The Impact Of RMB Appreciation On The Export Of Shoes And Clothing Products Is More Harmful Than Profits.

Since July 11th, the appreciation of the renminbi has been the focus of competition between China and Western countries for a period of time. It is also the focus of domestic footwear and other manufacturing industries.

Some western countries, especially the right ones.

Why does a country need international?

Whether the RMB appreciates or not should weigh the pros and cons with these two criteria.

On the face of it, the advantages of not appreciating the renminbi are: first, it is conducive to the export of shoes and clothing, and the two is that the huge foreign exchange assets in China will not depreciate.

But if we deliberate carefully, the authenticity of these two benefits is doubtful.

No one denies that the currency underestimation can promote the general economic principles of exporting products such as shoes and clothing.

The question is, what is the purpose of export? If it is to exchange value in exchange for use value and to exchange rarity with scarcity, then, as long as China's latest foreign exchange stock has exceeded 3 trillion US dollars, we can see that there is some imbalance in the current import and export trade.

If it is to achieve the international inflow of wealth, it is necessary to find a reliable wealth attachment, and relying solely on the credit of US dollars or US Treasury bonds is far from enough.

If it is to earn foreign investment in capital, then there seems to be no reliable investment opportunities and good opportunities in the current international market.

Even CIC's "national team" seems to have failed.

In this way, there is no denying the intention of exports to the economic importance of a country. It is only to say that in the micro economic field, it may be better for a shoe and clothing enterprise to export more. However, in the view of macroeconomics, there is a reasonable and balanced relationship between imports and exports.

Under the managed exchange rate system, if we insist on using the method of underestimating the local currency to achieve excessive export, though it is effective, its disadvantages can not be ignored.

As for China's huge foreign exchange assets, do not depreciate. This is the most natural desire of every Chinese to pay a lot of sweat and sweat.

However, the depreciation of foreign exchange in our hands does not depend on the good will of the Chinese people.

To change the inflation policy of some countries is by no means a currency appreciation.

This requires a comprehensive game of economy, politics and diplomacy among countries.

No one will object to the export of shoes, clothing and other products if they can get real wealth inflows.

However, under the current conditions, the disadvantages of insisting that the renminbi does not appreciate is, first of all, that the large amount of US dollars exchanged for cheap exports of real commodities is not very strong, and does not necessarily mean real and reliable wealth.

After the outbreak of the financial crisis in 2008, the United States launched two rounds of loose monetary policy.

The so-called "quantity easing" is the extremely loose monetary policy which is implemented by means of quantity and means of issuing currency notes when interest rates are already too low to be used.

The spread of paper money is bound to mean inflation.

Inflation is bound to mean currency depreciation.

If there is still some truth in the appreciation of the renminbi and efforts to maintain a lower exchange rate, it is hard to understand that China will insist on the appreciation of the renminbi against the US dollar if the US currency is self depreciating.

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The exchange rate reflects the parity between the two currencies.

If the dollar should depreciate, if we insist on a relative appreciation of the renminbi, it means further selling our exports.

This is like if China was in the same year, the "golden ticket" has been devalued because of its spamming. You insist on selling the gold bar and silver dollar to the "national government" before the price of depreciation, but only to replace it with the same amount of gold certificates as before.

From a larger historical scale, the US deficit finance seems to have become a difficult policy to change.

According to the description of Chinese scholar Song Hongbing in currency war II, the public private debt in the United States has risen by 7-8% per year in recent years, far exceeding its GDP growth rate of about 3%, and its total amount has exceeded 370% of its annual GDP total.

How to solve the astronomical financial crisis seems to be the only way to issue paper money.

So in the long run, it is a luxury to expect the us to return to tighter monetary policy. Therefore, holding the US dollar as a major reserve currency is always a huge worry.

Second, it also caused imported inflation.

Two rounds of loose green tickets will not stay in the US but will flow to the rest of the world.

In recent years, Chinese people often talk about the so-called international hot money inflow.

In fact, a major commodity exporter like China does not have to import large quantities of foreign currency through the way of hot money inflow, and only through legitimate means of general trade.

Through this way, the United States leads overseas spamming tickets abroad, on the one hand, because it enjoys cheap Chinese goods, thus making the country inside a "deflation" state.

The US CPI rose by 3.8% in 2008 and 2.1% in 2009.

At present, it is only about 0.5%.

Whether it is hot money or trade, excessive foreign currency inflow is bound to cause imported inflation.

While underestimating the exchange rate of the local currency, China has imposed a mandatory, at least fully established foreign exchange settlement system, which concentrates all its foreign exchange on the central bank.

What the central bank takes to earn foreign exchange is to print money.

The more foreign currency inflows, the more money the central bank receives.

Therefore, in recent years, the so-called foreign exchange fund has always been an important factor leading to the issuance of money in China.

The latest figure is that China has more than 3 trillion dollars of foreign exchange held, such as the recent exchange rate of about 6.5, will release more than 20 trillion yuan.

Because of the large number of foreign exchange generated from exports, the excessive number of tickets has led to imported inflation.

If foreign exchange is large, if we can buy the needed commodities through trade channels and increase the supply and abundance of goods in the domestic market, we can still play a certain role in suppressing inflation.

But in fact, there is no more demand for goods in China than in the international market.

Under the imbalance of international trade structure, the central bank's concentrated foreign exchange has not a good way out. Some of them bought the prospect of doubtful American debt and a small amount of European debt.

As a result, the Central Bank of China has almost become a stack of banknote printing factories in the United States.

Third, it is also easy to trigger international trade disputes.

Chinese commodities are highly competitive in the international market.

There are many reasons for this.

But the main reason is that Chinese workers have a high professional quality and are hardworking and hardworking, and are also related to the historical factors of China's long term low wage policy.

In many developed countries, labor costs are high due to the long-term implementation of high welfare policies, which seriously affects the competitiveness of their products.

But even so, a large number of Chinese exports will cause fierce trade friction.

In friction, we can say to the United States that most of our exports are not produced by you, and will not cause substantial damage to your related industries, but some countries that still have similar industries in China can not explain this.

In the current friction, the United States seems to have found a way to deal with China by issuing the US dollar to depreciate its currency value, and no other country without the right to issue the currency of the world has such a way.

Therefore, trade conflicts often lead to various international disputes, which make our country in a relatively passive international political and economic environment.

Behind the burning of Chinese shoes in Spain and the persecution of Chinese businessmen in Moscow, we can see the attitude of hatred towards China's export commodities.

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On the contrary, the advantage of RMB appreciation is that, first, it makes the price parity between the RMB and the main trade currencies become more reasonable, making it a price signal that can truly reflect the supply and demand status and the status change of various countries in international trade.

In the long run, this will help to improve international economic imbalances, and also help to change China's own economic imbalance.

In the course of China's economic take-off, we have greatly reduced the RMB exchange rate for many times in order to develop an export-oriented economy. This is the right strategic choice.

The problem is that after 30 years of rapid development, China has already formed a relatively strong industrial production capacity, and after accumulating considerable financial resources, the income of our citizens, especially the physical consumption level, is still quite low, and a large quantity of resources can meet the needs of the international market through low price exports of commodities.

This situation is becoming more and more unreasonable.

Even from the perspective of stimulating domestic demand, we need to adjust the structure of foreign trade and the corresponding exchange rate policy.

Second, it is conducive to improving the long-term trend of deteriorating terms of trade in China.

In the early years, it was often said that China's terms of trade tended to deteriorate.

The example is that we need to use hundreds of millions of pairs of socks to exchange for a Boeing aircraft.

In fact, the most convenient way to change this situation is RMB appreciation.

If RMB appreciates 10%, we can save tens of millions of pairs of socks in the paction of socks and aircraft.

Third, it is conducive to changing the supply and demand situation in the domestic market and reducing the momentum of price inflation in China.

In the micro economy, "saving" means unsalable, which means loss.

But if we save the socks we used in the above cases and the like to expand domestic demand, we can curb the price rise in the domestic market.

Fourthly, it is conducive to enhancing the international purchasing power of RMB, thereby enhancing the consumption ability and well-being of our citizens.

Some scholars are quite dissatisfied with the argument that RMB appreciation can improve the purchasing power of the international market for domestic consumers, saying that if you take the renminbi out and do not accept it, it is not in line with today's reality.

As we all know, the RMB has actually started the process of internationalization. In China's neighboring countries and regions, the RMB has already formed the real ability to pay.

With the further internationalization of RMB, the benefits brought by appreciation to the national people will become increasingly apparent.

Even in the process of tourism, study and other foreign exchange, the benefit of the local currency has been gained. At the very best, the national people account for the "cheap" of the Central Bank of China, which is not cheaper than the direct coupon issued by the state to the national consumer coupon.

Besides, when the central bank first collected foreign exchange, it only paid for printed banknotes.

Will there be any negative side of the appreciation of the renminbi? Surely there will be.

But we should also analyze and predict the disadvantages.

The appreciation will inevitably result in the disappearance of foreign exchange reserves, especially the wealth of the US dollar. This is the situation most people do not want to see.

But the problem is that the dollar is already a reality, so the depreciation of the dollar is already a fact.

Under such circumstances, it is only a self comfort to insist that the US dollar is not lost by insisting on the appreciation of the renminbi.

This is not the only problem.

If we insist on not appreciating, it means that in the future foreign trade, we still insist on selling goods at a lower price in exchange for the US dollar that has actually depreciated.

The new dollar will eventually depreciate.

The realization of the appreciation of the renminbi means that we no longer recognize that the US dollar still has the same purchasing power as before.

Do you want to buy Chinese goods? You have to pay more dollars.

Lang Xianping, a financial economist, blamed the low price of Chinese export shoes and clothing on the low end of the industrial chain.

In fact, this situation is also related to the vicious competition in Chinese business culture.

In many cases, it is the low price competition of some enterprises that leads to another export commodity selling "cabbage price".

Therefore, it is very difficult to change the deterioration of terms of trade through the self-discipline of individual shoes and clothing enterprises.

The appreciation of the renminbi is equivalent to a collective price increase that all Chinese exporters have to get involved in.

In China, many export commodities are long necessities and daily consumer goods which are no longer produced by developed countries. Such collective price rises should be hard to resist.

If RMB appreciates, because of China's economic volume and industrial structure, at least for a long period of time, no one or more economic fitness can take the place of its world factory, especially in the middle and low end footwear and other manufacturing industries.

After a few years, with the disappearance of demographic dividend, it is impossible for China to maintain the status of the world factory in the middle and low end.