China Has No Time To Compete With Japan On Exchange Rate Issues.

Other Asian countries have also been affected.

However.

The financial media pointed out that other countries were trying to avoid losing balance between the local currency and the yen exchange rate.

But China has so far insisted on its position. Since June, the RMB has remained stable against the US dollar.

There is no change in the Hong Kong dollar linked to the US dollar.

At the same time, the sharp fall in international crude oil prices controlled Japan's energy import costs and helped to maintain its current economic policy.

Although there are various tensions between China and Japan, the outside world does not believe that Japan intends to crack down on China in financial terms.

The Japanese government, which is under the leadership of prime minister Abe Shinzo, is looking for expedient one after another to stimulate sustained economic growth in Japan, where the population continues to decrease and the public debt burden is heavy.

Similarly, when China lowered its benchmark interest rate in late November, it was not seen as a response to Japan, but rather regarded as a domestic stimulus measure aimed at keeping the economic growth rate above the official target of 7%, lifting the crumbling real estate market and borrowing activities of state-owned enterprises.

London Business School (London Business School) economist Richard Portes (Richard Portes) believes that the continued depreciation of the Japanese yen may make some of China's poorer export manufacturing enterprises in a more difficult position, but Chinese President Xi Jinping is still committed to promoting reforms aimed at increasing consumer demand and reducing dependence on exports.

Portes, an expert on the exchange rate market and its impact on economic growth, said: "the Chinese government will naturally feel the pressure from those companies that manufacture toys and T-shirts.

But the strategy that comes from the low end manufacturing economy is in the interests of China, and that is what they intend to do. "

The trick will be to manage the renminbi so that it can be pformed in accordance with China's timetable, rather than being forced to make an advance or cause to make an issue on foreign exchange, which either causes inflation to return (more than the current 2%-3%) or cause dangerous deflation (at the same time, China's overall slowdown).

This is not to say that China's monetary sector is disdained to adopt some currency manipulation measures. In 2012, they had done this kind of thing, and stopped the RMB's steady appreciation since 2010.

This practice has effectively curbed speculators.

Although China has a strict capital control system, these people can drill all loopholes and use all means to invest in the renminbi.

"The Chinese government arranged a devaluation of the RMB for a period of time, thus changing the market mentality," said porters. "They do not want the market to assume any assumption."

A steady appreciation of the currency can enhance the purchasing power of Chinese consumers or resource buyers, as they have recently recognized in the continuing decline in global oil prices.

China is the world's largest importer of crude oil - about 6 million barrels a day, and China has seized the opportunity to build its strategic oil reserve on an unprecedented scale - up to now about 200 million barrels, equivalent to 30 days of imports.

Since June, the price of RMB denominated oil has fallen by 22%, making Sinopec and PetroChina and other Chinese refining enterprises able to export gasoline and other refined oil in a profitable state at a time when domestic demand is slowing down.

Some people, including Soci Albert t G e n rale, who have been pessimistic about Albert Edwards, believe that China will be forced to let the renminbi depreciate because of Japan's loss of control over the yen.

In a recent report, Edwards pointed out that China has experienced nearly three years of producer price deflation, which is as bad as the consequences of the 1997 Asian currency crisis.

Such deflation sooner or later will be a serious blow to China's over leveraged borrowers, so that the Chinese government must intervene.

"

This is intolerable and will not be tolerated, "Edwards insisted." they will let the renminbi depreciate. "

Don't jump to conclusions so quickly, porters replied: "many studies have shown that exchange rate is not so important compared with quality, marketing strategy, backup and service.

If you have these advantages, the exchange rate is not unimportant, but it may take dramatic changes to produce results. "

While China is concentrating on avoiding the more important task of the so-called "middle income trap", the pressure on the renminbi may be just a disturbing factor.

Stephen Hroch, a senior research fellow at Yale University (Stephen Roach), was the chairman of Morgan Stanley Asia region. He wrote the book "imbalance: interdependence between the United States and China" (Unbalanced: The Codependency of America and China (Yale University Press, 2014).

He said the Chinese government is eager to avoid the ingrained trend that the per capita income of developing economies will continue to rise to $12000 to $15000 a year.

Roach asserted that in order to maintain the momentum of economic growth, the Chinese government used the strategy of opening up the Chinese market to other countries and regions 35 years ago by Deng Xiaoping. Its tool is the long and comprehensive leading group of deepening reform.

The leading group, coupled with the high-profile anti-corruption campaign, aims to curb the resistance made by deep-rooted power groups.

Roach said: "the western countries are not fully aware that China has turned to a different implementation structure, and has broken away from the old state planning organs." the new government under the leadership of Xi Jinping has realized that these old organs are the crux of the problem.

The yen's morbid depreciation comes from

With the increasing competition from the rising export powers such as India, will the new Chinese government stick to this "creative subversion" determination under such circumstances? The fall in oil prices will benefit China's oil refining enterprises, airlines, and energy dependent manufacturers, but it will be less favorable for shipyards who expect crude oil pportation.

China has also seized the opportunity of western countries to sanction Russia (Russia's ruble is particularly strong), finalizing the long-term contracts for the import of natural gas, including the second round of natural gas supply framework agreement worth $280 billion signed in November. According to the agreement, Russia provides 30 billion cubic meters of natural gas from China's new oil and gas fields every year to Siberia.

At the same time, at the same time, the experience of Japan's disappointing economy in the past 20 years should at least convince Chinese leaders that economic growth can not be achieved without deepening reforms.

He said that because China's main export markets (including Europe) had weaker demand than the exchange rate issue, it would be a mistake to fight Japan's currency war.

"Korea and China Taiwan are worried about Japan, so in a sense, the Chinese mainland should be worried about Japan," added economist Paul Potts. "But in general, we attach too much importance to the role of exchange rate in determining the competitiveness of a country."