What does the continued appreciation of the renminbi mean?

Appreciation is conducive to attracting capital and alleviating capital outflows. The appreciation of the RMB means that the fundamentals are improving, and the strengthening of economic data will attract more international capital inflows, which can enrich domestic liquidity in the short term, which will be good for real estate.

Appreciation can promote domestic economic restructuring. In the past, the development mainly relied on labor-intensive and export-oriented industries, and the profits of domestic enterprises have always been the "leftovers" of large multinational enterprises. On the one hand, the appreciation of the renminbi can force export enterprises to improve technology and take the initiative to innovate, and on the other hand, it can reduce the import costs of import enterprises, promote the elimination of backward production capacity, and ultimately promote economic restructuring and improve China's position in the international division of labor.

Appreciation is conducive to the development of industries such as the middle and lower reaches. For upstream industries dominated by bulk commodities, the decline in import substitution will crowd out the original market share of domestic enterprises, such as imported soybeans and corn; For the processing industry, especially the midstream industry dominated by import processing, the appreciation of the RMB makes imported raw materials cheaper, which is conducive to cost savings; For downstream industries such as aviation and tourism, the appreciation of the RMB will reduce the debt burden of foreign currencies such as the US dollar a lot, which is what we often call foreign exchange gains.

The renminbi continues to appreciate, generally speaking, the renminbi is becoming more and more valuable in the world, assuming that 7 yuan is equivalent to 1 dollar in the past, then now 6 yuan is equivalent to 1 dollar, if you go to the United States to travel or study, it used to be 7 yuan to buy 1 dollar items, and now you can buy 1 dollar items with 6 yuan, so it is a big plus for people who go abroad in the United States.

For export enterprises, it is a disadvantage, the original exchange of 1 US dollar can be exchanged for 7 yuan in China, and now it can only be exchanged for 6 yuan, which causes certain pressure on export enterprises. (Numbers 6 and 7 are hypothetical for illustration purposes only).

Renminbi appreciation refers to the increase in the purchasing power of the renminbi relative to other currencies, or the fact that residents can exchange less renminbi for more currencies of other countries, for example, in the past, Chinese residents needed 8 yuan to exchange 1 US dollar, but now, Chinese residents only need 7 yuan to exchange 1 US dollar.

The appreciation of the renminbi is relative to other currencies, that is, the purchasing power of the renminbi increases. The reason for the renminbi's appreciation is due to internal dynamics in China's economic system and external pressures. Internal influencing factors include the balance of payments, foreign exchange reserves, price and inflation, economic growth and interest rates.

In 2012, the exchange rate of the renminbi was in a state of flux, and by October 15, 2012, the spot exchange rate of the renminbi against the US dollar hit a new high since 1993.