Zhang Shuguang: RMB Exchange Rate Is The Key To Solving Global Economic Imbalances

On the morning of September 25, 2010, in "2010 China"

He said: "China and the United States are facing economic readjustment and rebalancing. We all know that this crisis is the result of economic imbalances, as well as the correction of imbalances. It is a serious imbalance from the structure, and this imbalance is concentrated in China and the United States.

therefore

The United States is high consumption and low savings. The national savings of the United States is only about 10%, and household savings are basically zero. Americans rely on squeezing loans and borrowing money. For example, real estate securities are squeezed, and the loans they get are used to buy cars and travel, which is not in the past.

So the state of borrowing in the US is not sustainable.

"

So there is a serious imbalance between China and the United States. The performance of this imbalance is also coming back to us. We are high savings and low consumption. The investment rate is almost 43%, while the consumption rate is only 48%, which is not comparable with the past. It is also comparable to other countries. They are 60% to 70%, and we are less than 50% now.

The savings of the Chinese government and the savings of enterprises are quite numerous. As we all know, in fact, there are many savings for residents. Let's take a look at the savings deposits of the residents. Of course, these two savings are not entirely a concept. Savings deposits in 2000 were about 6 billion, and 21 trillion in the 08 years, almost 22 trillion, which has increased a lot.

So our savings rate is very high, and the consumption rate is very low.

"The situation of our trade is very clear to everyone. Our surplus, though 08 years or more than 3 billion, is less than that of last year. It may also be less this year, but it is still quite large.

So China is just coming back, so the problem is quite serious. China's investment and export driven economy is also unsustainable.

So both of them are faced with the problem of adjustment.

What is the direction of adjustment? It seems that the United States will re industrialize, increase savings and reduce consumption, which is the adjustment of the United States.

The question of making industrial choices has just been mentioned above, whether it is choosing traditional industries or choosing new and high technology industries, such as low carbon industries. It seems that traditional industries are not competitive in the United States. Just now, Mr. Chen Xingdong said, the gap has already been placed in this place. The United States can not compete with China in traditional industries. As a direction of re industrialization, the emerging industry should adjust its direction to re industrialize to increase exports and increase employment. What is the development of low carbon industry? What kind of conditions can we develop? This is the key issue.

Of course, the low carbon industry has become a global trend. We can see that we are lagging behind in the traditional industrialization. China has taken a step in the development of the IT industry. How about China in the development of low carbon industry? Can we catch up? China's adjustment is also very clear, China should reduce savings, increase consumption, increase imports, and come back. "

"This is a very important issue in the direction of adjustment. We need to push ahead with urbanization. We can also say that we need to industrialize again, because our industrialization can be said that the industrialization of foreign aid in the past 30 years is basically successful. The market is abroad, and resources are abroad. We have succeeded in industrialization through the use of the scale economy and the advantage of international division of labor in the industry.

But our urbanization is actually slow, but there are serious distortions. One is urbanization. The migrant workers in cities have not become real urban people. Their ideas, lifestyles and consumption habits are all rural.

So there are some new phenomena of urbanization in China, for example, left behind children, for example, couples separated from each other, such as many people renting houses, plus Spring Festival climax, such special things.

Another important problem is that our urbanization is also unbalanced. The expansion of our urban area is faster than that of the urban population. The speed of urban population growth is faster than that of urban life.

Since the beginning of 08 years, the area of our urban expansion and construction has been 6.7%, while the population is only 2.5%. As for our urban life, we still have many planned economy colors, monotonous, closed and lack of innovation.

In spite of the great changes in the city's appearance, the changes in the city's life are not too big, and we still have very important problems. The development of urbanization is very fast, the service industry is lagging behind, and our development direction is clear. "

"I think there is a very important condition for the United States to re industrialize, that is, it needs to implement the weak dollar policy, because the weaker dollar can increase US exports, and the weaker dollar can increase the cost of traditional industries and attract resources to new industries.

But in reality, we can see that since the crisis, the US dollar has been strong. This is probably related to the current international financial sustainability, and is also related to external conditions. But is it related to the US policy? I think it is also a question worth considering.

Because the current US policy, if the dollar goes down, we can see what problems the US economy will have, so in the short term the US dollar is strong, and the long run is probably a downward trend.

"China's situation needs to be adjusted. I am afraid that exchange rate adjustment is also an important issue.

There are great distortions in China's exchange rate system and exchange rate level, but there is a phobia in China's adjustment to go back, afraid that the enterprises can not afford it. Our stress test is 3%. In fact, I am afraid it is not so. 05 years to 08 years, the appreciation has been 21%. China's exports have not declined and increased, and the coping ability of enterprises has also been sacrificed.

In fact, China's export elasticity of income is greater than price elasticity.

In addition, we are afraid of the loss of existing foreign exchange assets. In fact, this loss is something that has already formed. It is a stock. The stock will lose with the appreciation or the depreciation of the US dollar. Now how to reduce the loss, the main way to reduce the loss is actually the appreciation of the exchange rate. After appreciation, we can solve this problem from two aspects of supply and demand, which can reduce the supply and reduce the increase of foreign exchange. I am afraid that only when the exchange rate moves, our interest rate and other factor prices will be further adjusted.

"I think the government's policies are also problematic among the two countries. Since the United States is such a way, some of the policies currently implemented by the United States, such as the previous announcement of permanent tax cuts for the middle class, will stimulate the consumption or increase the savings? It is clear that I believe that the most important aspect of tax reduction is to increase consumption, and that the United States should reduce consumption, so this policy is not necessarily appropriate.

What is the result of the US's policy of easing as far as possible? I think it is not consistent with the direction of his adjustment, because this policy as loose as possible may be beneficial to some big financial institutions, but not conducive to economic adjustment. "

"China's financial policy, since we have such concerns, our current adjustment is basically two ways, one is investment, and no matter where and how little it can be adjusted. China now mainly uses this method, because increasing investment in infrastructure is also good, including others.

China seldom uses the price method, the exchange rate remains unchanged, the interest rate remains unchanged, and the price of the other elements remains basically unchanged, which is quite unfavorable for the adjustment.

Only when these prices are moved can it be a real market adjustment rather than the government's manipulation there.

"On this issue, if China and the United States want to make adjustments, I am afraid that it is necessary to cooperate. However, all countries are proceeding from their own interests, and there are really large areas of difficulty that are not necessarily compatible with each other.

Recently, the United States Senate has adopted an anti subsidy charge for countries with low exchange rates. The appreciation of the renminbi has not solved the problem of the United States, and it is impossible for the United States to make others bear the cost.

If I want to cooperate, I think that reciprocity is necessary. We should consider it very well and share the cost together to share the benefits of adjustment. "