The appreciation of RMB is a long-term trend, which is generally favorable to Zhejiang's economy. The central bank's announcement of RMB appreciation on July 21 marks another important step in the strengthening of comprehensive national power and market-oriented reform, and is likely to mean the arrival of a new period of development and reform.
I. Macro Background of RMB Appreciation
1. RMB Appreciation is the Inevitable Trend of China's Productivity Enhancement
Since the reform and opening up, the RMB exchange rate has gone through the process of inverted U-shaped change from depreciation to slow appreciation (see Figure 1). Starting from 1994, the RMB entered a long-term slow appreciation phase. It was also around this year that the Chinese economy underwent a major change from a seller's market to a buyer's market. From a macro-indicator point of view, the price index of the whole society began to decline; while from an institutional point of view, non-state-owned enterprises began to fully replace state-owned enterprises. The RMB's shift from depreciation to appreciation suggests that, on the one hand, the RMB is returning to its true exchange rate after a long period of depreciation, while, on the other hand, it is the sustained rise in productivity levels that has supported the continued appreciation of the RMB.
Strengthened productivity inevitably leads to a stronger local currency. Under the dual impetus of institutional change and technological progress, China's rapid economic development. 1978 to 2004, China's economy grew at an average annual rate of 9.4%, and the cumulative nominal GDP in RMB has increased 21 times. Especially since the 1990s, labor productivity has increased significantly faster than that of the U.S. Between 1990 and 2001, China's labor productivity increased by 6.75 times, and after deducting the price factor by 3.58 times; the U.S. increased by 1.52 times, and after deducting the price factor by only 1.29 times. Labor productivity increases lead to cost reductions, coupled with Chinese enterprises to actively improve product quality and grade, the competitiveness of goods increased significantly, attracting Europe, the United States and Japan and other developed countries and regions for China's commodities in great demand, which in turn triggered China's foreign exchange surplus continued to rise.
Since 1994, China's balance of payments current account and financial capital project surplus has been growing trend (see chart 2), the formation of a double surplus situation. 2004, China's balance of payments surplus of up to $636.8 billion. The exchange rate is the price of a currency, determined by the supply and demand for local and foreign currencies in the foreign exchange market. If the demand for RMB in the foreign exchange market exceeds the supply of RMB, RMB will face appreciation pressure and vice versa. The sustained growth of China's economy for more than a decade and the accumulated balance-of-payments surplus of more than 600 billion U.S. dollars have created a huge demand for the RMB in the foreign exchange market. It is in this demand pull, the appreciation of the yuan has become an inevitable choice.
At the same time, the balance of payments surplus for more than a decade, resulting in China's foreign exchange reserves continue to increase. As of June this year, China's foreign exchange reserves amounted to 71.1 billion U.S. dollars, although there are international speculators, but the incentive is to enhance the national strength of the RMB appreciation expectations. Huge foreign exchange reserves far more than based on the normal needs of the security reserve, and thus further increase the pressure of RMB appreciation. Holding excessive foreign exchange reserves will affect the independence of China's monetary policy, but also cause a decline in the efficiency of factor allocation, especially holding U.S. Treasury bonds yield is far lower than the rate of return of foreign investment in China (difference of about 10%), a large number of profits earned by foreigners. Against such a background, raising the value of the yuan is conducive to overcoming distortions in resource allocation.
2, the appreciation of the yuan will not repeat the mistakes of Japan
Some people like to cite the case of Japan to illustrate the adverse consequences of the appreciation of the local currency. Some people even politicize this, saying that the pressure on the appreciation of the local currency is a plot by the Americans to bring down a country's economy, in fact, these are not persuasive.
It should be said that the appreciation of the yen is not the culprit of the current economic decline in Japan. The appreciation of the yen began on August 26, 1971, Japan from the fixed exchange rate system of staring at the U.S. dollar to a floating exchange rate system. On December 8 of that year, in accordance with the Smithsonian agreement, the yen from 360 yen to 1 U.S. dollar, appreciated to 308 yen to 1 U.S. dollar. Prior to this, Japan had experienced 15 years of rapid economic growth from 1955 to 1970. However, after this period, that is, from 1970 to 1990, Japan's GDP growth rate was still as high as 9.2% per annum. From the following chart can be visualized, after 1970, the yen continued to appreciate, while Japan's annual GDP growth, but relatively stable to maintain about 8%, the highest year of 21.8%, the lowest year of 4.1%. 1990, Japan's bubble economy burst, the economic growth rate has been lower, which is a very complex economic phenomenon, the reasons are many.
On the issue of RMB appreciation, take Japan's economy to analogize China's economy, in fact, also ignored the two huge differences between the Chinese and Japanese economies. First, the difference in domestic demand. China is a large country with a population of 1.3 billion, the domestic market has great potential. Multinational companies come to China to invest in China's huge market resources. Therefore, after the appreciation of the RMB, even if exports are affected to a certain extent, they can make up for the lack of aggregate demand by developing the domestic market. Japan is a small country, domestic demand is limited, especially the Japanese government has long adopted policies to protect the interests of domestic agriculture, small and medium-sized enterprise owners, further leading to the overall economy lack of strong competitiveness. Second, factor cost differences. Japan is a typical small resource country, rapid economic growth has led to a sharp rise in the price of its domestic factors, the most typical such as the rapid growth of average cash income of employees. 1970, the average monthly income of Japanese workers was 76,000 yen, rose to 37.0 million yen in 1990, an increase of 4.9 times, and if calculated in U.S. dollars, a rise of 13.0 times [1], the cost of the rise in the weakening of Japan's commodity competitiveness. Although China is not rich in natural mineral resources, labor prices will have a strong competitive advantage in the long term.
3. Why RMB appreciation is so difficult
Since the end of 2002, the RMB has been under explicit pressure to appreciate, especially after the central bank raised interest rates in October 2004, and the pressure to appreciate has further increased. In fact, in 1998, the Asian financial crisis, the yuan is also facing mainly appreciation pressure. From the RMB facing appreciation pressure to start appreciation, it took more than three years, is reflecting the appreciation of the RMB a difficult policy choices, here are two main reasons.
First, it is difficult to judge the result of appreciation. Economic operation is an interrelated, complex process of mutual influence, the impact of the appreciation of the yuan, can only give a general expectation, it is difficult to make specific quantitative judgment. But it is certain that the appreciation of the yuan will "pull one hair and move the whole situation", in the event of an uncontrollable situation, it will cause huge economic and political problems. Therefore, the RMB exchange rate adjustment must be considered comprehensively, coordinated and prudent. In particular, at this stage, a large number of international capital investment in the entry of betting on the appreciation of the yuan, while the domestic financial system and capital market is immature, financial institutions to resist anti-risk ability is relatively weak. In such a background, the timing, magnitude and mode of RMB exchange rate adjustment, more need to be carefully selected, a slight error may cause huge fluctuations in the economy.
Secondly, the path dependence caused by the long-term undervaluation of the RMB exchange rate. The yuan is undervalued, so that the export sector has a price advantage, the formation of export enterprises low exchange rate path dependence. Many export enterprises rely on low prices to obtain competitive advantage in the international market, rely on "volume" to win a lot of foreign exchange, the formation of a huge vested interests. The appreciation of the yuan will almost certainly rely on low prices to bring greater pressure on export enterprises, which will break the pattern of distribution of benefits, which will inevitably be opposed by vested interests. Therefore, the appreciation of the yuan must be coordinated with the interests of all parties, to deal with the relationship between the various aspects.
Second, the benefits of RMB appreciation outweighs the disadvantages
The impact of RMB appreciation, both favorable and unfavorable. From a macro and long-term point of view, if the macroeconomic policy to deal with better, the appreciation of the renminbi benefits outweigh the disadvantages. For the time being, the negative impact of the appreciation of the yuan, mostly short-term and localized, will not affect the overall situation of economic development.
1, exports will not plummet.
First of all, the exchange rate adjustment of the international experience proves that "exchange rate appreciation must hit exports" point of view has no empirical basis. Japan and Germany have experienced a substantial appreciation of the currency, but the exports of these two countries do not fall but rise (see Figure 4, Figure 5). 1971, "Nixon shock", the yen against the dollar from 360:1 to 308:1. After the yen gradually appreciated, rose to 231 yen to the U.S. dollar in 1984, while the Japanese exports to the United States at the same time, Japan's exports to the United States. At the same time, Japan's exports to the United States were on the rise. In yen terms, Japan's total exports to the United States in 1985 amounted to 42.9 trillion yen, an increase of six times over 1970, an average annual increase of 12.7%. 70s is the fastest period of appreciation of the German mark, the bilateral exchange rate from 3.68 marks to the dollar in 1970, appreciated to 1.73 marks to the dollar in 1979, a cumulative appreciation of 1.13 times, while during this period of time Germany's foreign trade exports increased by 1.5 times, and has maintained a large surplus.
Secondly, zhejiang's export structure based on industrial manufactured goods determines the appreciation of the yuan will not cause a sharp decline in exports. Export commodities are divided into two categories, one is primary products, the other is manufactured goods. Primary products exported by developing countries have a high rate of convergence and fierce competition in the international market. After the appreciation of RMB, the export of primary products is likely to be reduced by this effect. However, judging from the situation in Zhejiang, the proportion of exports of primary products has been decreasing year by year, accounting for only 5.1% of the total exports in 2003, so the overall impact on trade exports is not significant. The production of industrial products has internationalization characteristics, need to import a large number of raw materials, as well as machinery and equipment, etc., after the appreciation of the RMB, enterprises will reduce the cost of imported raw materials, machinery and equipment, to provide enterprises with a certain amount of space to reduce prices, alleviate the price pressure brought about by the appreciation of the people. More importantly, industrial manufactured goods products differ greatly, the impact of RMB appreciation on the competitiveness of export products, mainly depends on the price relationship with the products of the relevant countries. From China's products in recent years, the situation of significant price competition, China's low-level industrial manufactured goods compared with other countries have a huge price advantage, even if the appreciation of the yuan and a small price increase, but also not necessarily higher than other countries and regions, so as not to a greater extent to affect the competitiveness of China's exports of products.
Once again, low labor costs make the export enterprises can withstand a certain appreciation pressure. Zhejiang is China's labor-intensive production of a model, supported by low wages, international competitiveness is much higher than the national average, low labor costs become Zhejiang commodities in the world market has a clear price advantage of the main support. According to the calculation of the Trade and Development Report 2002, China has the lowest unit labor wage in 17 important sample countries, and the wage in the United States is 50 times of the wage in China. Cheaper labor costs will not be fully offset by higher export prices. After the appreciation of the RMB, if the magnitude is not very large, labor costs still have a clear comparative advantage. Low labor costs allow exporters to adopt a price reduction strategy to alleviate the pressure of the appreciation of the yuan, exports will not be significantly reduced due to the appreciation of the yuan.
Finally, the exchange rate is not the main factor affecting exports, the increase in industrial labor productivity is the key to the rapid growth of exports. Historically, since 1994, the real exchange rate of the RMB has been on an appreciating trend, but China's exports have maintained a rapid growth momentum. 1994-2002, the RMB appreciated relative to the US dollar, the euro (deutsche mark before 2001) and the Japanese yen by 5.1%, 17.9% and 17% in nominal terms, and by 18.5% in real terms. The real exchange rate appreciated by 18.5%, 39.4% and 62.9% respectively, while the annual growth rate of China's exports to the U.S., Germany and Japan during this period was 17.3%, 11.5% and 14.1% respectively; and the annual growth rate of Zhejiang's exports to the U.S., Germany and Japan was 23.9%, 20.7% and 14.7% respectively. This shows that the exchange rate is not the key to exports, labor productivity is the core factor. Since the 1990s, China's export sector labor productivity has maintained a higher than the United States 1.5-2 times the growth rate, Zhejiang and higher than the national average. As long as the faster increase in labor productivity is maintained, exports will naturally continue to grow.
2, foreign direct investment will not be a large-scale decline
1994-2003 the province attracted foreign direct investment totaling 29.0 billion U.S. dollars, an average annual growth of 37.2%, foreign-funded enterprises have become an important impetus to promote the province's economic growth and solve the problem of employment, but also an important way to introduce advanced production technology from abroad After the appreciation of RMB, foreign direct investment (FDI) has become an important driving force to promote economic growth and solve employment problems in the province. After the appreciation of the yuan, foreign direct investment will not fall sharply, because there are three main reasons for foreign-funded enterprises to invest in China:
One is optimistic about the large market of 1.3 billion people. It is impossible to find a second potential market of this size in the world. Fierce market competition has led foreign companies to enter China in large numbers in search of new profit growth points. Taiwan's Master Kong Group before entering the mainland market is only a little-known small company, after entering the motherland, the huge mainland market so that it quickly grew into China's largest domestic Taiwanese-funded food companies, and gained the reputation of "China's King of Noodles".
The second is to make full use of China's cheap labor resources. China's labor wage level is quite low, measured by the nominal wage level of the manufacturing industry in 1998, China's labor cost is only 1/50 of that of the United States, 1/30 of that of Japan, and even 1/4 to 1/5 of that of developing countries like Malaysia and the Philippines. another important factor here is the long-term intensive operation of agriculture, which creates the excellent qualities of the Chinese peasants who are particularly good at hard work and dexterity of mind and body.
Third, the appeal of similar cultural traditions. Among the foreign-funded enterprises in Zhejiang, Hong Kong-funded and Taiwan-funded enterprises account for about half. The mainland and Hong Kong and Taiwan have the same language and cultural traditions, a high degree of cultural identity is an important reason for these enterprises to invest in China, a small appreciation of the yuan does not constitute a major impact on the introduction of such foreign capital.
The three leading factors of the rapid growth of foreign investment are all obvious long-term characteristics, so foreign direct investment will not be rapidly reversed because of the rise in the foreign price level of the yuan. 2003 "SARS" ravaged the specific background, the province's utilization of foreign investment still achieved considerable results can prove this.
3, there will be no widespread unemployment
Employment is not only an economic problem, or an important social and political issues. Many people are worried that the appreciation of the yuan will seriously affect aggregate demand, thus causing widespread unemployment and affecting social stability. This worry is not justified.
The exchange rate adjustment will have an impact on employment mainly through two channels, one is that the appreciation of RMB will cause changes in the relative prices of imports and exports, which will in turn affect exports and ultimately employment; the other is that the appreciation of RMB will affect foreign direct investment, which will in turn affect the investment in fixed assets, which will in turn spill over to the employment situation. According to the previous analysis, after the appreciation of the RMB, there will not be a fundamental reversal of both corporate exports and foreign direct investment, and therefore employment will not fluctuate significantly.
In addition, China's domestic demand has been very strong since 2002, and the central bank has been utilizing open market operations to roll back currency since early 2003, and then adopted some monetary policies to increase control of domestic lending after July. So far, domestic demand still has a tendency to expand automatically. After the appreciation of the RMB, as long as domestic demand maintains steady growth, the impact of the appreciation on external demand can be offset, maintaining the stability of aggregate demand. In the case that aggregate demand maintains steady growth, employment may fluctuate slightly after RMB appreciation, but it is unlikely to cause widespread unemployment.
Three, the appreciation of the renminbi on the six major impacts of Zhejiang
The appreciation of the renminbi is the province's economic development of new opportunities, conducive to the adjustment and optimization of the industrial structure, change the mode of economic growth. The exchange rate adjustment although only 2% appreciation, but changed to "reference basket of currencies", means that the exchange rate formation mechanism to the market has taken a solid step forward. Zhejiang higher degree of marketization, market players more mature and rational, easier to grasp the price signals expressed by the exchange rate changes, rational and effective allocation of resources to improve the efficiency of economic development.
(I) is conducive to the better use of resources outside the country
RMB appreciation is conducive to increase the welfare of the residents. 2003 urban residents in the province per capita disposable income of 13,100 yuan, the RMB appreciated by 2%, the equivalent of each person to increase the purchasing power of U.S. commodities by 262 yuan. This can expand residents' purchases of imported goods from abroad and reduce the cost of studying and traveling abroad.
The appreciation of the yuan is conducive to the use of foreign resources. Resources, technology and other factor constraints will be a long-term problem for Zhejiang's economy. In recent years, Zhejiang's imports of iron ore, crude oil and other basic resources grew rapidly, in 2004 than in 2003, respectively, an increase of 325% and 140%. Appreciation of the yuan, the cost of imports reduced, Zhejiang is a good news. According to Hangzhou Customs statistics, in the first half of this year, Zhejiang imported 14.61 billion U.S. dollars, according to the appreciation of the yuan exchange rate, you can save 2.34 billion U.S. dollars.
The appreciation of the yuan is conducive to the use of foreign advanced knowledge. Appreciation of the yuan, the purchasing power to enhance the domestic enterprises can be a lower cost, increase the direct purchase of foreign patents, technology and equipment, while increasing the dispatch of management, technical personnel to study abroad. Ltd., not long ago signed a contract to import a single pressure in the world ranked 9th hot extrusion machine, worth 9.75 million euros, after the appreciation of the RMB 2%, the enterprise will pay 2.25 million yuan less.
(2) is conducive to accelerating the flow of labor to the tertiary industry
After the appreciation of the renminbi, reduce the cost of imports of enterprises will form the expansion of imports of machinery and equipment, such as high-tech products; at the same time, for export enterprises, the appreciation of the renminbi means that the relative increase in the cost of labor, and therefore there will be a replacement of domestic labor with foreign capital goods, that is, the enterprise to expand the import of machinery and equipment, using new technology. At the same time, for export enterprises, the appreciation of RMB means the relative increase of labor cost, so there will be the situation of replacing domestic labor with capital goods from abroad, i.e. enterprises will expand the import of machinery and equipment, and reduce the employment of workers in enterprises by utilizing the high efficiency of new technology. From this point of view, the appreciation of the yuan will cause a certain number of people to lose their jobs.
But this process will accelerate to improve the overall productivity of the manufacturing industry, improve the wage income of manufacturing workers, thereby increasing their spending power, which provides a good opportunity for the development of the tertiary industry represented by the service sector. In this way, the employed people replaced by high-tech will be absorbed by the tertiary industry, forming the accelerated transfer of labor to the tertiary industry, thus making the role of the service industry in absorbing the employed population more and more prominent, which is also in line with the development experience of developed countries.
(C) is conducive to the transformation of the mode of economic growth
First of all, the appreciation of the RMB can accelerate the industrial structure adjustment. After the appreciation of RMB, the export of low value-added products will be inhibited and the profit margin of enterprises will be reduced. In order to survive in the competition, enterprises have to change the way of competition, on the one hand, will pay more attention to the domestic market, rather than the pursuit of exports, become a workshop of multinational corporations; on the other hand, will strive to change the export structure, increase the proportion of high value-added products, which will force enterprises to improve the level of science and technology, the formation of accelerated transformation of the industrial structure of the pressure. In addition, after the appreciation of the people, the cost of imports is reduced, and enterprises can better utilize knowledge, technology and advanced equipment outside the country, which reduces the cost of industrial restructuring.
Secondly, the appreciation of the RMB is conducive to transforming the mode of economic growth. Zhejiang's rapid economic development at the same time, the environment and resource pressure is becoming more and more serious, almost to the limit of tolerance. Zhejiang's main products unit energy consumption than developed countries more than 30% higher than the energy utilization efficiency than developed countries more than 10 percentage points lower than the 2003 per capita energy consumption, per capita electricity consumption than the "Ninth Five-Year Plan" at the end of the increase of 23% and 100% respectively. Some export products are relying on high energy consumption, high pollution to survive, is the product of foreign transfer of environmental pressure. Appropriate appreciation of the renminbi will make low energy consumption and high environmental protection of high-tech equipment import cost reduction, increase the number of imports, effectively reduce the waste of resources, reduce environmental pressure. In addition, can also through the "survival of the fittest" effect, eliminating part of the energy consumption, low value-added export enterprises, and gradually change to the world cheap auction of our precious resources, accelerate the transformation of the mode of economic growth.
(D) is conducive to reducing trade friction and improve the trade environment
Zhejiang export commodities to labor-intensive, lack of core technology, industrial manufactured goods, these products accounted for roughly more than 80% of total exports. The added value of export products is low, mainly relying on low prices to participate in the international market competition, trade friction is inevitable. 2002-2004, Zhejiang **** encountered foreign "two anti-diplomacy" and "337 investigation" case 71 cases, involving the "337 investigation" and the "two anti-diplomacy" and "337 investigation" cases. "71 cases, involving 2,496 enterprises, the amount involved in 1.5 billion U.S. dollars, respectively, accounting for 45% of the country, 50% and 60%, Zhejiang has become the most anti-dumping, safeguard measures, such as the most investigated provinces.
In the short term, the appreciation of the yuan after the export price of products will increase. But because the province's export prices have been very low, even if the appropriate increase in price, the product will still have a strong competitive edge, and help to reduce the other countries on China's low-priced products dumping lawsuits. Zhejiang part of the exports in the international market share is quite high, if the use of this market advantage, appropriate increase in product prices, but may increase profits. Appreciation of the yuan also showed the world that China's attitude towards exchange rate reform, Europe and the United States and other countries are bound to adjust their trade policies with China, reduce the number of various types of trade friction.
In the long run, the RMB exchange rate adjustment, although only a 2% increase, but it shows a signal: the RMB is returning to the real exchange rate. For enterprises, this means that in the future must adjust its low-priced competitive strategy to improve the quality, style, functionality and after-sales service to win, to improve its position in the international division of labor and value chain, increase the added value of the product, so that the export trade is gradually integrated into the benign track of sustainable development. And this is obviously conducive to reducing trade friction.
(E) is conducive to accelerate the process of enterprises in our province to the world
Zhejiang Province, the private economy is developed, the private capital is strong, with a typical "hide the wealth in the people," the characteristics of the province's deposit balance of 1475 million in 2003, the province's deposit balance of 1475 million in 2003, the province's deposit balance of 1475 million. The province's deposit balance in 2003 amounted to 147.58 billion yuan, counting from 1990, an average annual growth of 27.8%. However, due to the imperfections of the economy and financial structure, the transmission mechanism of savings to investment is blocked, and a large amount of surplus capital is looking for profit opportunities. In the case of the stock market downturn, the capital frantically rushed to the real estate market, active in all parts of the country, "Wenzhou speculation group" is a clear example. In this sense, the province does not lack of investment capital, the lack of investment opportunities.
After the appreciation of the yuan, you can use less money to buy more foreign resources, will stimulate the development of foreign investment, the implementation of cross-border operations, so that you can better utilize the international market without having to worry about the sanctions of trade barriers. Throughout the development of foreign multinational corporations, the lower stage is purely product exports, the higher stage is direct investment, the implementation of local production. Zhejiang enterprises to take the lead in the world, but also inevitably need to go through this process. RMB appreciation will accelerate the realization of this process.
(F) the appreciation of the yuan a number of adverse effects
Zhejiang's economy has obvious export-oriented characteristics, in 2004, Zhejiang Province, total foreign trade amounted to 852.3 billion U.S. dollars, foreign trade dependence to as high as 66%, export dependence of up to 43%. For Zhejiang such a large export province, the appreciation of the yuan will also bring some adverse effects.
--Hit export enterprises. The textile industry and other low value-added products have the biggest impact. Zhejiang has a lot of exports below 2 million U.S. dollars of small textile enterprises, textile industry profits are generally less than 10%, and these small enterprises only in the 3% or so, a one-time appreciation of 2 percentage points, the blow to the enterprise is not small.
--Impact on foreign direct investment. Appreciation of the yuan will make the same amount of foreign currency converted into yuan value decline, it will make foreign investors less profit, investment naturally slowed down.
--Impact on employment. The export enterprises in our province are mainly labor-intensive enterprises. In the case of the appreciation of the yuan, the export enterprises profit decline, enterprises are likely to use the method of suppressing the wages of workers, reduce the number of workers to transfer the loss of the appreciation of the yuan. This will bring a certain impact on employment.
--Widening the income gap. After the appreciation of the yuan, income expressed in dollars has increased. But only the middle- and high-income groups who can buy imported high-grade products can really enjoy the benefits of appreciation. In addition, the Shanghai and Shenzhen stock markets have risen after the appreciation of RMB, and the beneficiaries are also the middle and high-income groups who have the ability to invest. The income gap will widen as a result of RMB appreciation.
Four, actively grasp the appreciation of the yuan formed by the characteristics of the new development stage, accelerate the transformation of economic growth mode
Both Japan, South Korea, or Germany, the appreciation of the local currency will promote the national economy to enter a new stage of development. Japan's experience is to show that the local currency into the appreciation process, a country's economy and society at least about 20 years of rapid development. The appreciation of the yuan also indicates that China's economy has entered a new stage of development, this stage has five important features.
One is that the level of marketization is further higher, and the market will play a more fundamental role in resource allocation; two is that the competitiveness of China's economy has risen, and the discourse in the global economy has become stronger; three is that the advantage of the low price of commodities and services has begun to weaken, forming the pressure to promote the industrial structural adjustment and transformation of the mode of economic growth; and four is that China's economy is further integrated with the global economy, at least gradually in trade, Commodity prices and other aspects of the formation of internal and external economic integration pattern; Fifth, the floating exchange rate system leads to increased uncertainty in the market environment, but as long as the flexibility of the macro-control of the camera's choice will be conducive to the activation of positive factors within the economic and social, and enhance the sensitivity of the rational allocation of factors
Fully grasp the appreciation of the yuan to form a new stage of development of a number of important features to accelerate the transformation of Zhejiang Economic growth mode, is an important historical mission of our current. As far as the government is concerned, it should take the opportunity of RMB appreciation to further accelerate the market-oriented reforms and accelerate the transformation of the mode of economic growth. As far as enterprises are concerned, in the short term, they can use a variety of financial means to avoid exchange rate risks, but also can take to the dealer to transfer the burden and other ways to reduce the loss of the appreciation of the yuan, and in the long term, it should be pressure into power, accelerate technological progress, accelerate the adjustment of product structure, enhance the core competitiveness of enterprises.
1, accelerate market-oriented reforms, seize the opportunity to optimize resource allocation mechanism of exchange rate changes. The exchange rate is not only a policy tool, but also a price. As a price, the exchange rate in a market economy should be determined by the market; as a policy tool, adjust the exchange rate is to affect the economic behavior of market players, therefore, the exchange rate changes can play an effective role in regulating the key lies in whether the market mechanism is perfect, lies in the market players can be sensitive in a timely manner in order to respond to exchange rate adjustments. Zhejiang private economy is developed, the degree of marketization is high, the current should be property rights reform as a hand, accelerate the transformation from primary market economy to modern market economy, improve the market level of resource allocation. Only in the market system is perfect condition, the main body of market competition can accurately grasp the exchange rate transmitted by the domestic and foreign price information, correctly cost and profitability of the international comparison, so that the import and export trade is really built on the basis of comparative interests, maximize the competitiveness of enterprises. At present, it is necessary to accelerate the process of factor marketization, such as reducing the government's administrative intervention in the granting of industrial land, and increasing the proportion of bidding, listing and auctioning of industrial land; accelerating the pace of governmental reform to provide more public **** products at low cost with a more innovative government to promote the good functioning of the national economy and society; and accelerating the upgrading of the level of honesty and integrity, and reinforcing the strength of governmental supervision to maintain and optimize the market economic order.
2. Implement the import strategy and increase the utilization of advanced knowledge and other resources from abroad. The appreciation of the renminbi to the enterprises in our province has brought the export pressure, but also reduces the cost of our province to use the advanced knowledge and other resources outside the province, which is both encountered natural mineral resources constraints, but also by the lack of knowledge constraints in Zhejiang, is a major strategic opportunity. Therefore, from the "leverage" development and openness to promote the development of the strategic height of the starting point, like grasping the export, research and implementation of import strategy, accelerate the introduction of advanced knowledge outside the country, and actively utilize the mineral resources outside the country. To systematically study and increase the study abroad training, the introduction of patents and technical equipment, procurement of advanced commodities, purchase of energy and raw materials. Through the use of overseas advanced knowledge, purchase of mineral resources, to optimize the import structure, to make good use of Zhejiang's huge foreign exchange, to accelerate the enhancement of Zhejiang's economic and social knowledge, alleviate the resource constraints in Zhejiang, out of the industrial structure of the path lock, change the mode of economic growth.
3, strengthen the industry associations and other intermediary organizations, the cost of factors passed on to dealers. To overseas dealers to pass on the cost, is an important strategy for exporters to ease the cost pressure of RMB appreciation. But a single enterprise is weak, the need for government guidance, led by non-government industry organizations and come forward to enhance the price negotiation ability with overseas dealers. Industry associations should also seize this opportunity to give full play to their role. In fact, some enterprises in our province's export products in the international market has a high share, we have a strong bargaining power in the price, you can ask and customers *** with sharing the loss of profits brought about by the appreciation of the RMB. For example, Shaoxing Haona Textile Trading Co., Ltd. and Saudi Arabia signed an export contract with a foreign businessman, 1 meter (1.5 meters long, 1 meter wide) "Jetta chemical fiber fabrics" unit price than before increased by 3 cents, an increase of 4.3%, which can be effective and dealers together to share the cost of the appreciation of the RMB upward pressure.
4, enhance the core competitiveness, change the structure of foreign exports. Enterprises can not rely on long-term exchange rates, interest rates and other external policies to protect the development. Must rely on scientific and technological progress and improve labor productivity, enhance the intrinsic competitiveness of products to achieve the transformation and development of enterprises. With the opportunity of RMB appreciation, enterprises should reasonably arrange the import plan, increase the import of advanced technology and high-tech products, and improve the level of enterprise science and technology. Enhance the connotation of the enterprise brand and create the international advantages of the brand. Resource integration and product restructuring, the implementation of diversification strategies, improve product quality and grade, adjust the product structure, increase the added value of products, and realize the output of products to the output of brands and capital export.
5, strengthen the long-term study of the RMB exchange rate. Renminbi exchange rate adjustment will have a multifaceted impact on the Zhejiang economy, I will make further in-depth investigation and research. I also hope that the relevant departments will attach great importance to this issue, the province's organization of scientific research strength, regular seminars, in-depth study of the trend of RMB appreciation of the Zhejiang economy to cope with the policy.