The Sino US Exchange Rate Game Is Heating Up &Nbsp, Or The Head Meeting Is Hard To Make Progress.

Over the past year, the relationship between China and the United States has become increasingly uncertain, with frequent frictions at the political and economic levels.

"I think this is a unique opportunity for the two leaders to define some basic principles to guide our relationship."

Carter, a former national security adviser to the Carter administration, said in an interview with the first financial daily.

The exchange rate problem is hard to make progress.

The US South Korean military exercise, the Korean Peninsula crisis, arms sales to Taiwan, intervened in territorial disputes in the South China Sea, and a series of events made Sino US relations tense.

China, which is growing in confidence, is involved in international affairs in a new way.

At the same time, both sides are accusing the other side of violating the generally accepted international economic principles in the economic field.

But the interests between China and the United States are enormous.

The great hostility between the two sides is neither in the interests of the United States nor in the interests of China.

Brzezinski said that the scale of Sino US bilateral relations has grown so large that the scale often brings complexity.

Sometimes the pressure of conflict arises from this or that direction.

In response to President Hu Jintao's visit to the United States, on the economic issue, the White House said in January 5th that US President Obama will continue to exert pressure on China's exchange rate, and China must take measures to allow the renminbi to continue to appreciate.

However, many scholars believe that there will be no fundamental progress on this issue.

Wei Shangjin, a professor at the Columbia business school and director of the National Bureau of Economic Research of China, said in an interview with the first financial daily that there will be no substantive progress on exchange rate issues.

But without substantial progress, Sino US relations may not be a great deal.

Exchange rate is an important factor in the friction between China and the United States, but in fact, the exchange rate has no great impact on both sides' current account. The two countries need further analysis and understanding when discussing this issue further.

But in addition, there are many overlapping interests between China and the United States.

"On the one hand, the exchange rate issue is not the cause of China's current account surplus, nor is it the main reason for the current account deficit in the United States."

Wei Shangjin said, "the scope of Sino US cooperation is broad, and the foundation is not on the issue of exchange rate.

There is no need to fight on the exchange rate issue. "

On the eve of President Hu Jintao's visit to the United States, in January 11th, a group of top Chinese economists came to New York under the invitation of the US China Relations Committee and talked about the way of Sino US economic cooperation at the "2011 China Economic Forum" held by the NYSE.

Fang Gang, director of the National Economic Research Institute, told this newspaper's interview that the dispute between China and the United States is not only about exchange rate, but also on economic basis.

For example, China's savings are too high and consumption is too small; the United States consumes too much and saves too little; whether the two sides can adjust their respective economic structure is the way to solve these problems.

Pedersen Gary Bhave, a scholar of the International Economic Research Institute of the United States, believes that the total trade volume between China and the United States has reached 400 billion US dollars, of which China exports to the United States about 300 billion dollars, and the US exports nearly 100 billion US dollars.

However, he also believes that President Hu Jintao's visit to the United States is unlikely to make breakthroughs on this issue.

On the other hand, he thinks that between China and the United States

Xiao Geng, director of East Asian Affairs at the global center of Columbia University, believes that there will be more and more cases of trade protectionism and anti-dumping between China and the United States, but there is nothing particular to worry about.

"The reason for the increase is not necessarily related to the exchange rate, but because of the growth of trade between China and the United States," Xiao Geng said in an interview with China's Economic Forum in New York. "5 years ago or 10 years ago, the biggest friction with the United States was the European Union.

The European Union is not the enemy of the United States.

A lot of friction with the EU is due to the large volume of trade between the US and Europe.

The United States and Japan also have great friction.

As Sino US trade volume continues to increase, Sino US trade frictions will increase.

This is not a problem. It can be solved through the framework of WTO (WTO).

Fang Gang also told reporters: "I believe this is a normal situation in the long run, and the two sides should start with some real problems that can be solved.

Such as high-tech exports, if the United States liberalized high-tech exports, the reduction of its trade deficit will have visible effect.

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Great space for Sino US cooperation

Conflicts between China and the United States are continuous, but there are common interests in many respects.

The common interests of China and the United States lie in economic development and complementarity of economic structure.

Trade and scale between China and the United States have reached such a large scale that the disputed volume of trade is negligible compared with the volume of trade.

Xiao Geng believes that the exchange rate issue is not the most important factor in Sino US economic relations, that is to say, even if the exchange rate does not change, there are other ways to achieve rebalancing.

"For example, all costs in China are rising, raw materials and labor force, leading to the overall price level rising and inflation rising.

This will naturally reduce the competitiveness of China's economy. "

Xiao Geng said, "the same is true of the United States. The unemployment rate is very high.

The United States now has deflationary pressure, income is declining, and asset value is declining.

This will also reduce consumption and increase supply.

Rebalancing requires a longer process.

If I have patience, I think this progress is very smooth.

In addition, in terms of climate, energy and other issues, China and the United States, although there are disputes, but also have a huge space for cooperation.

The United States hopes that China can make more contributions, and China has the same goal, but it does not want to sacrifice China's excessive growth on climate issues.

In fact, there are many opportunities for cooperation.

Wei Shangjin said: "although the exchange rate issue is not the decisive cause of the imbalance between China and the United States, a more flexible exchange rate is also good for China. It can help China control the macro monetary policy and better prevent and control inflation.

China and the US can carry out a package of cooperation in exchange rate flexibility, energy and climate.

Make concessions to each other and seek common interests. "

In the field of financial cooperation, new progress has been made between China and the United States.

For example, the application of Morgan Stanley, Huaxin securities, and J.P. Morgan and the first venture securities joint venture has been approved in December 31st last year. Morgan chase and Morgan Stanley both occupy nearly 1/3 shares. This shows that China's financial opening up efforts are gradually strengthening.

Zhu Yunlai, President of China International Capital Co, said at the "China Economic Forum" conference in New York that 30% of the openness has exceeded the limits required under the WTO international framework.

And the process of financial opening will be a gradual process. I hope there will be greater breakthroughs this year.

In response to our questions, Zhu Yunlai said that many discussions between China and the United States were easy to be controlled by some political arguments. But in the long run, the prospect of cooperation between China and the United States is very huge, and there are many common interests to be excavated.

Brzezinski also wrote in the New York Times before President Hu's visit to the United States that after 30 years of opening up cooperation, the United States and China should not taboo the frank discussions on the differences between the two countries, but should do so when they know each other needs each other.

The failure to consolidate and expand cooperation between the two countries will not only damage both themselves but also the whole world.

Both countries should not deceive themselves into thinking that they can avoid the harm caused by the intensification of mutual confrontation. Both sides should know that one side's crisis may damage the other side.