Why do some people say that the appreciation of the renminbi against the dollar is paying for the ec

No. Dollar.

Indices are different from the US dollar. The U.S. dollar index is a composite index of the U.S. dollar, the euro, the Canadian dollar, etc., but the U.S. dollar is dominant. Answer.

Normally, the U.S. dollar index is also the U.S. dollar. However, this is relative, if our inflation is not suppressed at this time, and other economies are stable, then the dollar index **, but the depreciation of the yuan against the dollar is also normal.

U.S. interest rates**, the U.S. dollar is weak; U.S. interest rates are rising, and the U.S. dollar is biased. The fact that the U.S. dollar is still strong despite a large deficit and a huge fiscal deficit is the result of the U.S. policy of high interest rates, which has prompted a large amount of capital to flow into the U.S. from Japan and Western Europe. The trend of the US dollar is greatly influenced by interest rates.

No, the dollar is related to **.

The renminbi rose and the dollar fell.

There are three main reasons for the strength of the yuan:

First, the U.S. dollar index weakened.

Generally speaking, the strength of the U.S. dollar index has an inverse relationship with non-U.S. dollar currencies such as the RMB.

Data shows that since late May this year, the dollar index has started to decline, and recently fell below 92, hitting a new low since early May 2018.

Because of the Federal Reserve.

With the release of a large number of currencies, under the market's expectation of the depreciation of the US dollar, the US dollar index continued to **, and non-US currencies, including the RMB, showed an appreciation trend.

The Federal Reserve has launched monetary easing on a scale unprecedented since the pandemic, while the Fed is targeting monetary policy.

The framework was adjusted to introduce an "average inflation system". In July, US bond yields, which had been depressed, fell further, while the dollar index also began the second phase of the "dollar shortage" in late July.

Second, China's economic fundamentals continued to improve.

China has achieved remarkable results in epidemic prevention and control, China's economy has continued to recover and improve, and major economic indicators are gradually improving, and China is the only major economy to achieve positive growth in the second quarter, which is a strong support for the RMB.

Nbs.

According to the data, China's economy continued to recover steadily in July, among which, the growth rate of retail sales of goods in July turned from negative to positive for the first time this year, and the growth rate of exports reached double digits.

The latest manufacturing PMI for August.

The non-manufacturing business activity index and the composite PMI output index have all remained above the critical point for six consecutive months.

The strengthening of the renminbi exchange rate is also a reflection of China's economic fundamentals. From the manufacturing PMI index.

In terms of performance, after experiencing a cliff in February, China's economic prosperity continues to recover, the World Bank.

As well as the International Monetary Fund, China will be one of the few countries that can achieve positive economic growth this year, so the performance of domestic fundamentals after the epidemic has provided important support for the RMB exchange rate.

Third, RMB assets are popular.

China is continuing to push the financial markets.

International investors are optimistic about the prospects of China's economy and RMB assets, and foreign capital continues to flow into China's capital market.

It is conducive to the appreciation of the renminbi.

According to recent data released by the State Administration of Foreign Exchange, in July, foreign investors increased their net holdings in domestic listings** and the scale of bonds doubled year-on-year, and foreign exchange reserves.

The balance has been growing positively for 4 consecutive months.

Against the backdrop of global central banks maintaining easing, China's central bank.

During the epidemic, monetary policy remained cautious and determined, and the interest rate differential between China and the United States remained high, and the attractiveness of RMB assets increased significantly, which also contributed to the strengthening of the RMB exchange rate.

As of August 28, the representative 10-year Treasury bond yield spread between China and the United States has exceeded 230 basis points, and the widening interest rate gap between China and the United States and the higher yield of RMB assets have attracted foreign capital inflows, which has played a role in boosting the appreciation of the RMB exchange rate.

The United States now wants the renminbi to appreciate. Here's why:

First, the appreciation of the renminbi will lead to an increase in the labor cost of China's manufacturing industry, the weakening of the international advantage of domestic goods, and China's already severe export situation is bound to make it worse, which will cause more migrant workers to lose their jobs. The products of developed countries such as the United States, which are relatively more competitive in terms of product quality and service, will reduce the gap between labor costs and China, and make China's products subject to huge competitive pressure. The U.S. can alleviate employment pressures, but even a real depreciation of the renminbi won't necessarily solve the problems Americans think they are.

Second, the appreciation of the renminbi will lead to a relative depreciation of the US dollar, and China's $2 trillion in foreign exchange will depreciate accordingly, and the blood and sweat of China's 200 million migrant workers over the years will be used to pay for the US financial crisis.

The trend of RMB appreciation is unstoppable, but now is not the time, but a gradual process, otherwise it will regain the consequences of Japan's long-term economic downturn caused by the sharp appreciation of the yen forced by the United States, but China is different from Japan, China is not a vassal of the United States.

If you want the renminbi to appreciate, we export labor-intensive products with cheap labor, and there is no longer a competitive advantage, and export companies are hindered, so as to increase employment in the United States in disguise, and there is an influx of hot money to disrupt China's financial market, for example, the American takes 100,000 US dollars to exchange 800,000 yuan to buy real estate or do business in China, and then the RMB appreciates, he can exchange 600,000 yuan for 100,000 US dollars, so that he earns an exchange rate of 200,000 yuan, and foreign exchange reserves are facing a huge shrinkage, in the past, 8 yuan goods for 1 dollar, now 1 dollar can only buy 6 yuan, and the goods directly evaporate 2 yuan。

The United States wants the renminbi to appreciate.

China has been doing for decades what the Western world has asked it to do, which is to allow the renminbi to float more freely. The United States, outraged by China's superiority, took the lead in demanding that China let the renminbi appreciate.

And that's exactly what Beijing has been doing. According to the International Monetary Organization, the renminbi has appreciated by more than 30 percent against the US dollar since 2005. However, the West has been demanding that China go further and move from a controlled exchange rate float to a more liberal one.

In fact, it is not China's government decree that requires the renminbi to depreciate, but the daily exchange rate determination system has changed, allowing the renminbi exchange rate to be more than the original mechanism allows.

The West got what it had been asking for all along, but did not like the result. It turns out that the West only wants to apply market forces to China when the results of market forces are in Washington's interests. This is hypocrisy. China has reason to be angry.

The world already thinks that China has a special magic. Among the world's economies, China is the only one that is not affected by normal gravitational pull. It's been growing so strongly for so long, and the world still thinks China will continue to grow like this forever.

However, no country can violate the laws of economics, and China's miracle is an earthly miracle after all.

The positive impact of RMB appreciation.

1. It is conducive to China's imports.

2. The cost of raw material import-dependent manufacturers has decreased.

3. The ability of domestic enterprises to invest abroad has been enhanced.

4. The profits of foreign-invested enterprises in China have increased.

5. It is conducive to the study and training of talents abroad.

6. The pressure on repaying principal and interest on foreign debts has been reduced.

7. It is more cost-effective to sell Chinese assets.

8. The international status of China's GDP has improved.

9. Increase state tax revenue.

10. The international purchasing power of the Chinese people has increased.

The negative impact of RMB appreciation.

1. The renminbi is not freely convertible under the capital account, which means that the mechanism for determining the exchange rate is not the market, and there is no point in changing it.

2. The appreciation of the RMB will bring greater pressure to China's deflation 3. The appreciation of the RMB exchange rate will lead to a decrease in the attractiveness of foreign investment and reduce foreign direct investment in China;

4. It has caused great harm to China's foreign trade exports.

5. The appreciation of the RMB exchange rate will reduce the profit margin of Chinese enterprises and increase the pressure on employment6. The fiscal deficit will increase due to the appreciation of the RMB exchange rate, and at the same time affect the stability of monetary policy.

What will be the impact of the depreciation of the US dollar and the appreciation of the RMB?