RMB appreciation effect geometry hot money inflow or capital flight?

Recently, the Renminbi against the US dollar exchange rate highs, the impact of the appreciation of the Renminbi has once again become the focus of discussion on the Internet. However, the appreciation of the Renminbi, different comments but gives the opposite answer.

Hot money inflow or outflow of capital

A Netizen believes that, as the appreciation of the Renminbi, will attract a large number of international capital flows to China's capital markets, these large, flow speed, more profit, is a potential financial market turmoil. In China's financial regulatory system needs to be further perfect and financial market development relative lag, a large number of short-term capital flows through various channels, the flattening behavior of capital markets, easy to raise money and financial crisis, China's economic development. In particular, a large number of floating capital influx will push up the price of real estate and other assets.

But a different view, since 2005, after the rise of the RMB exchange rate, has rendered a unilateral price has more than 20%, international hot money actually had already latent in the appreciation of the Renminbi, because profit opportunities, holders of foreign currency assets will subsequently. In this way, to real estate as the representative of an inevitable decline in asset prices. Branding of Oriental blog article that the appreciation of the Renminbi, already in China holding property for many years, foreign, they have access to huge profits, sure to sell assets of RMB and RMB in order-in-bag to Ann.

Whether down force transformation

RMB appreciation leads to the inevitable result of the increasing cost of export enterprises, reduce the competitiveness of exports.

In this regard, there are Internet users believe that the appreciation of the Renminbi will reduce exports, thereby reducing export too large and too much consumption of domestic resources and pollution domestic environmental issues. Changing the world of work status, the factory of the renminbi is conducive to the establishment of a mechanism to force down, forcing the export business transformation, from low-value-added exports staple consumer goods to the production of high value-added products. At the same time, the appreciation of the renminbi is less, import export, to promote domestic economy as soon as possible from the export-dependent economy to expand domestic demand and accelerate the economic transformation.

Branding zhudaming blog posts have pointed out that the transition to achieve it, is difficult for a change, and transition needs of technology to enhance and improve the quality of labour, more needs to be emerging needs, forming the cultivation of the market demand is not a day for two days to complete.

Branding Sun Jian blog articles were of the view that the appreciation of the Renminbi "down to" not out of China's export-led growth model for successful restructuring. The world economy in the development of a sustainable, healthy "imbalance" State — it is in the national health and economic development (or investment and consumption) of "endogenous structures", according to the international trade theory of "comparative advantage" principle established by their respective reasonable trade structure reflects a corollary, to be adjusted to the health of the "imbalance", the result can only undermine the common development of the world economy is in good order, and the parties that the economic interests of most is short and limited.

Can relieve the pressure on prices

A Netizen's view, in RMB appreciation can ease domestic CPI rise. Since two years the Government uses loose monetary policy and a positive fiscal policy, domestic consumer goods price index (CPI) rose significantly, Government control of the pressure of the CPI. If you let the appreciation of the Renminbi, internationally to dollar oil, iron ore, and other resources will be relative price, for China is the raw material prices, the CPI to suppression. Money in the hands of ordinary people rise (on foreign goods and services), will increase China's imports, this will not only improve people's living standards and quality, but also to reduce the level of domestic of CPI.

There are Internet users view, in RMB appreciation foreigners have been formed on devaluation of the status quo. Moreover, China's imports of food rarely, by the appreciation of the Renminbi to lower domestic prices is unconscionable.

There are views that international capital entering China, need to be converted into RMB. Assumptions, now total of Chinese social goods is 10 trillion yuan, you now need to RMB 10 trillion. If a large number of international capital flows will result in the need to release 10 trillion yuan to meet changing requirements. Now available in 20 trillion RMB in circulation. We know that when the market circulation of monetary aggregate exceed the actual needs, inflation has occurred. People will feel the rising prices, and currency depreciation. (Source: information daily)