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RMB relative to the important emerging market currencies in fact is in decline, and these countries are China's export competition of the main rival,the RMB relative depreciation that Chinese enterprises' international competitiveness advantage not only with the appreciation of the RMB declined but improved.
Since July 2005 to collect since, the RMB appreciation has been keeping the situation, the RMB to imported products purchasing power gradually improve. However, since this year, because domestic inflation, the rise of the price increase in the domestic purchasing power decline, appear the "foreign revaluation, internal devaluation" situation.
Yuan "external rise inside those" makes the general public can't see the benefits of the appreciation of the renminbi, also somebody thinks, yuan inside depreciation will lead to the overall depreciation, therefore, the speed of the appreciation of the renminbi shoulds not be too fast.
Purchasing power of different inside and outside
Influence of a country the purchasing power of many factors, and interacting with each other. To understand the purchasing power of different inside and outside, not only to see the value of its currency RMB change, more important is to understand the appreciation of the renminbi behind the structural reason.
In theory, the appreciation of the renminbi mainly from two aspects can improve the purchasing power of the RMB. First of all, the appreciation of the renminbi means imported products relative become cheap, the same amount of RMB can buy imports increased the number of, namely RMB foreign purchasing power improved. At the same time, the appreciation of the renminbi inhibition the domestic product exports, domestic product supply relative increase, the domestic product price decline, the same number of the yuan to buy the number of domestic product increased, the domestic purchasing power is also improved.
Second, the appreciation of the RMB reduce the domestic enterprise and individual foreign investment cost, the increase of foreign investment will reduce the domestic investment demand. Domestic investment to slow down, economic development speed will drop, wages and income growth will ease, leading to consumer demand drops, promote the domestic prices fall.
Of course, theory can help us to understand things develop direction, but can't tell us the process of change and scale. Moreover, theory points out direction is often in the exchange rate in the equilibrium state of the appreciation of the marginal effect. For is still in the process of China's transformation, it is easy for some structural changes and blurred the line of sight.
In fact, so far the yuan against the dollar has risen by more than 10%, but from RMB equilibrium exchange rate should be to have the very big distance (unfortunately, in the RMB exchange rate is not free floating circumstances, we do not know their equilibrium exchange rate level).
When the yuan from a lower level has risen, front theory describes direction is not obvious, the common people may also feel less than. We can see is the appreciation of the RMB to domestic prices still have no effects, even in a certain period of the appreciation of the renminbi, the domestic price has gone up faster, this is mainly because the exchange rate of the yuan against the connection between the domestic price is still not fully established.
A point can be sure, if the yuan so far there are no appreciation or appreciation rarely, the domestic price level is better than we are observed higher. The appreciation of the renminbi is still not result in domestic price stabilises and even decline, the main reason is the appreciation of the renminbi is still very limited.
The appreciation of the renminbi rack
RMB appreciation small mainly displays in the following two aspects: first, although RMB nominal exchange rate raised, but the trade weighted average calculation of the RMB real effective exchange rate of increase is still small. For example, since this year, the yuan against the dollar has increased more than 5%, but we calculated the RMB real effective exchange rate until the end of October only saw a 0.75% rise, while the international experience shows that decide a country's export levels is real effective exchange rate rather than the nominal exchange rate.
Secondly, the same as an emerging market economic country, China this year the yuan relative to the dollar faster than India and Brazil more slowly, and this year the two country's currency against the dollar rose is more than 10%. That is to say, the yuan relative to the important emerging market currencies are in fact devaluation. And these countries are China's export competition of the main rival, the yuan relative depreciation that Chinese enterprises' international competitiveness advantage not only with the appreciation of the RMB declined but improved.
RMB appreciation of slow not only inhibit the revaluation influence, but also brought a lot of capital inflow, pushing up the price of domestic products, which in the short term and the appreciation of the renminbi role opposite direction. Capital inflow reduced the market interest rate, increase the domestic product demand. In general, because trade product is facing a relative competition of the market, its price is mainly affected by the influence of the international market and the increase of demand for trade prices less affected (in fact, part of the trade product domestic prices can also in a period of higher than international prices, such as steel, make part of the steel production enterprises the proportion of sale in domestic market to improve). Non-tradable goods such as real estate prices are great influences on the increasing demand, the price appeared relatively substantially improve (this major is not because foreign direct increased the demand for real estate, the domestic liquidity abundant and interest rates low effect may be more big). As a result, the domestic housing consumers a monthly wages to buy commercial housing area is less and less, and the government to the land control more increased supply of rigid and price of the rapid rise, became the yuan inside depreciation is an important reason.
Domestic non-trade price relative to trade the rise in the price of product is equivalent to RMB real exchange rate appreciation, if this trend continues, the export will be inhibition. Because, this is, the rise in the price of non-trade product will increase trade goods production costs (such as wage increase, workshop rent rise, etc.). At the same time, the allocation of resources from price relatively low trade goods department to the relatively high price of non-trade product department, lead to trade goods department production scale contraction and foreign trade surplus decrease