Second, it will affect China's exports to European countries. Although China's exports to Greece, Spain and other countries are small, the price competitiveness of China's products exported to Europe will decrease due to the sharp appreciation of RMB. If export enterprises collect foreign exchange in euros and pounds, they will face greater exchange rate risks. In addition, due to the devaluation of European currencies, EU exports to China will increase, and China's poverty surplus may also decrease.
Third, with the appreciation of RMB against non-American currencies, speculative capital inflows may increase. In fact, before, we were concerned about the expectation of RMB appreciation against the US dollar, the speculative capital inflow from the US dollar betting on RMB appreciation, and the inflow of "hot money" into Linga. However, the author believes that the RMB is now appreciating against the euro and the pound, and the inflow of speculative capital from the euro and the pound can also benefit from the appreciation of the RMB. Therefore, to prevent the inflow of hot money, we should not only pay attention to the inflow of dollar assets, but also prevent the inflow of assets such as euros and pounds.
The fourth is the shrinking of foreign exchange reserves. Although it is not clear how high the proportion of euro and pound assets in China's foreign exchange assets is, the depreciation of euro and pound will shrink the foreign exchange reserves denominated in dollars. Recently, the State Administration of Foreign Exchange denied the foreign news report that "China Administration of Foreign Exchange is evaluating its Eurobonds" and expressed its confidence in overcoming the debt crisis in Europe, which is also a kind of support for the euro currency. However, the author believes that China must adopt a dynamic asset management model to prevent foreign exchange assets from shrinking. The timely management of foreign exchange assets needs to pay attention not only to the return on investment, but also to the changes in asset value brought about by exchange rate changes to ensure the preservation and appreciation of foreign exchange assets.
Fifth, the European debt crisis affects the global economic recovery process, and has a great impact on China's external demand and macroeconomic policy withdrawal. Although Greece, Spain and other "European Pig Five" countries have little economic influence in Europe, at present, the crisis has affected the pace of economic recovery in other European countries. Second, EU countries not only put forward huge aid plans, but also tightened their belts to reduce fiscal deficits. The European debt crisis has increased the uncertainty of global economic recovery, and the economic recovery of European countries will face greater challenges. The EU is China's largest trading partner, and domestic and foreign demand will continue to be under pressure in the short term.
And the enlightenment to us is mainly:
(a) The measurement of sovereign debt should include the "hidden debt" part.
Reinhardt and Rogoff (2008) comprehensively and clearly described the importance of "implicit debt" from the two-century history of sovereign debt default in 70 countries-the government often has implicit debt much higher than the record level. In Winkler's (1933) classic research on foreign debt, the problem of implicit debt has been mentioned.
The People's Bank of China pointed out in the Financial Stability Report of China (20 1 1): "The debt level of government departments is low, but the problem of hidden liabilities deserves attention". Among them, the invisible liabilities of government departments are relatively large, which can be analyzed from the central and local dimensions. From the central point of view, hidden debt mainly includes * * * management funds formed in the process of reform of large financial institutions; Some policy or quasi-policy financial institutions have issued a large number of bonds, and some departments that do not distinguish between government and enterprises are heavily in debt. At the same time, there are also gaps in social security such as medical care and old-age care.
The second dimension of invisible debt is local government. According to the report of the central bank, in 20 10, loans from local financing platforms continued to grow rapidly, and the loan balance still accounted for a high proportion of general loans in the same period. The operation of some local financing platforms is not standardized enough, and the possibility of losses increases under the background of accelerating economic restructuring. In addition, the debts of local governments in social security funds and housing accumulation funds, as well as hidden debts such as township debts, have increased financial risks.
In addition, the central bank also emphasized the real estate credit risk. According to the data of the central bank, by the end of 20 10, the balance of real estate loans of major financial institutions was 9.35 trillion yuan, up 27.5% year-on-year, and the growth rate exceeded the growth rate of various loan balances by 7.6 percentage points. The balance of real estate loans accounted for 20.5% of the total loan balance, an increase of 1.3 percentage points over the end of last year. The annual real estate loans increased by 2.02 trillion yuan, accounting for 27.4% of the new loans.
(b) The impact cycle of the sovereign debt crisis is short.
The evolution of previous sovereign debt crises shows that the impact of sovereign debt crises on the macro-economy is characterized by a short period: using the data from 1972 to 2000, the IMF found that the borrowing cost of sovereign debt rose by 4% on average in the first year after default, while the extra cost would drop to 2.5% in the second year, and the spread of sovereign debt could basically fall back to the pre-default level after two years of default.
(c) The success of the restructuring process is crucial to the sovereign debt crisis.
From the perspective of economic growth rate, the average GDP growth rate of sovereign debt defaulting countries in the process of debt restructuring is lower than that of sovereign debt defaulting countries (other similar situations) 1.2%, but this phenomenon is also concentrated in the first year after default. Countries that have failed to restructure their defaulted debts smoothly have been hit harder than those that have successfully restructured. According to the research results of the Bank of England, the GDP loss of countries that failed to reach a restructuring agreement with creditors is three times that of countries with successful debt restructuring-successful restructuring generally means that creditors have obtained satisfactory compensation or commitment.
The involvement of sovereign defaulting countries in other countries in the region is obvious: after the debt crisis in emerging markets broke out in the 1980s, the credit of the whole developing countries plummeted, including sovereign economies that did not default. At present, the sovereign debt crisis in Europe has also spread to major economic countries, and investors' worries about the debt problem of the whole European economy have led to violent shocks in the capital markets of many countries.
(d) Fiscal discipline is essential.
Expansionary fiscal policy not only has limited effect, but also financial imbalance will undermine the stability of financial markets through the real economy, financial markets and financial institutions.
First of all, a large number of treasury bonds will lead to an increase in interest rates, which will have a net "crowding out effect" on private investment, thus reducing the multiplier effect of fiscal expenditure.
Second, using national debt to make up the fiscal deficit will make people doubt the long-term prospects of economic growth, and Ricardo equivalence will play a role. Rational people will realize that using national debt to make up the deficit is to transfer the current difficulties to the next period. In order to cope with the overpayment of taxes in the next period, people will reduce consumption and increase savings in the current period, thus invalidating the policy.
Third, the higher issuance of government bonds caused by higher deficit means higher interest payments, people will have doubts about fiscal sustainability, and investors will demand higher risk discounts to compensate for the increasingly serious credit risk. The rise of risk premium will increase the financing cost of financial institutions and many private sectors, thus affecting the effective operation of financial markets.
(5) Throttling, adjusting the structure and turning mode are urgent.
European countries have been forced to start slashing spending and making plans to cut their fiscal deficits. Some countries are planning to raise the retirement age and cancel some benefits. However, a simple and comprehensive austerity policy is not enough to get out of the crisis, and it can only temporarily appease the tense international financial market. Excessive spending cuts will significantly curb demand and easily reverse the hard-won recovery momentum. Moreover, a large part of the deficit generated by the government is due to the rescue of financial institutions, but now it is simply to make up for it by cutting the welfare of the whole people, which is also unpopular politically. Successive strikes will in turn drag down the economic recovery. The Argentine President recently warned that the economic austerity policy adopted by the Greek government in response to the debt crisis is repeating the mistakes of the Argentine financial crisis. At that time, the Argentine government agreed to a similar economic austerity plan in order to obtain loan assistance from the International Monetary Fund, but the final result was economic recession and social unrest in Argentina.
To get out of the crisis and achieve sustained recovery, we should not only restore the balance between supply and demand through the government's stimulus policies and cultivate new economic growth points, but also create more employment opportunities through a series of positive adjustments and reforms, so that the income distribution tends to be reasonable. To this end, we must realize structural adjustment and the transformation of development mode. In this regard, some Nordic countries have done relatively successfully. Nordic countries such as Denmark actively reformed the social welfare system. For example, their unemployment assistance system focuses on the re-employment of unemployed people, which not only increases the flexibility of employers' employment, but also provides certain protection and related training for workers, so that they can prepare for new jobs, not just provide living security. The medical insurance reform implemented in the United States and the financial supervision reform plan to be adopted soon also show that the transformation of the development mode in the United States is also difficult to advance. It is commendable that among the major economies in the world, China has reached the clearest understanding of the transformation of development mode.
(6) Improve debt transparency and establish normal channels to release financial risks.
The first is to improve debt transparency. At present, the scale of bank credit is tightening, and many local governments are facing the risk of capital cut-off, which seriously affects their solvency. Therefore, we should establish an open and transparent balance sheet, clarify the real situation of local government debt through auditing, make hidden risks explicit through information disclosure, and provide a basic basis for preventing and resolving debt risks.
The second is to establish normal financial risk release channels. No crisis broke out in a day. Local risks gradually accumulate to form system risks, and the crisis will only occur when the system risks deteriorate. China should establish a normal risk release channel from the perspective of resolving financial risks for a long time. For example, we can consider making full use of the bond market, diversifying the government's sources of funds, restraining the government's lending behavior through market-oriented means, and then dispersing risks.