China'S Economy Is Affected By The Depreciation Of RMB.

According to the China foreign exchange trading center, the RMB exchange rate in the interbank foreign exchange market in January 26, 2015 was 1 yuan to 6.1384 yuan.

Compared with the last trading day, the intermediate price of RMB fell 42 basis points, setting a new low in 2015.

The last trading day, 1 dollars to RMB 6.1342 yuan.

This is the second consecutive trading day reduction, the two day fell 137 basis points.

In 2015, the expectation of RMB devaluation is strong. Experts and regulators generally see the trend of RMB declining.

At the State Council new office conference held in January 23rd, Pan Gongsheng, deputy governor of the people's Bank of China, said that the new version of the QE policy of the ECB plus the trend of normalization of the US quantitative easing policy will further push the US dollar exchange rate to strengthen, which may be a downward pressure on the RMB to the US dollar exchange rate.

The chief economist of Industrial Bank believes that in the face of the current strong appreciation of the dollar, and after many attempts to crack down on China's highly leveraged technology, it is estimated that the key of 2015 exchange rate will be opened after all sides are poor.

It can be expected that the RMB exchange rate will really open up the depreciation of the real effective exchange rate in 2015, which means that the RMB will have a larger depreciation rate against the US dollar than in 2014.

He also audacious estimates that the biggest depreciation rate will be around 5% this year.

In 2015, due to the overall strength of the US dollar and the downward pressure on the economy, the RMB was facing a downward pressure.

First,

The rate increase is likely to be a foregone conclusion. The Japanese and European Central Bank will continue to adopt quantitative easing monetary policy. The US dollar exchange rate index is expected to further increase, and the attractiveness of developed economies to capital will further improve.

At present, the US economic growth momentum is strong. The IMF forecasts that the US economic growth will increase from 2.2% in 2014 to 3.1% in 2015, and the US stock market will continue to take the bull market. The euro area economic growth rate is expected to rise from 1.3% in 2014 to 1.3% in 2015. China's economic growth will enter a structural lag period.

Compared with the uncertainty of domestic economic trend and the performance of capital market, the attractiveness of the US stock market is beyond doubt.

Second, the downward pressure on China's economy is bigger.

Today, the National Bureau of statistics will publish data on economic growth in 2014, and the market expects 2014 data to be unoptimistic.

In 2015, investment growth or further decline: the investment in manufacturing industry will still slow down due to excess capacity constraints. Although the policy push has been strengthened, the growth rate of infrastructure investment may be slightly down due to the tightening of local government debt supervision policies and limited platform financing.

Real estate investment growth in the first half may also continue to fall.

On the export side, the recovery of the developed economies is expected to boost exports, but the depreciation of the RMB will reduce the enthusiasm of the capital through the export channel curve and squeeze out the high water content in the export data.

Thirdly, the real effective exchange rate of RMB has once again set a new high in 2014, rising more than 6% throughout the year, which is related to the RMB exchange rate mainly pegged to the US dollar.

Current Renminbi

Mainly pegged to the US dollar, resulting in a passive appreciation of RMB against the yen, euro and emerging market economies, affecting China's exports and employment.

If the dollar goes further, the real effective exchange rate and exports will be under greater pressure.

In the case of weak domestic demand, boosting domestic demand will also become one of the main points of policy, and a moderate depreciation of the renminbi may be an option.

Which industries have been affected?

1.

Affect the long-term stability of foreign trade enterprises.

The depreciation of the renminbi has an impact on foreign trade enterprises.

In order to avoid exchange losses, enterprises usually choose to shorten the order time.

But in general, enterprises have a long cycle from investment to output, and the exchange rate can not be determined, resulting in enterprises unable to decide whether to increase capital expenditure, thus restricting the further expansion of production capacity and affecting the long-term and stable growth of foreign trade.

"We should not ignore the spread of RMB devaluation sentiment in the current market, the weak domestic economy and the unsatisfactory trade figures. Coupled with the strong US dollar, enterprises have shown a devaluation of RMB sentiment since the three quarter. There has been significant changes in foreign exchange settlement and sales, and the willingness to settle foreign exchange has decreased, and the willingness to purchase foreign currencies has increased."

Some analysts believe that even if the central bank intervenes, it can only rely on "maintaining stability". It is very difficult for enterprises to see the sentiment of depreciated Renminbi in a short time.

2.

Manufacturing industry: cost reduction and profitability enhancement.

The devaluation of RMB is favorable for export oriented industries. The most favored sectors are textiles and clothing, and some low-end manufacturing industries.

As the renminbi continues to depreciate, Chinese manufacturers at the breakeven point will be able to make profits only on the devaluation of the renminbi.

The cost of China's manufacturing industry has dropped sharply due to the depreciation of the renminbi and the decline in the prices of raw materials and industrial inputs.

In the period of rising manufacturing costs, Chinese manufacturers can not rely on price competition, and the sharp fall in costs has restored their ability to compete on price.

Today, they can lower the price of products and regain the business they once lost.

At the same time, the depreciation of the renminbi and the fall in the price of inputs provide an opportunity for Chinese manufacturers to access western customers.

3.

Real estate industry: good country, but developers will be hit hard.

The impact of RMB depreciation on the real estate industry should be divided into two levels: first, for the national level, this will be beneficial.

The appreciation and depreciation of the renminbi are the measures used by the state to regulate and control.

Two is the real estate developers, especially small developers, the blow is relatively large.

Because the real estate industry has many financing methods, such as the traditional bank development loan, because of the regulation in the past few years, it has not been used in recent years, such as trust, fund, company listing and issuance, and overseas financing.

But in addition to overseas financing, other ways are the hope of the government.

Before the economic overheating and the "sequela" brought about by 4 trillion, the real estate industry is still in flood. Although the central bank has opened the door to overseas financing of real estate enterprises, the funds issued by domestic banks have been basically in a state of contraction. Therefore, the funds issued by various routes will eventually return to real estate through some realizable ways.

That is to say, the financing environment of real estate is still a deviation.

But for large real estate enterprises, such as listed companies or central enterprises, they can choose overseas expansion way to deal with the depreciation of RMB.

Because the depreciation of the renminbi is relative to the appreciation of foreign currencies, such as Vanke and Greenland, which have strong economic prejudging ability and policy sensitivity. In advance, they invest part of their assets overseas. In the case of devaluation of the RMB, the appreciation of overseas assets is equivalent to a hedge against domestic risks.

But small developers are bound to be hit hard by the size of the capital and the market.