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80 Billion Loss Per 1% Appreciation. China First Demanded The US Dollar To Stop Depreciation.

2008/4/16 12:07:00 14

80 Billion Loss Per 1% Appreciation China First Demanded The US Dollar To Stop Devaluation.

China, which has been on the defensive in monetary policy, has begun to make different noises recently.

At the meeting of the joint development committee of the world bank and the International Monetary Fund (IMF) held in April 13th, Li Yong, Vice Minister of finance of China, appealed to the world bank and IMF to urge developed countries to implement responsible monetary and exchange rate policies to eliminate the financial crisis.

This is the first positive response of Chinese officials to monetary policy of developed countries.

Debt relief, US dollar suicide, depreciation

Li Yong made this statement against the backdrop of the sharp depreciation of the US dollar and the rapid appreciation of the renminbi.

In April 10th, the RMB exchange rate against the US dollar broke 7 for the first time, while the US dollar fell repeatedly at the time when the RMB exchange rate hit the fastest rise in history. This is due to the US authorities' policy of using inflation to reduce the debt burden of Americans since July last year.

Facing the pressure of huge external debt and internal economic development difficulties, the United States adopted the "weak dollar policy", and the US Congress and government officials began the process of putting pressure on the RMB for several years.

Especially after the outbreak of the subprime mortgage crisis, the pressure was further increased.

China has adopted prudent monetary policy.

In recognition of lessons learned from the financial crisis in Southeast Asia, China rejected all the liberalization of Renminbi capital and accumulated a large amount of foreign exchange reserves.

Drawing lessons from the appreciation of the yen, China has adopted a slight appreciation, stepping on the pace of gradual appreciation and structural adjustment.

However, the suicidal devaluation of the US dollar is disrupting this rhythm.

Adverse effects on China's export enterprises under pressure

The acceleration of RMB appreciation has brought heavy pressure to China's economy.

The Central Bank of China holds foreign exchange reserves of US $1 trillion and 680 billion, and 70% is US dollar assets. Each appreciation of 1% means a loss of more than 80 billion yuan.

Meanwhile, China achieved a trade surplus of US $8 billion 560 million in February, which was much lower than the US $19 billion 490 million in January, and this trend is continuing.

China's large number of export enterprises lost competitiveness due to the appreciation of the renminbi, resulting in factories closing and workers losing their jobs.

At the same time, the depreciation of the US dollar also hurts the world economy.

Li Yong, Vice Minister of finance, stressed at the meeting that since the outbreak of the subprime mortgage crisis in the United States, the US dollar has continued to depreciate, the international financial market has been turbulent, and the world economic growth has slowed down significantly. It shows that the main economies are facing the double risks of economic growth and inflation, the rise of commodity prices, the intensification of international capital market volatility and the rise of trade protectionism.

Some experts criticize that the "weak dollar policy" has led to the American debt lending carnival. Then, Americans are trying to solve the asset bubble with the depreciation of the US dollar and the American debt to other countries, which is extremely irresponsible and short-sighted.

Li Yong appealed that the world bank and IMF should seriously assess the strategic impact of the current world economic situation on development.

China appreciates the idea of "inclusive and sustainable globalization" put forward by President Zoelick of the world bank.

The concept of inclusiveness and sustainability is not only applicable to developing countries, but also to the current international economic system, including developed countries.

"It is time for China to stop the devaluation of the dollar," Mei Xinyu, a researcher at the Research Institute of the Ministry of Commerce, told reporters that China must put forward reciprocal exchange rate responsibility for the world's largest "old man".

The devaluation of expert opinion is no different from "repudiation".

Professor Wang Yuanlong, an international financial expert and a researcher at the Bank of China, said that it is more objective for the Chinese government to require developed countries, especially the United States, to implement more responsible monetary policies.

He said that the current cooling of the world economy and the intense turbulence of financial markets are closely related to developed countries, especially the United States, especially the US dollar.

As a great power, and the US dollar is a pivotal currency in the international economic and financial system, the United States continues to depreciate against the US dollar.

Wang Yuanlong said that the United States did not exclude the deliberate intention of the US dollar to depreciate, and this behavior is no different from "repudiation".

"The resources that have been laboriously produced by developing countries have been brought to the US for us dollars, while the United States only needs to run the banknote printing machine without stopping.

A foreigner holding a dollar is actually equivalent to a creditor's right, but of course, the interests of creditors are greatly damaged because of the depreciation of the US dollar. "

Wang Yuanlong said.

//cn.jxmm