Paulson is here to talk about the RMB exchange rate. In addition to praise, I hope to be more "market-oriented." After a sharp rise in the previous period, the RMB took a short break and adjusted back for four consecutive days, hovering at the 7.0 mark. In the first quarter of this year, the RMB appreciated by 4%, and there is little suspense in "breaking seven". Major institutions have abandoned last year's forecast of 6%- 10% and boldly raised this year's forecast to 12%- 15%.

By the end of last year, China's foreign exchange reserves reached 1.528 trillion US dollars. Although the composition of foreign exchange reserves has not been officially announced, most experts believe that the US dollar accounts for the vast majority, and the appreciation has greatly reduced foreign reserves. According to foreign estimates, in the past month, the US dollar fell by 2.6% against major international currencies. If it is assumed that 90% of China's foreign reserves are US dollars, it will evaporate US$ 35.7 billion in the past month, which is equivalent to four times of China's trade surplus in February. Song Hongbing, author of Currency War, said that this is equivalent to four aircraft carriers sinking in China every month.

The appreciation in the first quarter exceeded 4%

Affected by the strong rebound of the US dollar overnight, the RMB moderately adjusted back against the US dollar for four consecutive trading days (until April 2). On April 3rd, the central parity of RMB exchange rate rose to 7.0 192 yuan, and the recent trend was strongly consolidated below the 7.0 1 mark. Traders have said that the recent rebound of the US dollar has curbed the rise of the RMB, but it is only a matter of time before it breaks through 7.

The appreciation rate broke the record. Although the central parity of RMB against the US dollar did not "break seven" on the last trading day of March (March 3 1 7.0 190), the appreciation rate of RMB against the US dollar in the first quarter of this year exceeded 4%, which not only immediately set a new record of 2.77% in the fourth quarter of last year, but also marked the highest appreciation rate of RMB in China foreign exchange market since the establishment of 1994.

As a result, Paulson, who is visiting Beijing, said that China has made "substantial progress" in accelerating RMB appreciation, and the United States opposes trade protectionism and adheres to the policy of opening up foreign investment. They want the renminbi to be completely determined by the market.

Ben Bernanke, chairman of the Federal Reserve, echoed on the other side of the ocean. At the hearing of the Joint Economic Committee of the US Congress on April 2, he said that the recent appreciation of the RMB is beneficial. China still needs economic reform, which will help China reduce its dependence on exports.

With the sharp rise in the first quarter, various institutions and analysts have raised the forecast value of RMB appreciation this year. Song Yu, a macroeconomic analyst at Goldman Sachs, believes that the RMB will appreciate by as much as 12% in the next12 months. In mid-March, Standard Chartered Bank issued a report, which significantly raised the expectation of RMB appreciation against the US dollar this year. It is estimated that this year's increase will reach 15%, and the RMB will reach 6.35 yuan against the US dollar by the end of the year. The bank had previously predicted an increase of 9% during the year.

Tan Yaling, a senior analyst in the global finance department of Bank of China, said, Why not talk more about the depreciation of the dollar? She told reporters that the problem now is that the dollar keeps falling, and the United States is the largest debtor country in the world. Although the United States claims a strong dollar policy, it has done nothing about the rapid decline of the dollar.

According to the report released by the International Monetary Fund (IMF) on March 3 1, in the first quarter, the dollar depreciated by 9% against the euro, the biggest single-quarter decline since 2004. By the end of last quarter, the proportion of US dollar in global foreign exchange reserves had dropped to a historical low of 63.9%.

This once again confirms the famous saying of US Treasury Secretary Connery in the last century: "The dollar is our currency, but this is your problem."

Accelerating appreciation is a disaster.

Such a rapid increase did not see the original hope of solving the China problem, but the negative effects appeared one after another. Experts asked in an interview with the reporter of China Times, is it good or bad to accelerate the appreciation of RMB? A: Sad! With the collapse of enterprises, shrinking foreign exchange reserves and high inflation, the economy may turn to an inflection point. Even the reasons that have been considered to support the crazy rise of A shares in previous years have suddenly disappeared from the field of vision. While refreshing the appreciation record in the first quarter, A shares also refreshed the decline record. In this exchange rate game, the direction of RMB needs to be reconsidered.

The excessive appreciation of RMB exchange rate has caused negative effects in all parts of China. Export enterprises are on the verge of bankruptcy, and foreign exchange reserves are shrinking ... but inflationary pressure is increasing.

The rapid depreciation of the dollar has seriously shrunk foreign exchange reserves. This is not just a quantitative change. The existence of CIC makes foreign reserves a real capital for foreign investment, and the reduction of total amount means the weakening of strength.

The high foreign exchange reserves once worried everyone, but Tan Yaling thinks that the current foreign exchange reserves are $65,438 +0.6 trillion, while the daily trading volume in the international foreign exchange market is $3.2 trillion, and the sovereign wealth funds reach $3.5 trillion, which is not much. In addition, at present, foreign investment is mostly a loss, and the negative impact should not be underestimated.

The most important point is that inflationary pressure is still very high. In June this year, the CPI rose by more than 7% in 5438+ 10 and February, and the appreciation was weak in alleviating imported inflation. Zhang Bin, deputy director of the International Finance Office of the Institute of World Economics, China Academy of Social Sciences, found through model calculation that the M2 of last year actually declined, and the decline rate was about 10%. He believes that the current monetary policy is tight. Although he has always insisted that the renminbi needs to appreciate sharply, he also pointed out that the current economic environment is really not suitable for rapid appreciation.

At the same time, Europe and Japan can no longer afford the troubles of the United States. At the G7 meeting to be held in April, the issue of RMB exchange rate is likely to be discussed by European and Japanese officials. In the context of the continuous depreciation of the US dollar, Europe and Japan hope that the RMB will appreciate more to share the pressure of the euro and the yen.

Experts call for dispelling the expectation of appreciation.

The idea of diluting the renminbi is one after another. Wang Tao, head of economic research and strategy of Bank of America in Greater China, believes that due to the uncertainty of the US dollar and the US financial market, the exchange rate issues discussed at Paulson's trip and the G7 meeting should mainly focus on the trend of the US dollar rather than the appreciation of the RMB.

"The depreciation or appreciation of the US dollar is not expected by the annual index data, but why China's RMB is focused on the expectation of future appreciation, which has great pressure and even risks for monetary policy regulation." Tan Yaling thinks.

Yu Yongding, director of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, suggested speeding up the decoupling from the US dollar. During the recent Asian Investment Summit of Credit Suisse, he pointed out that if the United States wants to solve the debt problem and does not want the economic downturn, it can only default. On the one hand, China needs to find ways to stabilize the US dollar, and at the same time, it needs to speed up its decoupling from the US dollar.

Tan Yaling analyzed that it is especially necessary to dispel the expectation of RMB appreciation. From the international practice, the depreciation or appreciation of major currencies is a trend forecast, but there is no expectation of specific indicators. For example, the overall trend of the dollar in a year is depreciation, but the price of the dollar fluctuates. In 2007, the exchange rate of the US dollar against the euro generally depreciated by 10%, but the price in that year was between 1.36- 1.47. The depreciation of the euro is mainly in the first half of the year, and the depreciation of the dollar is mainly in the second half of the year. It is not that the dollar has fallen all the year round.

"But China's RMB is soaring, which is divorced from market trends and market rules." Tan Yaling pointed out that the expectation of RMB appreciation is one of the reasons why it is difficult to restrain the appreciation, especially in China's economic and financial aspects, which has created many new difficulties and problems, including attracting more hot money to China for arbitrage.