.

It may be the reason for the economic decline of all parties, or the expectation of interest rate hikes on US savings. Various reasons have led to this situation in the United States. But for the United States, the leader in the global economy, this is not a good thing. Although it is beneficial to the economic and financial development of the United States, in the long run, it will inevitably bring down the United States' financial policy.

The United States is not particularly dependent on the export of goods. It can control the entire international currency through its strong economic foundation and has achieved beneficial results. But for China and other resource-rich countries, such a currency change is obviously a big crisis. Emerging economies must get out of this crisis to avoid becoming victims of currency devaluation and resource loss.

This is an extremely wide-ranging economic defense war. What is different from usual is that the devaluation of the currency has brought a strong sense of crisis to every country. Not most countries have a sufficient economy like the United States. strength to support the development of their own country. Therefore, only by coming up with real solutions can the country get rid of the impact of this economic crisis. Let us take a look at how China solves its own problems.

2. Analysis of the impact of the implementation of different monetary policies on national inflation

Since the exchange reform in 2005, there has been pressure for appreciation of the Chinese renminbi. The officials have tried their best to shift the renminbi exchange rate system from a fixed to a managed change, so that This approach is conducive to changing the fixity of currency. Since domestic inflation, there has been excess capital flow in the market and banks, and the prices of items have also increased significantly. With the financial crisis and economic growth declining, the world has entered a state of deflation.

Although China has made effective adjustments to this situation, it has not effectively solved this problem. What's more, before the financial crisis, my country's international income has not been very satisfactory. China's central bank has long-term fund hedging operations, which will lead to inflation and directly increase the exchange rate of the US dollar. As for the appreciation of the effective exchange rate of the RMB, the domestic economy will decline significantly. However, many scholars believe that the appreciation of the RMB is conducive to curbing domestic inflation.

Fundamentally speaking, emerging market countries like China cannot do anything about the decline in external savings. However, on the premise of adjusting the entire world economic form, only by fundamentally solving the problem can we accelerate economic transformation. More emerging market countries need to protect their currencies, reduce losses, and not compete with big countries like the United States. They just need to be wise and protect themselves.

Even so, China's purpose is very clear and it must be in a dominant position in this economic war, because China's monetary policy is very clear in controlling the direction of the RMB. Moreover, China has strong foreign exchange and observation capabilities, which is also the greatest confidence in protecting the national economy and persisting in this economic war. The most important thing for China at the moment is to get rid of the economic downturn and become the first country among emerging market countries to recover economically.

For other countries, this economic crisis is a double-edged sword, with both advantages and disadvantages. For those countries with sufficient resources, the international prices of oil, gold, iron ore and other large commodities have plummeted, causing their economic income to be unable to make ends meet. For some small countries, they can purchase the materials their country needs at a lower price and enhance their economic strength. The monetary policies of different countries have also led to their economic development in recent years being completely different from China's. This is also the reason why China's economic development has always been ahead of most countries in the world.

3. Currency changes are intensifying. How is China affected?

Through the data of the past ten years from 2000 to 2010, the impact of monetary policy changes on the RMB exchange rate and inflation is analyzed. The RMB exchange rate changes during inflation. , there are some negative impacts on consumers, but the degree of impact is relatively low. Through data analysis, we can know that monetary policy has little impact on changes in national prices. It can be said that using monetary policy to change inflation and control prices does not have much effect, and its effect is very limited.

The intensification of international currency changes has pushed up the prices of national trade goods a lot. These trade imports have greatly affected the price levels of domestic goods, and domestic consumers were even more miserable at the time. In my country at that time, a large number of factory-made parts needed to be imported. The appreciation of the RMB exchange rate did not have a significant impact on the price of imports. Speeding up the optimization and upgrading of the domestic product structure was an effective measure.

China’s measures in this currency change are to conduct more effective economic management by stabilizing domestic prices. Our country has been in a state of inflation most of the time. A lower exchange rate can be conducive to the implementation of independent monetary policy and affect consumer spending. The central bank has issued a series of measures, such as easing credit and reducing purchase prices of goods, all to stabilize domestic prices. However, due to the lack of transmission institutions, the behavior of all parts of the country cannot be unified, so the problem of insufficient national macro-control capabilities must be solved.

Under the socio-economic conditions at that time, only by coordinating monetary policy and fiscal policy could the entire country's economy slowly resume growth. This is a long-term goal. While improving the RMB exchange rate, we must be careful about some adverse effects caused by monetary policy. For example, the impact of inflation and changes in the RMB exchange rate will cause unpredictable losses to China's economy if not careful. Dean of the Chinese Academy of Fiscal Sciences once believed that on the road to building a high-level and open economic system, China needs to promote the development of certain enterprises so that China's supply chain and industrial chain can achieve greater stability. People's consumption situation can stabilize the cycle.

After such a long period of economic development, to this day, China has indeed demonstrated its development prospects as a leader in emerging economies. From an international perspective on China's economic development, the corresponding monetary policy has indeed played a significant role, and China's economic development will become increasingly prosperous in the future.