1, short-term consequences
If China's RMB exchange rate depreciates, it will trigger a new round of currency devaluation to enhance competitiveness, which will not only make the Asian economic recovery in the foreseeable future, but may even trigger a financial crisis again. The devaluation of currencies in other Asian countries is forced and the product of the crisis. Judging from the situation after currency devaluation, it seems that currency devaluation has not brought much benefit to countries. The four ASEAN countries are highly dependent on exports. For example, the import dependence of Indonesia's exports is 60%, and the import dependence of Thailand's exports is also 42%, that is, the export expansion brought about by depreciation is offset by the increase in import costs. In addition, the export products of South Korea and Taiwan Province Province generally have high technology and capital content, so the depreciation of Korean won and new Taiwan dollar has little impact on China's exports. Therefore, the reason why China's export growth rate may decline is not the devaluation of Asian currencies, but the economic recession of Asian countries, which account for a large proportion of China's exports, the shrinking market demand and the reduced export absorption capacity of China. Once China's RMB depreciates, it will obviously enhance China's export competitiveness and increase the pressure of Asian countries' economic recovery. In addition, from the perspective of international public opinion, it will be detrimental to China. China's renminbi has not depreciated, which is widely regarded as China's contribution to Asia, preventing the further spread of the crisis. Once the RMB depreciates, public opinion will be another argument, arguing that China's devaluation is an active and deliberate act, aiming at engaging in beggar-thy-neighbor exchange rate policy, intensifying vicious competition among Asian countries, and may trigger a new round of currency devaluation and deepen the disaster.
2. Interim consequences
The depreciation of RMB will cast a shadow over Sino-US economic and political relations. China's trade surplus with the United States is close to that of Japan, which intensifies the trade friction between China and the United States. If the RMB depreciates, it will make China's export situation to the United States more favorable. At present, because of the depreciation of Asian currencies, it is more difficult for American exports with strong local currencies, which is quite verbose in the United States. If China's currency depreciates again, the trade friction between China and the United States will be further aggravated, which will not only be detrimental to the improvement of Sino-US relations, but also increase the resistance of the United States, a key country in China's application to join the World Trade Organization, to China.
3. The devaluation of RMB will cause the collapse of confidence.
Many experts believe that the essence of the Asian financial crisis is a "crisis of confidence". The stability of China's RMB has given western countries some confidence in the Asian economy. At least there is no crisis in China. With China's huge domestic demand market, it can absorb a certain amount of exports from crisis countries and help its economy out of the predicament. Once the RMB depreciates, not only the Asian people will panic, but also the United States may have a panic of confidence. Because the RMB didn't depreciate, the impact of the Asian crisis was blocked on the border of China. If China abandons the RMB stabilization policy, the responsibility for preventing the crisis will be mainly borne by the United States. If the United States does not assume this responsibility, the Asian crisis may spread to the whole world. Therefore, the stability of RMB is essentially a key issue, that is, was the Asian financial crisis digested by China in 1998 and ended there, or was it transferred out and developed into a worldwide economic depression? In addition, confidence in Asia mainly depends on the United States, and the International Monetary Fund is also mainly manipulated by the United States. Under the condition that the RMB does not depreciate, the United States hopes that the Asian economy is expected to come out of the trough, driven by China's economy. Once the RMB depreciates, Asia will be wiped out, and the ultimate confidence of the United States in the Asian economy will also be shaken, which is of no benefit to attracting foreign investment to help the Asian economic recovery.
4. RMB depreciation will aggravate the pressure on Hong Kong dollar.
As the financial crisis spread to other Asian countries, the linked exchange rate system of the Hong Kong dollar was hit. Short-term interest rates rose sharply, and the stock market and real estate fell sharply. The devaluation of RMB will further isolate the Hong Kong dollar from the market psychology, which will have a negative impact on maintaining the exchange rate system of the Hong Kong dollar and maintaining the financial stability and economic stability of the Hong Kong Special Administrative Region.
Benefits of RMB depreciation
First of all, investment has the greatest pulling effect on economic growth. Since 1998, in order to cope with the impact of the Asian financial crisis, the China government has decisively adopted an expansionary fiscal policy, issuing 660 billion treasury bonds in the past five years, and the government's direct investment has boosted economic growth by 1.5 to 2 percentage points every year. At the same time, in 2002, the growth rate of China's private investment reached 18%, twice the growth rate of the same period last year, and the proportion of private investment has gradually approached that of state-owned investment. The total contribution of private investment to economic growth has also exceeded half.
Secondly, when the global high-tech bubble bursts and the global economy enters a trough, China with stable politics, prosperous economy and abundant labor supply will be favored by international capital, because it is the instinct of capital to avoid risks and pursue profits. From then on, it is not difficult to understand why China attracted 52.7 billion US dollars of foreign investment last year, surpassing the United States to become the country attracting the most international investment.
Third, in the context of the continuous decline of the national consumer price index, the consumption of real estate and related products such as decoration and furniture accompanied by the housing system reform has played a decisive role in promoting economic growth.
Fourth, even if we discuss the factors that promote export growth, we can't deny the non-exchange rate reasons, especially the role of China's export tax rebate policy in export growth. The average export tax rebate rate of 15% has played a very important role in China's trade surplus for several consecutive years. Although the export tax rebate does not violate international trade practices and WTO principles, the problems in its implementation have not been solved for a long time, which not only stimulated exports, but also distorted the real exchange rate level of RMB, causing many negative effects on the domestic economy and attracting more and more foreign calls for RMB appreciation.
RMB depreciation can kill many birds with one stone.
Since the beginning of this year, the Bank of China has continuously sent out new messages: China's consistent "prudent monetary policy" in the past five years will be injected with more and more "positive" connotations. Statistics show that from 1997 to 200 1 year, the average annual growth rates of M2 and m/kloc-0 are 14.8% and 1.45%, respectively, which is 5 percentage points higher than the sum of economic growth and price growth in the same period. From this point alone, it is difficult to assert that the money supply is insufficient. However, it is an indisputable fact that the consumer price index has dropped. More and more facts show that under the condition of modern market economy, linking the monetary control target with the sum of GDP growth and price changes can no longer fully reflect the real situation of funds needed for economic operation. In addition, people's worries about the uncertainty of the future lead to the ideological tendency of saving against change, which makes it difficult for the policy of increasing money supply to achieve the expected results.
With the gradual weakness of the proactive fiscal policy, it has become the consensus of all parties to fade out in time. Monetary policy, which has been in a "supporting role" for a long time, should respond in time, become a "protagonist" as soon as possible, and play a role at the same time as the adjusted fiscal policy. The general policy tendency should be to relax monetary policy and tolerate moderate inflation rate on the premise of ensuring economic growth.
Within the framework of WTO, the opening of RMB capital account promised by China is not far off. Within the time limit allowed by the rules, the policy depreciation of RMB will achieve the effect of "killing many birds with one stone".
First of all, it can raise people's expectations of inflation and stimulate domestic consumption. Because after the proactive fiscal policy fades out, the intensity of investment will weaken and the contribution rate of investment to economic growth will decrease; Nor should we expect too much from the contribution of exports; In China's future economic development, the most potential is domestic consumption, and the depreciation of the local currency can stimulate consumption, thus promoting economic growth. However, at the same time of RMB depreciation, we must give full play to the transfer payment function of finance, ensure the basic living standard of the low-income class and minimize the impact of inflation on the life of the low-income class.
Secondly, it can maintain the competitiveness of China's goods in the international market. At the same time, if the policy of canceling or reducing export tax rebate can be introduced in time, it can not only alleviate the appreciation pressure exerted by foreign countries on the RMB, but also achieve the purpose of loosening the financial system.
Third, adjust the income distribution structure of different strata in China and increase the income of vulnerable groups. China is open to the outside world in all directions, and its dependence on foreign trade is over 45%. Changes in the exchange rate will affect everyone's interests. However, the impact of exchange rate changes on different interest groups is different. Farmers and workers who produce labor-intensive products are the vulnerable groups in China society at present. The devaluation of RMB can not only improve the international competitiveness of China's agricultural products and labor-intensive products, but also expand the employment opportunities and income of vulnerable groups and resist the impact of China's entry into WTO.
Fourth, open up a broader operating space for fiscal and financial policies. Compared with deflation, moderate inflation can not only provide more effective space for the central bank's monetary policy tools, but also make more room for the use of fiscal policy. For example, the financial resources saved by the cancellation of export tax rebate can be used to develop compulsory education, raise the salary of civil servants and subsidize vulnerable groups.
Fifth, open up energy for future RMB capital projects. In recent years, due to the outstanding performance of China's economy, remarkable achievements have been made in enhancing national confidence and national pride. However, we should also see that some people's arrogance has also been exposed. Some people only see that the comprehensive national strength and the overall economic scale are in the forefront of the world, while ignoring the per capita economic indicators. As we all know, the economic aggregate of China's population of nearly 65.438+0.3 billion is only 65.438+0.4 of that of Japanese population of 65.438+0.26 billion and 65.438+0.8 of that of American population of 280 million, so there is no proud capital. Although the devaluation of RMB will reduce the global share of domestic economy denominated in US dollars, it can avoid the sharp edge of attention of all countries and save energy for the future RMB open capital projects, which can be described as "hiding its light and hiding its time".
To sum up, the RMB is now at a very sensitive juncture, which needs to be taken seriously from the perspective of domestic economy and international trade. After China's entry into WTO, China can't completely ignore foreign voices, but it can't lose itself and be pushed around in international economic exchanges. How to deal with the RMB exchange rate at present is not so much an economic decision as a political decision. In order to respond to the appeals of various countries and curb China's export growth, the author thinks that instead of keeping the RMB exchange rate unchanged, it is better to reduce or completely cancel the export tax rebate. After scientifically measuring the effect of export tax rebate and part of the influence of "fake export and real tax fraud", the RMB should have at least 5%- 10% depreciation space on the premise of canceling export tax rebate. I suggest that the Chinese government take advantage of the fact that the RMB has not been fully marketized, make full use of the asset management function of the central bank, choose an appropriate opportunity to depress the value of the RMB, make full use of the guiding role of the central bank's open market operation, and truly play the role of "killing many birds with one stone" in exchange rate policy.