Exchange Rate Report "Nuclear Deterrence": Sino US Economic Diplomacy Rush Hour

Ready to go.

In October 15th,

Yao Jian, a spokesman for China's Ministry of Commerce, said at a regular news conference in October 15th that the US side undervalued the renminbi on the basis of the Chinese surplus, and tried to adopt discriminatory trade protection measures against Chinese products, which seriously violated WTO rules.

On, October 14th, the US Department of Finance spokesman Natalie Wyeth declined to comment.

Chinese Foreign Ministry spokesman Ma Zhaoxu said on the 14 day that the appreciation of the renminbi can not solve the problem of the United States.

The whole world is concerned about whether the report can be released as scheduled. In the context of the global exchange rate war, will the us take the opportunity to label China as a currency manipulator and exert political pressure on China?

As of press release, the report has not yet been released.

The RMB exchange rate is no longer a simple economic issue for China and the United States, especially when the US mid-term elections in November are approaching. The political color of the exchange rate issue may have obscured its economic nature.

Liu Shengjun, vice president of the Lujiazui International Finance Research Institute of China Europe Business School, pointed out to the newspaper that under the pressure of the mid-term elections, the Obama administration had to show a tough stance on China on the issue of exchange rate.

From this point of view, the possibility of the US wielding the "currency manipulator" is an objective possibility.

Borges Staw, director of the Pedersen Institute for international economics, also holds the same view that the recent tough stance of the US Treasury Secretary Geithner on the RMB exchange rate has given him reason to believe that Geithner will call China a currency manipulator in this report.

However, Mr Obama is more inclined to believe that the government will postpone the exchange rate assessment until the end of the mid term elections, in order to avoid the current dilemma.

At present, the general consensus in Washington's political circles is that the possibility that the United States will identify China as a manipulator of currency manipulation is very low. After all, the last time the United States used the "currency manipulation state" in China was in the early July 1994 when Clinton was in power.

Mei Xin Yu, an Associate Research Fellow of the international trade and Economic Cooperation Research Institute of the Ministry of Commerce, has more plainly told this newspaper that the United States is just threatening China with the charge of "currency manipulation".

"Between China and the United States, which has the ability to destroy each other and achieve a balance of economic terror, such labels as exchange rate manipulation and comprehensive trade wars are like nuclear weapons, mainly deterrent, and the most powerful on the launcher."

Meng Kewen, President of the China Chamber of Commerce in the United States, told the newspaper that according to an oral investigation made by him, most American enterprises were neutral in the appreciation of the renminbi. Only those who specialize in export business in the US would welcome the appreciation of the renminbi.

Sun Lijian, a vice president of the school of economics, Fudan University, told the newspaper that even if it was accused of the so-called "currency manipulation state", China should not bow to political pressure, let the renminbi appreciate significantly, and repeat the mistakes of the Japanese Plaza Accord.

Exchange rate report

Liu Shengjun told this newspaper that no matter what decision the US Treasury Department made to the exchange rate report in October 15th, he believed that this is the embodiment of the negotiation and game between the two sides before the deadline comes.

Before the launch of the exchange rate assessment report, the United States is likely to use the "currency manipulator" bar as a counterweight to China's political pressure on the issue of RMB exchange rate.

If the two sides can reach a certain degree of compromise and compromise, the Obama administration is naturally willing to give up the use of "currency manipulation" for the fourth time to put pressure on China.

However, Liu Shengjun also pointed out that, even though it is difficult to reach a compromise between China and the United States, the Obama administration has given China the accusation of "currency manipulation state", which is only a political pressure action and can not directly play a direct role in the appreciation of the renminbi.

Only when the US levies special tariffs on Chinese goods under the so-called "currency manipulation state" will it exert direct economic pressure on the appreciation of the renminbi.

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However, Liu Shengjun believes that the possibility of such a situation is negligible, because China can also impose retaliatory tariffs on US goods, which will mean that the two big powers of China and the United States tear up their faces and fight a trade war, and finally they may go to WTO for the lawsuit.

Moreover, although the US Congress has been "finding fault", the possibility of the passage of the special tariff bill under the exchange rate is unlikely.

The RMB exchange rate against the US dollar has hit a new high on the day of the US Treasury's exchange rate assessment report. The renminbi has risen 2.7% against the US dollar this year.

In October 14th, the US Congress again pressed the RMB exchange rate.

Baucus, chairman of the US Senate Finance Committee (Max Baucus) held talks with Chinese Vice President Xi Jinping, Vice Premier Wang Qishan, commerce minister Chen Deming, vice president of the people's Bank of China and Yi Gang, senior officials of the Chinese government on the same day in Beijing.

In a statement after the talks, he said in a meeting with Chinese leaders, he expressed the hope that China would allow the renminbi to accelerate its appreciation.

China's decision to underestimate exchange rates has always been a thorny issue in Sino US relations.

To move our relationship forward, China must act to let the exchange rate appreciate immediately. "

Baucus also said in Beijing on the same day that the Senate is ready to push forward the legislation on China's RMB exchange rate after the mid-term elections in the United States.

After the passage of the relevant bill, the US Department of Commerce will allow punitive tariffs on Chinese goods.

Bloomberg quoted Baucus as saying at a press conference 14, "I think it is very possible for the Senate to pass the exchange rate bill and send it to the president."

This reporter called Senator Baucus Jennifer Donohue, a news officer in Washington. She said the Senate Finance Committee is the most appropriate body to answer questions related to Renminbi.

At the time of press release, Meaghan Smith, a spokesman for the Commission, had yet to respond to a comment by reporters.

But Meng Kewen, President of the China Chamber of American commerce, told this newspaper that he was not optimistic about the bill.

According to his understanding, the US business community has widespread opposition to this bill, and the business community has put forward many objections.

"If the Senate passes this bill prepared by the house of Representatives, I will be very surprised."

Mei Xin Yu also told this newspaper that most of the members who voted for the bill in the US House of representatives were just taking the opportunity to show their talents, trying to show their courage to push China to raise the RMB exchange rate to "defend" American employment opportunities.

Mei Xin Yu told this newspaper: "underestimating the special duties of the exchange rate" will also have a negative impact on the US economy. Because the "made in China" has penetrated into all aspects of American life, if the bill is really implemented, the US consumer goods market will be in a complete mess, and the global supply chain of many American enterprises will be completely disrupted.

Under the current circumstances, the Obama administration is more likely to adopt a "drag trap" to postpone the exchange rate assessment until the end of the mid-term elections.

In this way, China and the United States can avoid the impact of short-term factors such as the US mid-term elections and get more time to negotiate and compete.

China should take the initiative to defuse the charge of currency manipulation.

But there is a certain momentum of appreciation for the renminbi.

According to figures released by the people's Bank of China in October 13th, as of the end of 9 this year, the balance of China's foreign exchange reserves was US $26483, which increased by 194 billion US dollars over the end of the two quarter.

China's foreign exchange reserves have reached a record high, which has also left the critics of the RMB exchange rate with a grain of salt.

Liu Shengjun told this newspaper that China has accumulated a huge amount of foreign exchange reserves and a favorable balance of foreign trade. China should really try to reduce its trade surplus and foreign exchange reserves, but it is obviously not the right way to solve this problem.

Meng Kewen, President of the China Chamber of Commerce in the United States, pointed out to the newspaper that the best way for the United States to solve its employment and trade deficit is not to fight the exchange rate war.

Since the 2009 financial crisis, rebalancing the world trade and adjusting the industrial structure of each country is the primary task for all countries.

In academia, Fred Bergsten, director of the Pedersen Institute of international economics in Washington, D.C., also proposed 14. In addition to allowing the US Treasury to set China as a currency manipulator, the US can also make the renminbi appreciate by selling dollars and buying Renminbi in the capital market.

Liu Shengjun also told the newspaper that Americans are now complaining that the price advantage made in China comes from the undervalued RMB exchange rate, which is obviously a mistake.

He pointed out that the price advantage of "made in China" is actually because the price of production factors in China's society has been distorted, and the factors of production such as wages and environmental costs have been seriously underestimated for a long time.

Therefore, to change the Sino US trade pattern, the key is to speed up the normalization of production factor prices in China, so that the prices made in China will rise naturally.

In this way, the trade imbalance between China and the United States will be eased.

From one point of view, if China wants to absolve the accusation imposed by the US on "currency manipulation", it should take the initiative to explain to the United States the real secret of low price "made in China" and begin to reduce China's foreign trade surplus.

At the recent IMF annual meeting, Yi Gang, vice president of the people's Bank of China, made clear that the Chinese government would reduce its current account surplus to less than 4% of gross domestic product (GDP).

In this regard, China has already started to take action. According to the Ministry of Commerce, China's trade surplus has narrowed to US $120 billion 600 million in the first 9 months of this year, down 10.4% from the same period last year.