the impact of RMB appreciation on China's economy

China should adjust its industrial structure by increasing environmental costs and abandon its short-sighted development strategy.

For more than p>2 years, China's traditional mercantilist development model has both advantages and disadvantages. During this import and export trade exchange, China's economic capital has increased greatly, but its natural capital has suffered heavy losses. At present, several large ecological danger zones have been formed in China, such as the South-to-North Water Transfer Project. The shortage of water resources in North China is a foregone conclusion, and China has to adjust the allocation of resources through water conservancy projects that cost hundreds of billions of yuan. The black soil in the three northeastern provinces is a layer of surface black soil formed after hundreds of millions of years of vegetation decay, and only Ukraine and the central part of the United States have one in the world. However, after the devastating development in recent decades, the soil erosion of black land in China is serious. If we don't increase the cost of ecological protection in this area and blindly pursue cheap grain production and export, this black land will expose rocks in a few decades. The production of wool and cashmere products in China also bears an unshirkable responsibility for desertification in northwest China, and the ecological deterioration in northwest China is becoming more and more serious.

as for the cost of controlling environmental pollution, it is even greater. The investment of 1-2 billion yuan per year offsets the achievements of economic development to a great extent. On the whole, if the environmental cost is included in the cost accounting, the trade cost of China is huge. In terms of comparative advantage, many of our export products are produced at a comparative disadvantage. In order to export more cheaply, we will not hesitate to destroy and pollute the ecological environment.

It is extremely urgent to increase the environmental cost in China. The state should formulate a series of legal protection measures, for example, not to implement export tax rebate for some products, and to reduce the export competitiveness of these products through tax policies and increase the environmental cost of such products. At present, China should carefully check the real costs of some export industries, such as silk, leather and agricultural products, and find back the missed environmental costs. Reasonable use of international resources through tariff adjustment. Eliminate those uncompetitive products in China through comparative advantage, and eliminate those export products that make a loss, and finally achieve the purpose of adjusting the industrial structure. This may affect the interests of some regions and departments on the surface and in time, but it is in line with the long-term survival and development of the Chinese nation.

generally speaking, China has not yet got rid of the export characteristics of developing countries, that is, relying on resources in exchange for technology and service products. This kind of trade is a kind of export to developing countries. At present, China's exports of marble, cement and pig iron are among the best in the world. Another characteristic of this trade is that there is price inequality between primary products and industrial products, and primary product countries should exchange more labor and resources for the products they need. If developing countries can't reverse this trade structure in time, the final result will be exhausted resources and weak trade. At present, this resource-based export has put some African countries in an unsustainable situation. In recent years, the export proportion of industrial products in China has been rising, and the proportion of processing trade has been large, but we should also pay attention to the cost of environment and resources.

Second, the comparison between ancient and modern mercantilism-face up to the cost of pursuing foreign exchange

The essence of mercantilism in European countries in the 17th and 18th centuries was to tighten belts and its purpose was to enrich Qiang Bing, but the main goal of monarchs' eyes was gold. Earn foreign gold through export. With gold, soldiers can be recruited and hired to fight wars. However, blindly hunting for gold, even in the period of heavy metal currency, mercantilism also has great risks. Because when there is more gold, the price of gold will also depreciate. When Spain imported a large amount of Latin American gold into Europe, gold depreciated sharply.

if an economy imports necessary goods and services while engaging in export trade, then export is beneficial to any economy. But if the export is only to accumulate gold or dollars, then this pursuit is extremely dangerous.

today's mercantilism in China has also become a mercantilism targeting the US dollar to a certain extent. In the 198s, foreign exchange earned was for import, but in the second half of the 199s, foreign exchange earned was more for resisting risks. The financial crisis created by western financial predators has brought extremely adverse effects to developing countries. In order to guard against and resist the western financial attacks, developing countries have to accumulate extra foreign exchange, which has caused the export and waste of their own resources to a certain extent and contributed to the "tribute economy" of western powers to a certain extent.

from this point of view, the risk of mercantilism in ancient and modern times is the same, that is, the depreciation of the target currency-gold or the dollar. The dollar is obviously overvalued today. Once devalued, the dollar wealth stored by developing countries will be wiped out. In particular, today's world has given up the gold standard and the use of heavy metal currency, so it is more dangerous to implement mercantilism under such a currency system with floating exchange rate. Therefore, the goal of traditional mercantilism must be changed, that is, from focusing on gold and dollars to paying attention to physical imports, and grasping physical wealth as much as possible instead of monetary wealth. The essence of attaching importance to import is to effectively use external resources and accelerate domestic economic construction, but this must increase domestic demand and be accompanied by RMB appreciation.

The ways to increase domestic demand are to increase the spending power of low-income people in addition to investing in treasury bonds. By reducing taxes and increasing the money supply, the living standards of the broad masses of the people can be rapidly improved, and domestic consumption can be appropriately increased by several percentage points. After 23, China's national debt investment should be transferred to human resources, that is, increasing the investment in public education and improving China's "soft power". It is necessary to properly correct the investment thinking of seeing things but not people in the past. Without the start of domestic demand, it will be difficult for China to change its long-standing export-oriented economy. However, in order to really start domestic demand, it is difficult to complete without a major change in the development strategy. Therefore, today we should have a thorough reflection on our understanding.

China needs balanced development, while China needs internal development. Due to the changes in the world economic situation, it is increasingly difficult for China to rely on exports to boost its economy. China must stimulate domestic demand through internal development. To this end, the central government should seriously consider the reduction and exemption of agricultural taxes and the compensation for farmers. Relying on external resources to develop the interior is the only way out for China in the future.

In particular, we should try our best to avoid split development and oppose luxury economy. The result of market economy competition will be polarization between the rich and the poor, and luxury consumption will appear as a result of polarization between the rich and the poor. China urgently needs to re-examine its external needs. Which external needs are caused by the inherent urban-rural dual structure, urban-rural polarization and the new polarization between the rich and the poor? How to adjust the import demand for foreign countries by adjusting the income distribution at home.

during the westernization movement in the Qing dynasty, the Qing court paid hundreds of thousands of peasants' labor and mountains of agricultural products in exchange for a warship in order to import a German armored ship. According to the price calculation at that time, the labor of hundreds of German shipbuilders was equivalent to that of more than 1, farmers in China. This trade is at the expense of a large number of resources. However, because buying a ship is a national defense need, although the price is extremely high, the Qing government also wants to buy it. During the development of China, there are many such import demands. We attribute this kind of import demand to development or national defense demand. Although this demand is extremely costly, it must sometimes be paid.

but today we have to avoid another demand, which is luxury demand. When some people get rich first, they will consume high-end western products. In order to import these expensive luxury goods, it is extremely unfavorable for developing countries to pay a lot of foreign exchange through the export of resources and labor. As a city with a serious urban-rural dual structure, China should be especially wary of this trade target and external demand.

generally speaking, any trade strategy is determined by the development goals of this country. If its development goal is to expand its troops and prepare for war, then all resources will inevitably gather in armaments in the end. If the target is high technology, some industrial sectors or coastal cities, then resources will inevitably gather in this field. If the goal is to improve people's living standards, reduce urban-rural differences and break the dual structure, the allocation of resources is different. Today, China will deeply examine his pursuit goals.

Third, realize the fact of "tribute economy"-China should balance import and export trade

At present, people regard American consumption as a contribution to the world economy, and the increase of China's exports is thanks to the large consumption of Americans. But we must also see the other side of the story, that is, the United States uses the US dollar and the strong US dollar to earn world resources and labor cheaply.

foreign research shows that the productivity of the United States has increased by 7% since 1974, but if the import effect is removed, the productivity growth of many departments is only between .1%. That is to say, except for the contribution of importing countries, the productivity growth in the United States is not large. In the last 2 years of the 2th century, the United States did not have any outstanding productivity prosperity, but there was an import prosperity. This prosperity is not driven by the amazing growth of the American economy, but by the debts lent to the United States by the low-income countries that produce these wealth.

under the mercantilism and gold standard, countries that accumulate trade surplus accumulate a lot of gold, which can be used to pay for future imports. However, under the current international trade system, the foreign trade surplus accumulates in the US dollar, a non-convertible currency with uncertain value in the future. Moreover, these dollar-denominated trade surpluses cannot be converted into the exporting country's own currency, because they need to be stored to prevent speculative attacks on the exporting country's currency in the global financial market.

When exporting countries invest their current account surplus in US dollar financial assets, the country's economy will not benefit from export because it exports more goods than imports. The country exchanged real wealth for a bunch of currency symbols. This foreign exchange reserve is valuable only if the country imports the same amount of goods to balance its trade. If exporting countries can't balance their trade, they must invest the trade surplus in American bonds. Today, more than 1 billion dollars of China's foreign exchange reserves are invested in US Treasury bonds, which has maintained the prosperity of the US economy and the glory of the world economy to a certain extent.

in the 199s, the Federal Reserve skillfully used the strong dollar and high interest rate to attract foreign funds and withdraw a large amount of dollars. Dollar hegemony can make the United States fight inflation by printing dollar bills, but it has led to the bubble of dollar debt. At present, with the change of the situation, the dollar bubble is bursting, and the trend of dollar depreciation has already appeared. China must take precautions and adjust its export-oriented development strategy as soon as possible.

because the trade imbalance is driven by overvalued currencies of importing countries and undervalued currencies of exporting countries, this unbalanced one-way mobile trade may end due to two results. One is that exporting countries have exhausted its resources and it is difficult to continue, and the other is that the trade deficit level of importing countries has reached an excessive level, and exporting countries are unwilling to accept the debts of importing countries. If this unbalanced trade continues, exporting countries will bear the consequences of environmental pollution, low wages, low welfare and growing poverty.

We should also be soberly aware of the fact that the US dollar coinage income. At present, in the foreign exchange reserves of countries around the world, the proportion of US dollars accounts for more than 6%. According to an investigation by the International Monetary Fund, in 1998, two-thirds of the cash issued by the United States circulated abroad, and about three-quarters of the newly issued US dollars were held by foreigners. In seven countries, the proportion of US dollar deposits in the money supply exceeded 5%, and in 12 countries, the proportion exceeded 3%-5%. As for the proportion between 15-2%, there are more countries. At present, China's dollar deposits have reached more than 13 billion, accounting for about 1% of the total currency.

The fact that the US dollar is used as a carrier currency has enabled the United States to obtain considerable coinage income, that is, the difference between the face value of paper money and the printing cost. It is estimated that the annual income from minting coins in the United States can account for 2.5% of its GDP, which is $2 billion to $3 billion. The United States not only gets the income from minting coins, but also gets the cheap goods exported by other countries in order to get dollars.

the annual economic growth in the United States is largely attributed to the sharp increase in imports. Emerging economies continue to devalue their currencies to subsidize and expand exports, thus repaying foreign debts marked in dollars, which makes dollar debts more expensive than local currencies. Cheap imports from the United States have eased the pressure of domestic inflation, although the total amount of money in the United States is expanding. Behind this activity, Americans get more goods with less labor costs.

Recently, the International Monetary Fund gave Brazil an unprecedented loan of $3 billion, the essence of which was to save American multinational banks that held Brazilian debts. This will force Brazil to export more wealth to repay the debt of $3 billion and its interest when its currency depreciates by 4%. This happened in Mexico and Indonesia. Every time the currencies of developing countries depreciate sharply, it is a huge loss of domestic resources.

At present, there is a point of view in western academic circles that deserves attention. This point of view holds that since global trade has transferred wealth from poor countries to rich countries for decades, this unequal trade transfer is unsustainable. At present, this wealth transfer is experiencing a crisis, as exemplified by the shrinking global trade in recent two years. This shrinking trade will lead to a slowdown in world economic growth. Those economies that rely on exports to maintain growth should clearly know that the decline in exports in recent years is not only a business cycle phenomenon, but also the result of years of unbalanced and unequal trade. In this case, only those countries whose exports become a supplement to domestic development, rather than a destruction, can be immune from the influence of the big environment. In view of this situation, China should pay special attention not to transfer its wealth out of the region, and should stop pursuing predatory competitive advantage and turn to balanced trade.

4. China should change from a lender to a borrower-RMB should appreciate appropriately

China is becoming a borrowing country, and the existence of a large trade surplus and foreign exchange reserves is essentially to export resources abroad. This is extremely unfavorable to developing countries. By the end of this year, China's foreign exchange reserves will reach nearly $3 billion. If this situation develops next year, foreign exchange reserves can reach 4 billion dollars quickly. Today, China's mercantilism echoes the "tribute economy" of western powers to some extent.

However, due to the changes in the international economic situation, the risks of foreign exchange reserves are increasingly apparent. The accumulation of China's foreign exchange reserves is essentially that China sells its domestic products and assets to the world in large quantities, and foreign exchange is obtained at the expense of selling RMB assets or labor. The increase of foreign exchange reserves means that the proportion of domestic assets decreases and that of other countries increases, which means that the foreign economic components in GDP increase. At a time when foreign exchange reserves are growing rapidly and foreign direct investment is entering in large quantities, it is a manifestation of the loss of domestic assets that RMB is still undervalued.

In particular, foreign exchange reserves are the monetary form of assets and wealth. Under the situation that the currencies of all countries in the world are constantly changing, it is extremely risky to master a large amount of monetary wealth. In 22, the dollar depreciated by 18% against the euro. Therefore, monetary wealth must be transformed into material wealth as much as possible. Meat is meat only when it is rotten in the pot.

Mercantilism will inevitably lead to RMB appreciation. Therefore, RMB appreciation will not