Effects of RMB appreciationPositive effects:
1. Favorable to China's imports
2. Decrease in the cost of raw material import-dependent manufacturers
3. Strengthening of the ability of domestic enterprises to invest abroad
4. Increase in the profitability of foreign-invested enterprises in China
5. Favorable for talents to go abroad for study and training
6, Foreign debt servicing pressure to reduce
7, China's assets to sell more cost-effective
8, China's GDP international status
9, increase national tax revenues
10, China's people to enhance the international purchasing power
Negative impact of the appreciation of the yuan:
1, the yuan is not convertible under the capital account, which means that the mechanism for determining the exchange rate is not the market, but the market. That is to say that the mechanism for determining the exchange rate is not the market, there is no point in changing
2, the appreciation of the yuan will bring more pressure on China's deflation
3, the appreciation of the yuan exchange rate will lead to a decline in the attractiveness of foreign capital, reducing foreign direct investment in China
4, China's foreign exports caused great harm
5, the yuan Exchange rate appreciation will reduce the profitability of Chinese enterprises and increase employment pressure
6, the fiscal deficit will increase due to the appreciation of the RMB exchange rate, while affecting the stability of monetary policy
Effects of RMB depreciation:
In terms of the RMB depreciation itself, it will lead to a shrinkage of the value of domestic assets, which may adversely affect real estate and other properties. Favorable economic transformation. The depreciation of the yuan will increase exports and competitiveness, which is conducive to easing domestic deflationary expectations due to lack of demand.
In addition, the depreciation of the yuan, so that the international speculative capital that is hot money arbitrage behavior significantly convergence, so that it sells the yuan and related assets after the resale of the dollar and other assets, so that the domestic investment and other declines in the previous need for a large number of money to reduce the number of investment projects, the use of the money to reduce the place of the loan is also reduced, the liquidity of the market is also more, the interest rate is also lowered, and the cost of financing of the real economy is also Reduced. Reduced investment improves overcapacity and reduces the ever-increasing debt burden, and the reduced demand for funds helps increase domestic liquidity.
Expanded content:What is RMB appreciation? The appreciation of the yuan in the most common terms is that the purchasing power of the yuan increased, prices rise with it easy inflation.
That is to say, before the appreciation of the yuan you can use a dollar for 8 yuan, after the appreciation of the yuan can now only change 6.12 yuan, that is to say, you need to use 8 yuan before to buy a dollar of things, and now need to use 6.12 yuan can buy a dollar of things, the people's pockets will be more valuable money, travel abroad, buy imported luxury goods will be cheaper.
Because the appreciation of the yuan will inhibit our exports. And our main export object is the United States. And in recent years the United States belongs to the trade deficit. Appreciation will slow down this situation. Relatively speaking, the rise in the value of our currency will stimulate foreign imports into China.
After the appreciation of the yuan, from a macroeconomic point of view, the cost of direct investment in China will increase, foreign investors will reduce investment in China, foreign tourists will reduce travel and consumption in China, while a large influx of imported goods into the domestic market will lead to the need to re-adjust some of the domestic enterprises, and many people may be unemployed as a result.
What is yuan devaluation? The devaluation of the yuan refers to the rate at which one country's currency is exchanged for another's, the exchange rate, which many people confuse with what we usually call whether money is "worth" money. Both are indicators of the level of purchasing power of a country's currency, but the former is for the purchasing power of international trade, and the latter is actually a measure of the level of inflation in a country, for the purchasing power of domestic goods.
First you need to get this concept right. Appreciation of the yuan, that is, the yuan for other currencies exchange rate increased, for example, the original 1 U.S. dollar for more than 8 yuan, now 1 U.S. dollar for more than 6 yuan, that is, the yuan appreciated, the yuan depreciation of the meaning of just the opposite. In addition, one more point, now the exchange rate is generally used indirectly, that is, a unit of foreign currency can be exchanged for how many units of local currency, only the British pound using the direct method of valuation, that is, a unit of pounds can be exchanged for how many units of foreign currency.
Of course, the yuan exchange rate using indirect valuation method. It should be noted that, simply say "exchange rate appreciation", then whether the local currency appreciation or depreciation, we must pay attention to see the use of the kind of valuation method, if the specified is a currency appreciation (such as the yuan), it is clear that the currency of the foreign currency rate rise.