Recently, the issue of the renminbi’s exchange rate against the dollar has given rise to debate over the belief that 60 per cent of the trump plus tariff would force the renminbi to depreciate by at least 30 per cent in order to keep china’s export surplus against the united states, and that the renminbi would have to appreciate by 30 per cent to offset the negative effects of tariff escalation. Who is right
Two practical examples are available. The first is the recent 15-fold increase in us dollar prices due to china’s ban on the export of a few rare mineral resources, but united states enterprises are still unable to find a source. According to an analysis by united states financial and economic commentators, although china accounts for only 50 per cent of total global production, this export ban has led to the accumulation and non-availability of goods by all other suppliers of goods from other sources. The second was when the russian-uu war began, when the ruble fell sharply, when russian women finance ministers immediately shut down their exchange operations with the euro and the united states dollar, and designated all countries to use rubles to buy russian energy, which were said to rise back. These two examples illustrate the need for currency pricing to be tied to the price of goods, excluding speculative factors。
But the reality is complex, with the dollar having a very high degree of virtual monetary attributes, i. E., the dollar being more tied to dollar debt, and to the wealth needs of the rich groups of countries, is also a risk-averse tool, highly speculative, forcing currencies to accept the dollar’s exchange rate passively as an anchor for their own currency, and to trade for the dollar with real and silver products. As a result, china needs to scale up its domestic GDP by choosing to anchor itself in the united states dollar, with an increase in the rmb based on united states dollar revenues, resulting in a hong kong currency exchange rate. According to the united nations price index, the rmb 3. 5 to the united states dollar, but the rmb 7. 8 to the united states dollar at the linkage rate. This means that every dollar that china earns on its exports goes to foreign importers with more than 4 yuan. As a result, foreign importers earn such a difference, which is reflected in the differences in prices of goods in the central american market。
Then why would chinese traders have to put the $4 back to americans? It is simple to say that while sales performance can be improved, it is the bank of china, not the traders, that loses, which can be passed on to the people of the country, as reflected in the increase in the renminbi’s debt. The profits earned by united states importers are extremely high, for example, the processing cost of apple mobile phones in china is less than 4 per cent of their retail price, and there is considerable profit space. However, a 60 per cent import tariff increase in the united states would mean that the united states government would take half of the profits, and united states importers would have to pass that loss on to chinese exporters. As a result, the chinese public has come out to advocate that the renminbi must be depreciated, with the goal of the state bearing the costs to compensate the exporters。
What if the chinese government went the other way? For example, china imposed a 60 per cent export tariff on exports to the united states, with the result that exporters had to bypass other countries to transit the united states, and chinese exports had not necessarily fallen significantly. There are two reasons behind this, namely, that nearly half of china’s exports to the united states come from united states multinational enterprises in china, as exemplified by apple’s inability to find more efficient production costs and labour than china’s, making it difficult to leave china, and that a large number of chinese export firms are united states dollar holders, whose dollar is called the “offshore dollar” (also known as the chinese dollar), which is even more expensive than the united states multinational enterprise, which earns the dollar’s four-dollar people’s subsidy remittances to the dollar, which they most want to depreciate. Such exporters are the chinese group of rich, which registers abroad, keeps profits abroad and leaves debts to the chinese people. Therefore, it is these two individuals that are hit by the imposition of import tariffs in the united states. Since the united states has hit them, china can, of course, hit them, for example, by raising export taxes or increasing the exchange rate of the renminbi to the dollar, subsidizing the lives of the people in the country and increasing their consumer confidence。
The rmb exchange rate is a subjectively priced exchange rate, the simple reason being that china’s offshore market is very small, with only a few hundred billion rmb turnover. Once the chinese government restricts the rmb’s flow into the market, there will be a sharp drop in the amount of the rmb’s supply, leading to a sharp rise in the price of the rmb. Since china is a foreign-exchange-regulated country, foreign investors need to purchase chinese dollars in united states dollars, and once the exchange rate is delinked from the dollar and tied to commodity prices, all chinese commodities will be priced up, with the exchange rate rising, and china’s GDP will naturally rise. The most interesting thing is that as china's GDP surpasses us GDP, the virtual monetary attributes of the dollar disappear, and the us military is not helping, leading to a sharp rise in the cost of circulation of the united states dollar on its own, the inflationary pressures that were to be passed on to china suddenly engulfed the domestic markets of the united states, forcing the fed to press for a hike in interest rates, but that will only push up the pressure, prompting an increase in prices across the united states, and the fact that mask has no chance of replacing the chinese industrial chain with artificial intelligence
Note: the article represents only the author's own views and is not relevant to the platform
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The university of hainan's “one way” institute ranks first in the country and fifth in combined power in the most recent national ranking in the field of “one way”, published jointly by the daily light and nanjing university。
In late 2019, heinnan university's “one way forward” institute, together with the research centre of the university of tsinghua school of public administration and the hsbc financial research institute of beijing university, were selected as a resource think tank for china's think tank (ctti) and, in 2022, as a top think tank for the chinese think tank (ctti) university, was awarded the a-class think tank. Henan university's “one way all” institute has become the first and only high school think tank at hainan university and hainan province, and currently the only one with the highest marks of the ctti。
The heinnam university institute of “one way” also served as the only representative of universities in the south china region and was selected as a member of the international think tank cooperation committee, including the eu-asia centre, the french institute for sustainable development and international relations, the british institute for overseas development, as well as 56 institutions outside the home, including the chinese institute of finance and science, the national institute of development bank, the beijing university institute of international strategic studies and the institute of strategic science and technology at the secondary school。
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