Zuo Xiaolei: RMB Exchange Rate Pressure Has Not Been Relieved.

First is

However, we should be fully prepared for the recent situation that the US Federal Reserve still dominates the weak dollar. According to the established plan of the Federal Reserve, 850 billion to 900 billion dollars will be injected into financial institutions in the next 8 months, not just 600 billion dollars.

What is more worrying is that the injection of financial institutions can not change the financing problems of the small and medium sized enterprises in the United States and the improvement of the unemployment rate. The problem of derivatives in the US financial institutions is as high as 2 trillion. Will the Federal Reserve implement the third or even the fourth round of treasury bond purchase plan without the name of economic improvement? The recent rise in the US dollar exchange rate is likely to be a short-term change during the Seoul summit. Although the continued depreciation of the US dollar is unlikely, the weak dollar will continue to have a high probability.

The policy of maintaining a weak dollar is unlikely to change the international monetary system, but it may strengthen the demand for reform of the international monetary system.

Second, mutual assessment allows the world to see the dawn of changing the rules of the international game.

The Seoul summit stressed that countries should evaluate each other's economic indicators, rather than some countries or even one country has the final say.

This is the reform of the international rules of the game promoted by the G20 mechanism, and is the progress of the international community.

In the past, the developed countries mainly talked about developing countries, such as exchange rate and trade. The report of the US Treasury Department evaluated and judged the exchange rate and trade behavior of various countries on the level of exchange rate and exchange rate policy, or the way of hearing adopted by the United States Congress.

Of course, these assessments and policies are very biased.

International organizations, such as the world bank and the International Monetary Fund, used to assess the economic indicators and macro policies of developing countries. In the face of the economic crisis triggered by the developed countries, the past prejudices made them lose the authority to judge and assess the world economic situation, so they were forced to reform.

However, mutual assessment requires a common and acceptable basic standard. Otherwise, it will make the mutual assessment meaningless.

We hope that G20 can raise more questions about the rules of the game in the international market.

The third problem is that although Germany, France and some developed countries have accused the United States of accusing China of manipulating its exchange rate, the Fed has repeatedly printed money on a large scale, deliberately implemented the policy of the weaker dollar, publicly manipulated the depreciation of the US dollar exchange rate, and then has any qualification to accuse China of manipulating the exchange rate. Countries are also deeply hurt by the easing of the US dollar's ability to implement the policy of the weaker dollar, but this does not mean that the RMB exchange rate will not be politicized and internationalized again.

Do not think that the United States will not repeat the appreciation of the renminbi.

Do not forget that after the establishment of the new Congress of the United States, the exchange rate reform promoting fair trade bill will submit a new Senate deliberation. The US strategy of doubling exports in 5 years may be achieved by deliberately depreciating the US dollar. The cost of the pformation of the debt growth mode may pass through the weak dollar to other countries, and the RMB exchange rate will probably bear the brunt.

Do not forget that the United States has proposed many unreasonable motions, such as linking the voting rights of emerging market countries in international organizations to their exchange rate elasticity, and all countries set export trade at GDP 4% level.

These are all aimed at China.

We note that the declaration of the Seoul summit is not clear about the weak dollar policy of all countries.

"Gradual pition to market determination" and avoidance of "competitive depreciation" are against other countries' currencies.

So although the depreciation of the US dollar is one of the themes of the Seoul summit, it has not relieved the pressure on the RMB exchange rate.

Especially after the meeting, Obama did not directly accuse the RMB exchange rate according to the caliber of the summit declaration.

In fact, the United States Treasury Department raised the issue of "paying close attention to the appreciation of the RMB exchange rate" the day before yesterday.

Therefore, we should form a set rule of China's interest in coping with the appreciation of the RMB exchange rate and not easily change the established policy to give up the core interests under various political or international pressures.

There has been a view at home and abroad that the growth of China's foreign exchange reserves is related to the inflow of foreign exchange, because the appreciation of foreign exchange is not enough.

Since the crisis, especially in the United States, the number of loose monetary policies has been opened again, making it clear to the world that capital inflow is related to the global excess of US dollar liquidity and is related to the depreciation of the US dollar.

When the US dollar spreads globally, few countries and regions, including developed economies, can prevent capital inflows through appreciation.

Under the US dollar based international monetary system, capital inflow is not a deterrent to the appreciation of a country's currency.

This is why countries have to intervene in the foreign exchange market.

The view that the appreciation of the Renminbi should be used to contain capital inflows is obviously too bookish.

Before the fundamental changes in the international monetary system, China must strictly manage the inflow of money, and do everything possible to block the inflow of hot money. Do not have any illusions. According to the chief economist of IMF, current capital controls are justified.