In view of the stage of China's economic development and the international environment, China does not have the economic basis for the rapid appreciation of RMB. If the RMB is allowed to appreciate blindly, it will inevitably lay a hidden danger for the long-term stability of the financial market. At a time when the exchange rate of RMB against the US dollar has reached a new high, we should be alert to the negative impact of the rapid appreciation of RMB on the economy.
The author thinks that China's huge foreign exchange reserves and huge trade surplus with some countries cannot be used as a prerequisite for RMB appreciation. At present, China should stabilize its trade balance by adjusting its trade structure, instead of narrowing its trade surplus by greatly appreciating the RMB.
First, as far as the economic base of RMB appreciation is concerned, the economic base of RMB appreciation in China is quite different from that of Japanese in 1960s and 1980s, which determines that the space and time for RMB appreciation are very limited. As we all know, Japan's post-war rise benefited from the huge financial assistance from the United States on the one hand, and more importantly, Japan mastered the cutting-edge technology of mechanical and electrical products after the 1960s. Panasonic, Sony, Toshiba, Toyota and other local enterprises stand out in Japan, relying on their own core advanced technology to make their products quickly exported to other countries. These products with independent intellectual property rights and high-tech content are exported, which on the one hand has accumulated a lot of material wealth for Japan, on the other hand. In this case, the western countries dominated by the United States finally forced Japan to sign the Plaza Agreement in 1985, and the yen began to appreciate sharply. As far as China's specific national conditions are concerned, after the reform and opening up, China's trade scale has been expanding day by day, and the trade surplus has been further expanded in recent years. At present, it has nearly one trillion dollars of foreign exchange reserves. Although on the surface, the background of RMB appreciation in China is very similar to that in Japan, if we analyze the trade structure, we will find that the economic base on which RMB appreciation in China depends at present is not the same as that in Japan. Different from Japanese electromechanical industry with core technology, China's trade surplus mainly comes from primary product export and simple processing trade. This trade surplus is very unstable under the background of resource depletion, sharp rise in the prices of raw materials such as oil and intensified anti-dumping sanctions. In other words, China's RMB appreciation lacks a solid economic foundation.
Second, as far as the damage to the economy caused by the appreciation of the local currency is concerned, under the background of lacking core technology and leading the world's leading products, the damage caused by the sharp appreciation of the RMB to China's economy is far greater than that of the Japanese at the beginning. Many people attribute Japan's economic weakness in the late 1980s to the sharp appreciation of the yen. The author thinks that the appreciation of the yen is only one factor of Japan's economic weakness in the middle and late1980s. Because Japan has mastered the core technology of electromechanical technology and has enough technical space to digest the negative impact brought by the appreciation of the yen, the export of Japanese electromechanical products did not suffer a devastating blow in the late1980s, and the economic weakness in Japan after1980s is related to two major factors. First, Japan lags behind the United States in the frontier industry with information industry as the most important representative form; Second, Japan's domestic consumption demand was obviously insufficient in the late 1980s. From the analysis of the long history of human economic development, the opportunity for any country to rise or revive lies in mastering the most cutting-edge core technology at that time. For example, Japan's leading position in the electromechanical industry in the 1960s and 1960s led to its postwar revival. In the 1960s and 1990s, the rise of the information industry made the United States the only superpower. However, as far as China is concerned, under the conditions of primary product export and simple processing trade, China's product export lacks sufficient technical space to absorb the pressure of RMB appreciation. Under the background that industrial upgrading is lagging behind and domestic consumption demand has not yet started, the impact of RMB appreciation on simple processing trade will be fatal, and the resulting huge unemployed population will have a serious negative impact on the economy. In view of China's huge population and vast hinterland, in the long run, China's economic growth must be based on its own internal circular growth mechanism. Due to many misunderstandings in the early stage, China's economic growth is currently in a high degree of external dependence. Under the background that domestic demand has not yet been formed and the effect of new rural construction has not yet been reflected, the establishment of China's economic internal circulation system still needs a process, which determines that the exchange rate will play an important role in the extraordinary period of China's economic growth and transformation. In other words, it will play an important role in the economic transition period.
Thirdly, the key to solve the imbalance of China's trade balance lies in improving the trade structure, upgrading the export technology content of products and strengthening the temporary management of foreign investment. Theoretically, according to the principle of comparative advantage pursued by international economics, China's real advantage lies in cheap labor, and processing trade should be the most suitable role for China in the international division of labor at present. In fact, this seemingly reasonable theory of trade division itself contains great inequality, because it is based on the premise of acknowledging the existing unreasonable social division of labor, at the expense of developing China's environment and resources, and the final result can only be that the laggards will fall behind forever. Taking China's current export trade as an example, China has little profit in low-end processing trade, and the proportion of living labor in processing trade is very small, while the material consumption represented by raw materials accounts for an absolute proportion in the total trade volume. In this regard, China's trade surplus is more from the export of resources. From a dynamic point of view, this surplus has no significance to economic development. Therefore, improving China's current trade structure and increasing the technical content of its export products are the keys to solving China's current trade balance.
Fourth, the rapid appreciation of RMB will endanger the long-term stability of financial markets. From the perspective of international capital speculation, it has been nearly 30 years since the reform and opening up. The appreciation of RMB provides opportunities for some foreign investors whose investment period has expired to obtain excess capital gains. Some international hot money also entered the China market for speculation before the appreciation of RMB, which was welcomed by these two types of foreign investors. As mentioned above, due to the lack of a solid economic foundation for RMB appreciation, once the pace of RMB appreciation slows down after a substantial appreciation, the withdrawal of foreign capital will cause huge financial turmoil and crisis. In fact, at present, some international speculative capital has entered the China market through disguised channels such as false trade. Under the background that China's capital market has not been fully opened to the outside world, foreign capital enters the China market through various disguised channels in order to obtain the exchange rate difference of RMB appreciation. Judging from the development of the domestic capital market, some people even expect to rely on the opportunity of RMB appreciation to intervene in the A-share market and create a ten-year bull market, but they don't know that the essential feature of capital is profit-seeking, and the ultimate goal of foreign capital entering the A-share market is to pursue both capital gains and RMB appreciation. "There is no such thing as a banquet that never ends." Once foreign capital is dispersed, its negative impact on the capital market is unimaginable. After the split share structure reform, the continuous issuance of new shares will further strengthen the concept of value investment, and the emergence of high-quality blue-chip stocks will curb speculation and strengthen value investment, thus eventually attracting huge domestic savings funds to enter the A-share market. In this regard, the huge domestic savings funds are the backbone of future investment in the A-share market, not foreign capital.