(a) the appreciation of the yuan on the positive impact of China's foreign trade
1. conducive to the reduction of the cost of imports
The appreciation of the yuan, foreign energy, raw materials and means of production prices are relatively cheaper, which reduces China's introduction of foreign advanced technology, equipment, and a lot of important strategic materials to purchase the cost of strengthening purchasing power. The cost of purchasing power has been enhanced. In China, the import dependence of the industry is higher mainly oil, natural gas, aviation, power equipment, etc., the appreciation of the RMB will make the bulk of the transaction to reduce the cost of imports, which in turn enhance the profitability of the relevant industry sectors, and improve the competitiveness of the product.
For a long time, China has been implementing the "big in, big out, two out" strategy of export-oriented economic development. The total amount of processing trade exceeds the amount of general trade, processing trade surplus has become the most important source of China's foreign trade surplus. Processing trade products in the cost of exporting the proportion of its import costs are generally between 50% ~ 100%, in the short term on the price of imported goods is more sensitive. If the appreciation of the renminbi, the local currency price of imported goods is reduced, which leads to a reduction in the production costs of processing trade, naturally, the processing trade way of exporting goods in foreign currency prices, therefore, this part of the reexport of imported raw materials dependent on the re-export of goods still have a certain degree of international competitiveness. It can be seen that the appreciation of the RMB will promote the increase of imports, and imports to drive exports, and its correlation has been strengthened.
2. Help to promote the optimization and upgrading of trade structure
For a long time, China's foreign trade is "heavy exports, light imports" as the main feature of the export-oriented strategy, the implementation of this strategy to promote China's economic growth in the process has played a huge role, but at the same time also produced a high degree of dependence on exports. But at the same time, it has also produced a high degree of dependence on exports, which not only exposes China's economic growth and employment to potential risks, but also produces enterprises relying excessively on the price advantage of cheap labor to export, and unilateral trade surpluses caused by frequent anti-dumping lawsuits in other countries; low-cost, labor-intensive export industries, low market access caused by investment in oversupply of enterprises resulting in low-priced vicious competition; as well as focusing only on price, without paying attention to the needs of the international market, resulting in the export trade and import demand. The export trade and employment are vulnerable to fluctuations in the international economic situation and a series of problems and contradictions caused by the sole emphasis on price without paying attention to the demand of the international market. It can be seen that this foreign trade structure, which has long relied on a single growth in exports, is very unreasonable. The appreciation of the RMB will inevitably cause a certain degree of export reduction and import increase, which can change the imbalance of China's import and export trade structure.
In our country, foreign trade growth mode mainly rely on the export of labor-intensive products, while the real embodiment of the technical level and factor content of high-tech equipment and intermediate inputs and other factors of production to be imported from abroad, resulting in low economic efficiency. Appreciation of the RMB will motivate export enterprises to rely more on technological progress and improve value-added, rather than low-priced competition to capture the market. Appreciation of the RMB will make part of the low-cost competition, low technology content, high pollution, high energy consumption of enterprises are squeezed out of the market. In the long run, the appreciation of the RMB will help China's foreign trade growth from the original crude to high-quality and high efficiency intensive, which will bring the improvement of the export structure, which is in line with the development direction of China's industrial structure transformation. At the same time, the appreciation of the RMB will cause more intense competition in the industry, which will motivate enterprises to improve their international competitiveness through independent research and development and technological innovation. It can be seen that the appreciation of RMB is of great significance in promoting the optimization and upgrading of China's foreign trade structure, stimulating independent innovation of domestic enterprises and achieving sustainable development.
3. It is conducive to easing trade friction
According to the latest data released by China's General Administration of Customs (GAC), China's foreign trade surplus in 2007 reached a record high of 262.2 billion U.S. dollars, an increase of 47.7% over the 177.47 billion U.S. dollars in 2006, ranking first in the world. China's total foreign trade exceeded the 2 trillion dollar mark for the first time, reaching 2,173.8 billion dollars, an increase of 23.5% from 2006. Exports amounted to US$1,218 billion, an increase of 25.7% over the previous year, while imports amounted to US$955.8 billion, an increase of 20.8% over the previous year. According to the statistics of China's General Administration of Customs, since joining the WTO at the end of 2001, China's foreign trade has been growing at a rate of more than 20% for six consecutive years, and the total value of foreign trade in 2007 was 4.26 times higher than the total value in 2001. However, the growth rate of China's foreign trade surplus has far exceeded the growth rate of the total value of trade, and the trade surplus in 2007 was 11.6 times higher than that in 2001. The rapid growth of foreign trade surplus has aggravated the trade friction between China and its major trading partners such as the European Union and the United States. The European Union has repeatedly stated in 2007 that it hopes China will accelerate the pace of RMB appreciation in order to reduce the trade surplus between China and the EU; and the US Congress proposed more than 50 trade protection bills against China in 2007, although most of these bills failed to become law due to the opposition of the US government, which still increased the tension in the trade relations between the two countries.
The appreciation of the RMB can increase the total amount of China's imports, which is conducive to reducing the value of the trade surplus. By appreciating the yuan and appropriately raising the foreign currency price of exports, it helps to reduce low price dumping lawsuits by other countries against our products. Low-price bidding and exports are suppressed, slowing down exports and increasing imports, which is conducive to weakening the momentum of China's expanding trade surplus and reducing the excuses for some trading partners to carry out protectionist trade attacks on China. Appropriate appreciation of the renminbi will help ease the relationship between China and its major trading partners, reduce economic and trade disputes, promote the harmonious development of China's economy and trade, and create and maintain a smoother trade environment.
4. In favor of improving the terms of trade
In international economics, the terms of trade = export price index / import price index, the improvement of the terms of trade means that the same amount of goods exports can be exchanged for more imports. Although China's annual trade surplus is large, but due to the continuous decline in the price of export commodities led to the continued deterioration of the terms of trade, the need to export a large number of labor-intensive products in exchange for a small number of foreign high-tech products or scarce resources. After the appreciation of the RMB, the price of export products has relatively increased, so that a smaller number of export products can be exchanged for a variety of products needed by the country. Increasing export profits will improve our current terms of trade. At the same time, the appreciation of the RMB will also reduce the price of imported products, especially the price of raw materials and high-tech equipment. Enterprises will accelerate the introduction of technology, improve production efficiency and realize the dynamic comparative upgrading of products. At the same time, because the vast majority of imported products for re-export, so with the increase in productivity, export product quality has been improved to help our enterprises from the low end of the product industry chain to the middle and high end of the extension, so that the terms of trade has been improved.
5. Favor Chinese enterprises to "go out"
The appreciation of the RMB means that the cost of Chinese enterprises to invest overseas is relatively lower than before, which makes them able to invest in foreign factories and engage in cross-border operations at a lower cost. According to the location advantage of the investment place to make full use of the global resources, reduce production and transaction costs, realize the economy of scale, and establish a global production and marketing network. Therefore, the appreciation of the renminbi is conducive to those strong Chinese enterprises to "go out", to achieve its global development strategy, creating China's real international competitiveness of multinational corporations.
The negative impact of RMB appreciation on China's foreign trade
1. weaken the international competitiveness of China's exports, not conducive to the growth of China's exports
The appreciation of the RMB will increase the price of China's exports in foreign currencies, which will directly weaken China's exports of the price of the competitive advantage. After the appreciation of the renminbi, export enterprises in order to maintain a certain level of profit, must increase the sales price of goods in foreign markets, and the consequences of doing so will inevitably weaken the international competitiveness of China's exports, is not conducive to the continued expansion of exports and the increase in the share of the international market; in particular, China's exports are mainly labor-intensive commodities are mainly, the scientific and technological content and value-added is relatively low, once you raise the price of exports in the In particular, China's exports are mainly labor-intensive commodities with low technological content and value-added, and once the price of export commodities in foreign markets is raised, it will result in the loss of the low-price advantage of these low-end products, which can be easily replaced by some Southeast Asian countries, thus affecting the expansion of the export scale. However, if the international market price of export commodities remain unchanged, it is bound to squeeze the profit margins of export enterprises, the reduction of export profits will be a serious blow to the enthusiasm of domestic export enterprises, resulting in a reduction in the number of exports, to a certain extent, will have an impact on China's foreign trade exports. However, the impact of RMB appreciation on China's exports is limited, because it is also subject to a number of other external factors, such as the domestic and foreign economic situation, the structure of export commodities and trade patterns.
2. Serious impact on export industries with lower technological content and low prices
Obviously, export industries with excessive dependence on export trade, lower export price elasticity and lower technological content will be subjected to a greater impact in the process of RMB appreciation, and if they are not prepared to deal with it ahead of time, they may even be eliminated in the fierce competition in the market. China's textile, clothing, home appliances, chemical, electronic machinery manufacturing and other major export-oriented industries belong to this type, of which the textile and clothing industry's dependence on export trade is as high as 50%, value-added and export price elasticity is very small, and therefore subject to the greatest impact of the appreciation of the RMB. According to public information, every 1% appreciation of the RMB, cotton textile, woolen textile, clothing industry profit margins will fall by 3.19%, 2.27% and 6.18% respectively. Take the clothing industry as an example, at present the vast majority of foreign trade clothing orders in the gross profit of 0.5 yuan, that is, the export of 1 U.S. dollar products, gross profit in 0.5 yuan. If the RMB appreciates slightly by 2% against the US dollar, it means that foreign trade enterprises will lose 0.15 RMB in gross profit for every 1 USD exported. Visible, accelerate the optimization and upgrading of China's foreign trade export structure is of great significance.
3. Increased imports of foreign goods, increased competition, is not conducive to the development of domestic enterprises
After the appreciation of the yuan, the sales price of imported goods in the country will be reduced, and domestic consumers with the same currency can buy more imported goods. This will have a serious impact on the survival and development of domestic production enterprises, especially those in the quality, brand, technology content and other aspects of the world's advanced level and the distance between the enterprises, and may even be eliminated in the fierce market competition, the short term is not conducive to the economic growth of domestic enterprises and market share, but in the long term competition for the long-term development of the domestic enterprises is not without benefit.
4. Increase the pressure on domestic employment
At present, because most of China's export commodities are low-tech, low value-added labor-intensive products, with the appreciation of the RMB, weakening the export of labor-intensive products, resulting in a decline in the profits of processing export enterprises that can absorb a large number of laborers, these enterprises invested in the shift to technology- or capital-intensive industries, will inevitably make many lower-quality products. Inevitably, many lower-quality job seekers will face an unemployment crisis. And most of the new jobs in China are mainly provided by exports and foreign trade enterprises, the appreciation of the RMB affects exports and foreign direct investment, which in turn brings a certain impact on the improvement of the current employment environment. At present, China's labor resources have not been transformed into human resources, and only skilled workers have an advantage. Therefore, the development of processing trade, focusing on improving the industrial level and processing depth, enhance the domestic supporting capacity, relying on China's labor advantages in the development of processing trade will continue to be China's long-term economic content.
Third, for the appreciation of the renminbi coping strategies and measures
In view of the appreciation of the renminbi on the impact of China's foreign trade, we should take corresponding measures to strengthen and expand the appreciation of the renminbi on the development of China's foreign trade and positive impact, alleviate and reduce its negative impact.
(a) to step by step to promote the improvement of the RMB exchange rate formation mechanism reform
Before the RMB exchange rate reform, due to the undervaluation of the RMB exchange rate, resulting in the distortion of domestic and foreign commodity prices, the low price of export commodities, imports of high prices, resulting in the country in the past a long period of time, the export volume continues to rise, the trade surplus continues to increase, and continued to appear for several years a large amount of Trade surplus, causing frequent trade friction with trading partners.
Since July 21, 2005, China began to implement a managed floating exchange rate system based on market supply and demand, with reference to a basket of currencies for adjustment. This new exchange rate formation mechanism will have some impact on economic growth and employment in the short term. However, the overall benefits outweigh the disadvantages. We should actively and steadily push forward the reform of the RMB exchange rate formation mechanism, to gradually improve the degree of marketization of the exchange rate generation mechanism, so that the RMB exchange rate is more flexible, exchange rate fluctuations can more significantly reflect the changes in market supply and demand, and to strengthen the coordination of local and foreign currency policies, give full play to the exchange rate in balancing the international balance of payments and resisting the shocks of international capital flows, in order to meet the requirements of the opening up and the development of the market economy. In short, RMB exchange rate reform should start from the perspective of opening up and market economy development. In short, the RMB exchange rate reform should start from the demand side of China's economy, consider the trade with trading partners and mutual economic interests, and realize a win-win situation.
(B) actively expand the domestic market demand, reduce the dependence on foreign exports
In the past a long period of time, due to the relative undervaluation of the exchange rate of the RMB, resulting in strong growth in exports, China's foreign trade continued to have a huge surplus. Many enterprises to export trade, resulting in a large influx of capital, labor and other factors of production into the export sector, social resources can not be optimized according to the market allocation, resulting in China's economy is not enough domestic demand, but too much reliance on the situation of foreign exports, which is China's long-term economic, stable and sustainable development is very unfavorable. China has a population of 1.3 billion, hidden behind the huge population is a huge domestic consumer market, in order to truly realize the sustainable development of China's economy, we must adjust the economic structure, reduce the dependence on foreign exports, as soon as possible to achieve the "export-oriented" economic development strategy to "domestic demand-oriented" sustainable development strategy. We must adjust our economic structure, reduce our dependence on foreign trade and exports, and expeditiously realize the transformation from an "export-oriented" economic development strategy to a "domestic demand-oriented" sustainable development strategy, and establish a correct and scientific concept of development. At the same time, the government should take effective measures to carry out a variety of supporting reforms, actively cultivate and expand the domestic consumer market, encourage investment, especially private investment, focusing on supporting enterprises with core competitiveness.
(C) Optimize and upgrade the structure of China's foreign trade, and improve the technological content and added value of export products
For a long time, in China's exports, the lower value-added, low-technology labor- and resource-intensive products occupy a dominant position. As most of our export enterprises are engaged in processing trade with low technological content and value-added, workers are mostly engaged in repetitive and skilled labor, and their profitability is greatly restricted. With the appreciation of the RMB, it is difficult to give full play to China's comparative advantage of low labor prices, and it is difficult for export enterprises to rely solely on cheap labor and the low exchange rate policy formulated by the state to develop overseas markets. In order to the long-term development of China's foreign trade and the sustained growth of China's economy, we must adjust the structure of foreign trade and promote the optimization and upgrading of China's foreign trade structure by improving the technological content and added value of export products. Data show that many European and American multinational corporations have integrated technological innovation and R & D into their corporate development strategies, and have their own complete R & D centers, and invested a lot of R & D funds. In China, many enterprises do not even have the consciousness of independent R&D and technological innovation. Their so-called core technologies and equipment are basically dependent on foreign imports.
It can be said that the reform of the exchange rate mechanism and the appreciation of the renminbi on the export enterprises have some pressure, as an export enterprise, should actively adjust the business philosophy and export strategy, increase independent research and development and technological innovation, should meet the needs of personalized consumption for the purpose of product conceptual innovation, product functionality, product innovation, product form innovation, product packaging innovation, product innovation and so on, with the appreciation of the renminbi as an opportunity to improve the export of Taking the appreciation of RMB as an opportunity, we should improve the technological content and added value of export products, accelerate the upgrading of products, improve the grade of export products, enhance the brand connotation and design ability of products, create brand advantages of export products, so as to establish the core competitiveness of enterprises, improve the price of export products, and respond to the RMB's appreciation in a positive manner, and win the initiative in foreign trade. At the same time, export enterprises should pay attention to the development of new products, the introduction of new technologies, import new equipment, speed up the pace of absorption, digestion and re-innovation of imported technologies, reduce the dependence on foreign countries for new high-tech products, such as optics, medical care, precision instruments and equipment, etc., and adjust the structure of China's trade through the efforts of the import and export of the two sides, and mitigate the adverse impact of the appreciation of the renminbi on China's trade.