Specifically, the continued depreciation of the RMB exchange rate has the following advantages and disadvantages:
1. Advantages and disadvantages of import and export: import decreases and export increases.
1. Imports will decrease, and the profits of import-oriented enterprises will decrease.
Because when importing goods, you must first convert RMB into foreign currencies such as US dollars in the bank, and then buy goods from abroad. After the devaluation of RMB, the same RMB gets less dollars and buys fewer goods, which leads to the increase of import cost and the decrease of competitiveness of imported goods. Therefore, the continued depreciation of the RMB exchange rate will inhibit imports, which is not good for imports.
2. Exports will increase, and the profits of export-oriented enterprises will increase.
After the devaluation of RMB, the dollars received from exporting the same goods can be exchanged from banks for more RMB, and the profits will increase. In order to meet the needs of competition, enterprises have more room to reduce prices. Therefore, the essence of the continuous depreciation of RMB exchange rate is to subsidize export enterprises and help exports, which is conducive to protecting low-end industries and backward production capacity, but it will increase industrial pollution and destroy the ecological environment, which is not conducive to the adjustment and upgrading of the national industrial structure.
Advantages and disadvantages of employment: increasing employment.
After the devaluation of RMB, due to the decrease of imports, the competition in the domestic sales market decreased, the sales of domestic products increased and the number of jobs increased; Because of the increase in exports, the profits of export enterprises will increase, which will also bring about an increase in employment opportunities.
III. Advantages and disadvantages of international capital flows and national foreign exchange reserves.
1. A large number of international hot money (international speculators) fled, reducing the country's foreign exchange reserves.
International capital flows are often greatly influenced by exchange rates. When the devaluation of RMB becomes a persistent trend, domestic and foreign investors will try to hold foreign currency assets such as US dollars for preservation, which will convert a large amount of RMB into foreign currency, trigger a large outflow of domestic capital, and produce a "capital account balance deficit". At the same time, due to the conversion of RMB into foreign currency, the demand for foreign exchange is in short supply, which will further depreciate the RMB exchange rate.
International capital will continue to flee if the devaluation of the local currency continues unabated. After reaching a certain level, the country's foreign exchange reserves will be reduced, or even a deficit will appear, which will lead to a serious financial crisis, the country's reputation will be seriously damaged, and the domestic political economy will face serious difficulties.
Please don't be pessimistic. China government has special control measures on international capital flow, and international capital cannot freely enter and leave China. Therefore, the above extreme situation will not occur at all.
The increase of export has increased the country's foreign exchange reserves.
As mentioned earlier, RMB depreciation will increase exports, increase the country's foreign exchange reserves, and produce a "current account surplus".
However, the depreciation of the local currency has a limit on the increase of exports, which mainly depends on the industrialization level of this country. If the level of industrialization is high, the depreciation of the local currency will obviously increase exports and foreign exchange, otherwise it will not be obvious. There is a simple reason. If your products are of low quality and poor innovation, people won't want them even if they keep cutting prices. Just like the popularity of smart phones, the price of feature phones in the market has dropped to only 1 and 200 yuan, but nobody cares.
China is the world's leading producer and exporter of industrial products, known as the world factory, and its industry is very developed. Therefore, RMB depreciation will bring a steady stream of foreign exchange reserves. But as mentioned earlier, it will increase industrial pollution and destroy the ecological environment, which is not a good thing.
4. Advantages and disadvantages of domestic prices: rising consumer prices; Stock and real estate prices fell and asset bubbles burst.
1. Imports affect prices: the prices of consumer goods for production and living have risen.
The depreciation of RMB exchange rate will cause the price of domestic imported goods to rise and push up the overall price level.
The country needs to import a large amount of oil, iron ore, wood, soybeans, grain and other consumer goods every year, and settle in US dollars. If the RMB continues to depreciate, the import price of these consumer goods will rise, which will drive up the cost of the whole industrial chain and eventually pass it on to consumers, causing inflation.
2. Capital flows affect prices: the prices of the stock market and the property market fell, and the asset bubble burst.
The continuous depreciation of RMB exchange rate will make international capital investors have pessimistic expectations, which will lead them to sell (sell) a large number of domestic stocks and real estate, and then convert the realized RMB into foreign currencies such as US dollars and flee abroad (hot money flight). As a result, the prices of the stock market and the property market continued to fall, and then the domestic asset bubble burst. Therefore, under the trend of devaluation of local currency, if you invest a lot of real estate, you should consider selling it as soon as possible!
At the end of 20 14, RMB depreciated, but China stock market rose sharply, which has a special background. First, China launched the "Shanghai-Hong Kong Stock Connect" on 20165438+17, and foreign investors can directly purchase the shares of China Shanghai Stock Exchange through the "Shanghai-Hong Kong Stock Connect" in Hong Kong, which is the second step of RMB internationalization. The positive impact of this measure far exceeds the negative impact of RMB exchange rate depreciation on the stock market. Second, the international oil price plummeted from 1000 to $60, a drop of 40% in half a year, which was a great benefit to China's economy.
Advantages and disadvantages of verb (abbreviation of verb) going abroad and studying abroad: the cost of going abroad increases.
After the RMB exchange rate depreciates, the same amount of RMB can be exchanged for less dollars, which increases the cost of going abroad and is not conducive to going abroad and studying abroad.
6. Advantages and disadvantages of gold price and international commodity price: rising!
At present, gold and international commodities are priced in US dollars. The depreciation of the renminbi is equal to the appreciation of the dollar, which is equal to the rise in the prices of gold and international commodities. Therefore, when the local currency depreciates, you should hold and buy hard currency such as gold!