exchange rate issue is repeated the baseless assertion
- elaborated on the exchange rate system of knowledge and understanding of Correction
accused the Chinese government since the U.S. currency manipulation, and threatened trade sanctions against China since the war of words between the two countries fighting on the exchange rate still intoxicated. The exchange rate issue is not only newspaper radio and television network into a hot spot, has become the topic of ordinary streets. Impassioned experts and scholars on stage one by one, the one people have long been deeply moved by the blood boiling indignation.
However, despite the indignation of the people are extremely old United States, in fact, their knowledge about the exchange rate or a word is still rare, and some absolutely does not understand, they just used instead of every United States will has been. Of course, do not understand is not the fault of the people, as experts and scholars say the truth most of Ma Tau mouth full of flaws, in itself illogical theory that it, of course Jiaoren Ruzhui clouds fog. The reason why most people oppose the appreciation of the RMB just parroting their views generally have the following three:
first appreciation of the renminbi, China's exports very expensive things, export enterprises will close down, people will be unemployed depression; Second, we feel the immediate devaluation of the RMB has been in constant, Americans are calling us to appreciate what it is not a conspiracy; third is the heart of U.S. imperialism death I die, let us do all Americans, certainly not what kind security!
to revalue the yuan really is an American plot to it? I advise our compatriots, to ascertain the truth before, do not resort to force Hengmeilengdui. I Fucai, willing to try the most simple language to describe the systematic exchange of knowledge, again, convinced that even our readers without any knowledge of economics, but also make your new understanding of the exchange rate, so you Sudden Impact on the above questions, at least not then easily superstition Gesanchaiwu in the media spotlight that the so-called economists.
one, why the need of foreign trade?
have repeatedly filed a story, although the content of the story already too old tooth nothing new, but for people without the knowledge of economics, learning theory it is essential to understand the exchange rate .
is still in the barter of human savagery, person A created Liangbing sharp ax, person B shot dead two of the wild sheep fat, of which only a edged their own tree felling will be enough, and the other handle is idle; B half past one will also eat two sheep, the other a long time will put spoiled. Thus, the two have something spontaneous exchange of excess, although the ax or hatchet, wild goats are still wild sheep,
( turn ) like you or love you, look at to understand, not their quantity and quality of any change, but the two sides of the situation but because the exchange has improved, because Both sides use their own material in exchange for the extra wealth for yourself useful.
This story tells us, equal to a voluntary exchange of resources be allocated more rationally and effectively, can increase the exchange of wealth between the parties. From the story to promote the open, in order to make a country richer people in one place, it must be reasonable policies adopted to promote more extensive exchanges, exchange more people the faster pace of wealth. Of course, humans have already entered the era of using the currency of civilization, but the nature of barter exchange has not occurred any change, currency just as the medium of exchange only.
foreign trade and exchange between people, not the domestic nature of the differences, the two sides also exchanged wealth can promote growth, which is why foreign dignitaries regarded as the slogan of defending the freedom of trade hanging in the mouth on the reasons. However, foreign trade and domestic are also different, because their products are used in the pricing unit of account is not the same, the Americans used the U.S. dollar, the Chinese use the RMB yuan with a number of Chinese products to exchange for one dollar U.S. products, this is a problem, so the exchange rate issue emerged.
Second, the exchange rate is determined by what?
said before, the exchange is the essence of barter, if a product has what resources the country, and lack of resources and products of State B, when a country's money is even more valuable, because State A State B products urgently needed resources, it is willing to use more products to a country in exchange for money to buy a country's resources, or a country and you will not be exchanged.
However, this situation is not static, if State B was originally an urgent need for a country's oil resources in their own territory later found a large oil field storage of rich, then State B A country's oil resources on demand will drop, this time with respect to State B, State A bill bill will naturally rise. State B short of oil because of the distress has been alleviated, the original fuel for 1 ton of a country willing to come up with 10 tons of food, now only willing to come up with 5 tons of food.
the two countries, the RMB against the U.S. dollar is the United States from China (or the world market, as the U.S. is the world's currency) a variety of resources products, and the U.S. (or world market) the product of supply and demand of various resources in China decision, as the price within a country is determined by supply and demand as the two sides. The renminbi exchange rate in the world market price.
reform and opening up of China, the lack of manufacturing technology in China that time, car, computer, aircraft and all kinds of machinery and equipment are not made, and China needed to support the modernization of these things, so the yuan International trade is very not worth much, because on the one hand we urgently need U.S. dollars in the United States and the world market to buy advanced equipment and technology, on the other hand got a lot of RMB foreign but nothing in the Chinese market what they need to procurement. Haiti's currency is now as simple as not worth the money, because you are now even with the currency of Haiti, but because it has suffered a serious earthquake, you do not buy what you need.
However, with the deepening of China's reform and opening up, China addition to large aircraft, the only they can make computers, cars and all types of machinery and equipment, and can use the equipment and the Chinese labor advantage to produce more shoes, socks, ties, and many other light industrial products lighter, so that on the one hand we do not need more dollars to buy U.S. industrial products, and thus the demand for the dollar down; the other hand, Americans get RMB After they can buy cheap Chinese light industrial products, and therefore increase their demand for the renminbi, and the down a liter, which means less demand for the dollar increased demand for RMB yuan worth more a matter of course the. In other words, as China's economic development, the appreciation of the RMB against the U.S. dollar is inevitable.
Third, there is no objective standard exchange rate movements?
question now is how much the RMB is appropriate that the rise? Some experts said the exchange rate issue is the issue of sovereignty or the State did not rise up to us to decide; Some experts say that the RMB has been in five years rose by 21%, not up again a; some scholars say it, the RMB is not only should not be appreciated, it should be devalued, because devaluation means that our products are cheap, more conducive to seize the world market.
the face of divergent views, the people of course, is confused. However, equality before the text of the voluntary exchange of Syria to promote the growth of wealth, both the basic principle, we can still to this seemingly inscrutable questions to find clarity in the answers.
The purpose of the exchange
any party that is not from the subjective to others but to themselves, although the objective is also helpful to others. Foreign trade, if we just sold out the things that were not enough, we also have to sell things in exchange for U.S. dollars to the United States market, buy what we need, so that the exchange is completed. If you only sell not buy, that means we'd give something to others, but others did not give us anything, this exchange may be increased to promote the wealth of Americans, but did not make our own wealth, the corresponding increased.
modern society has entered an era of specialization, to really complete a thorough exchange between the two countries, it is necessary to rely on import export companies have to rely on the company. If the export company just to sell products abroad, and importing companies are reluctant to use the export company in exchange for dollars to complete the import, it means that the exchange was not completed. There is a standard to measure the exchange rate is correct, that is, in return for U.S. exporters to sell unimpeded import company, import companies and are willing to buy all those dollars for imports, then it means that a thorough completion of the exchange, but also means that our wealth has been increased, so that the exchange rate is correct.
an example may help everyone understand the above passage. Assume that a passenger car factory in China export a number of high-end passenger cars to the United States, Americans are willing to buy a $ 1,000,000, more than the price Americans would prefer to create their own or to other countries to buy. At this point, the deal is done either bus plant depends both on the manufacturing costs, but also on the exchange rate. If the production cost of the established bus is 600 million yuan, can not sell the key to look at this $ 1,000,000 RMB back the number of domestic can be replaced. China is a foreign exchange control of the country, 100 million passenger car plant to get after it, only to state-owned commercial banks, the ratio prescribed by the State to exchange yuan. If according to 1 U.S. dollar 6.8 yuan RMB, the passenger can make these 80 million yuan, it alone can do the business, of course; if the state will change it to $ 1 exchange only 5 yuan, then the business can not do this alone , must be done to mean loss of 100 million yuan. Through this case we can see that the lower the exchange rate (that is $ 1 more to exchange RMB), for example, one U.S. dollar can be exchanged for 100 yuan, the export business to booming business will no doubt immense.
problem, however, this is not the end, the RMB is certainly not conducive to our valuable export dollars can be saved is not our purpose, our aim is to use those dollars from the United States or the world market buy our domestic need, this time featuring large companies rely on imports either. U.S. imports need to, then what kind of import enterprises in the price of the bank to buy dollars? Of course, is to export enterprises by banks to buy dollars from the price of execution, and to add charges, or bank it not lose money? However, this time importing firms simply do not enthusiasm, because, according to 6.8 yuan to one U.S. dollar price of exchange to buy U.S. dollars and imports, such as large enterprises that apart from a few sophisticated products like aircraft, the other almost back no matter what to buy to the domestic are uneconomical, or the yuan is not enough of their own these products can not afford to buy, or bought back the domestic prices of these products are expensive no one will buy. Readers must have been abroad have had a similar experience, when we changed a lot of dollars to the foreign, we find that almost no matter what to buy, if converted into yuan than domestic expensive dollar had again brought back again into yuan. In other words, the current exchange rate system, we can not afford most of the Chinese dollar.
a phenomenon can be used as secondary evidence. When China's reserves would be a lot to spend on it? Certain leaders are generally led the United States or Europe to go, the results come back often to enter into a generous order. Most people may be wondering, how Chinese entrepreneurs have become a child, which should not import, is it still better tomorrow's leaders check it? The secret lies in China's business with the current exchange rate to buy foreign products most uneconomical, and only state-owned enterprises in the political task of the current situation, it willingly or reluctantly to act as taken for a ride!
finished the above example the reader should understand this reasoning, assuming the exchange rate right, on the bank's vault Zhang Hao of dollars would not have too many piles as they are from the export business at the The dollar bought companies to import has already been bought, the fact is that our country has accumulated a very huge huge 2.4 trillion U.S. dollars, the exchange rate you can say this is correct?
Fourth, exporters who are making money?
So, how much the RMB should be present in the end exchange $ 1 to be considered reasonable? In fact, in addition to the market, any experts can not answer this question. Because the market is always changing, a national demand for the product on foreign resources and foreign demand for products of the country's resources are dynamic, and what price to co-ordinate a package of items together, what with a fixed U.S. dollar parity peg policy and the exchange rate fixed at a value once and for all, the real exchange rate may be from the mile.
is because the market is in perpetual flux, almost all market economy countries intervene in the exchange rate is not mandatory, nor save a lot of foreign exchange, but to the needs of the people according to their own preservation and freedom of exchange, so the real exchange rate to reflect market demand, exports and imports in order to reach a balance, at this time is the right of the real exchange rate in order to truly promote the exchange of both wealth growth. It is because of this reason, the exchange rate is free floating to be internationally accepted measure of whether a country is an important criterion for market economy countries.
, of course, free floating exchange rate risks will export enterprises, such as three months ago is 1 U.S. dollar 6.8 yuan, so the company received $ 10,000,000 for a single business, but three months after completion of manufacture, the exchange rate can only be converted into a $ 1 5 yuan, 68 million yuan means that revenues will drop 50 million yuan,
Farthest away from the Chinese city of QQ users, then the awful order is entirely possible changes to the original capital from the non-profit return. Therefore, export companies, they want to at least RMB exchange rate is stable, it is best to devalue, in any case do not rise.
bus back to the previous example, a number of high-end passenger car exports to the United States, our cost of production is 600 million Americans are only willing to buy a $ 1,000,000, according to current exchange rate Bus Factory can earn back 80 million yuan. But if the state liberalize the exchange rate controls, according to market demand in China and the U.S. dollar is not so valuable, the RMB is bound to appreciate, is assumed to 1 U.S. dollar appreciated 5 yuan, the Bus Factory in the real market price, each production batch of passenger cars, the actual the loss of 100 million, which is single business should not be done; but if the government forced to devalue the RMB, for example to 1 U.S. dollar depreciated 10 yuan, the passenger can make each batch of 400 million, which came on the Bus Factory stated that it is money out of the sky.
need to draw the reader
party of note that, no matter how much the RMB U.S. dollar, even if is 1 U.S. dollar 10 yuan, the bus made a fortune plant that Americans pay these buses only $ 1,000,000, our country can only be relying on these 100 million from U.S. $ 1,000,000 on the back of commodities. Since Americans do not pay more, but the Bus Factory has earned pours, this money come from?
this money in fact, has nothing to do with the Americans, this is the $ 1,000,000 passenger car plant to the commercial banks at a fixed exchange rate to the standard. The same as the Bus Factory in China's export enterprises far more than a million, because they are under the standard rate in the current money to be made, will be hard to increase the production and export of foreign exchange for dollars, then those dollars from domestic commercial banks in exchange of the renminbi, of course,
Friends come in a driver's license and thought , to see how to their reversing t, never tired of corporate money to be made.
problem is that commercial banks, the money is to come from U.S. dollar, the company stands to reason that should be imported to the dollar from the purchase, import and export to a country balances. May previously mentioned, in accordance with the current exchange rate criteria, import companies simply do not import the enthusiasm, the dollar not only enter into less or more out, no amount of money commercial banks, export enterprises can not afford the payment, they had to the central bank sold dollars, the central bank because the payment standard is developed. The central bank has no money, because the central bank is not a profit unit, but this does not prevent the central bank to pay the money, because the central bank although not profitable, but it is the right to print money, with the continuous inflow of U.S. exporters, the central bank to start printing money machine dollar amount of 6.8 times in accordance with the RMB to the export enterprises to pay the printing, then the RMB and then through the export of the production aspects of all procurement into the domestic market.
you think about it, China's foreign exchange reserves now exceed 2.4 trillion U.S. dollars, so the number of central banks print more yuan this market it? Your mental arithmetic will be able to come has already put more than 16 trillion yuan. In fact, it more than this number, because the previous long period of time, price of foreign exchange is 1 U.S. dollar 8.7 yuan. You now understand why we always feel at home continue to devalue the RMB it?
five yuan does not appreciate what will happen?
yuan does not appreciate, it means that export enterprises to produce prosperity, profit enterprises, workers are not laid off, which of course is a good thing an export enterprise, which is the appreciation of the RMB against the export business certainty reasons. However, government decision-making can not just consider the interests of export enterprises, and more is to consider the interests of society as a whole. We will look at the RMB does not appreciate what our community has brought disastrous consequences?
First, China's wealth will be flowing continuously into the United States, and the same wealth in return for fewer dollars, because the low exchange rate means that we need to exchange more U.S. dollars equivalent many things that white stuff we are sending to others; Second, more and more trade friction, because the government does not allow appreciation of the renminbi, to rely on print yuan to U.S. dollar payment, equivalent to using the power of the country to export enterprises subsidy costs, damages China's exports of other countries with similar production capacity of business interests, which is not consistent with WTO rules; Third, the industrial structure will be more abnormal, low-cost or cheap products as export enterprises can make money, the original is not should be put into the business because of the export profits and desperately swap increased investment, the so-called central repeatedly made to reduce exports to increase consumption as the goal of economic restructuring will eventually come to nothing; Fourth, as the world financial crisis eased, foreign gradually restore spending power, export increased the dollar reserves will continue to increase in the RMB to U.S. dollar had a large number of distribution, domestic inflation will go hand in hand making a comeback.
Some people see here, perhaps luck is not the appreciation of the renminbi's foreign exchange reserves in China, after all, so that we get the world's first chair, which shows that we now have money in China, not like that no longer the poor and weak. However, the day the amount of foreign exchange does not mean we have wealth in the hands unbreakable, it also faces the possibility of continually falling in value.
When we deliberately used a low exchange rate for foreign currency, save money in the process, we return with something more dollars have been lost in less time; when we use foreign exchange reserves to various funds to buy U.S. stocks, the fund share price plunge (such as Blackstone) brings us a loss; when we use foreign exchange reserves to buy all the bonds, because these companies (such as Freddie Mac, Lehman) bankruptcy or loss we lost once; holding the dollars at a loss when we hesitated a dilemma, the United States has been printing money to rescue City, a steady stream of dollars available to make our dollars in the hands of further damage. These losses of tens of astronomical, interested readers can check out the Internet in China in the United States,
More importantly, China is a poor country, most can only be regarded as a developing country, this 2.4 trillion of foreign exchange reserves means that the Chinese people have sent more than 16 trillion yuan of wealth to the United States, and we did not get back from the Americans, where appropriate the wealth of Americans just gave us a 2.4 trillion of the IOU, and even there can be no IOUs, because the Americans do not therefore of interest to us, but U.S. dollar is a sovereign state has the right to keep them constantly printing depreciation. Of course, this is not to blame the Americans, black heart, the Americans paid the dollar means that they are willing to exchange with us, the problem is that our exchange rate system to the Chinese people can not use the money, this system should not be reform?
six, the future go?
China's many problems, had only an economic strategy can fully discuss the dispute, and then find the best policy. However, once stained with the political economic policies, saying that white is one of the leaders expressed their views for a particular phenomenon, the Chinese side of the unanimous opinion immediately be thousands, millions of lower-level will take the initiative and consciously look for supporting arguments for the superior argument.
on the revaluation of the yuan central government's tough stance has been issued, all kinds of media to act immediately, various experts have rightly condemned the acts of the U.S. hegemony, to find some plausible reason for confusion. Some presenters in fact, did not fully understand the principle of the exchange rate, could not wait to start extremely rich patriotic performances.
Some economists often ironic thing, for example, Keynes said that the recession, the government can hire a group of people during the day to dig trenches, to hire another group of people at night to fill out the ditch This repeated cycle, and then give them wages, so that you can pull consumption. Theory to get snookered like a farmer weeding in the field, will be the farmer laugh, because in his eyes it was a waste, is a fool acts, such as really want to take care of people, money is sent directly, why waste energy trenching . However, contrary to common sense is that some of the theory, but won the appreciation of government officials around the world, Chinese government officials at all levels have been regarded as a model, not the root causes behind the officials do not understand common sense, do not know a huge waste of money and efficiency low, but this theory profit from intervention in the economy, officials found a reason and an excuse.
exchange rate issue is probably no exception. The amount of days together in the central control of foreign exchange at the Central, this unearned windfall (as opposed to foreign managers) for the relevant sectors and the interests of interest groups is not a great thing, I believe that the hearts of readers of friends own sense of propriety. Can see the fact that the central bank's so-called experts, no one is not against Renminbi appreciation, opinion highly consistent, clear-cut attitude, which apparently decided to head butt the principle is at work. These experts and scholars to some of the problems seemingly rigorous logic plausible, as long as careful readers understand the text earlier in this article, will be able to match exactly the logic in which to find its vulnerable soft underbelly, interested readers can judge their own to analyze.
most people worry about so that if the yuan revaluation (As is the slow appreciation of the way or step that is the problem), a large export enterprises it not fallen? Slow appreciation of the renminbi would help if (for example, as some experts suggest that appreciation of 2%), unprofitable enterprises, it means, this enterprise is long overdue closure, it had therefore also profit, not the Americans gave them profit, but people across the country to feed them through inflation. As for the workers, would help if the government really want to help them, simple approach is to bill directly to them and let them switch as early as possible, countries are more used to youth needs of industry, struggling to prop up the country so why a Block loss of the factory, so why put a lot of wealth handing foreigners?
would help if the exchange rate eventually rose to market acceptance of the real exchange rate, the majority of enterprises will be based on actual behavior of the exchange rate to adjust their production, the exports to exports, the imports to imports, China's limited resources endowments will not be cheap or cheap, you can get a reasonable and efficient use and allocation, China's industrial structure is possible substantive adjustments, the Chinese economy was likely to rise from the ashes from Fenghuang Nie.
In fact, even if the slow appreciation is expedient at this stage, because, Qian Wenyi above, the right end from the market exchange rate adjustment, in order to improve efficiency, the Chinese economy to rid itself of dependence on exports turn the promotion of domestic demand, the only way out is to abolish exchange controls, get rid of the fixed exchange rate system, so that all foreign currency and RMB convertibility, the market will find the right from the way the exchange rate.
issues on the exchange rate and continue to spread misconceptions repeated the baseless assertion, some voicing support for the so-called economists played an aggravating role, history will eventually prove that they do not only focus on the reality of error and They nailed the academic conscience shame, they are: to loose Jo, Han Xiuyun, Wu Nien-Lu, Tan Yaling, Xiao Lian,, Zhou ... ...
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