Sino-US trade imbalance does not benefit from the appreciation of the Renminbi

China daily net news: English the China daily report on 29 July, many people think the United States, as long as the appreciation of the Renminbi, the United States on China trade deficit would be reduced. This kind of thinking led to the United States has continued to ask the Chinese to the appreciation of the RMB faster. In their view, in RMB currency is a major factor in the trade balance. But the former London Mayor Roth, righteousness, truth. His research found that if the appreciation of the Renminbi, at least in the short term trade imbalances in the US will not be improved and will continue to deteriorate.

Currently the Shanghai Jiao Tong University Institute of Aetna and management Professor of EMBA Roth, meaning that, once China agreed to the appreciation of the Renminbi, the United States who would further require more substantial appreciation, to the detriment of China and the world economic growth; at the same time, the United States unemployment will not improve unless the United States changes in economic policy, improving the investment rate. "Many people, especially abroad, is not aware of this situation. At least in the short term, such as 18 months, the Renminbi appreciation does not contribute to the improvement of the trade deficit in the United States, "said Roth. Since 2005 China's Renminbi exchange rate regime and the Chinese trade surplus synchronized growth shows that this expectation is not reality.

He said, it is assumed that the volume of trade, the appreciation of the Renminbi to China's export value increased import value will decrease, thus widening trade surplus. Historically, 2005, China's exports and imports in roughly the same pace, but the appreciation of the renminbi in the factors that led China's trade surplus with the United States is increasing.

Ruth said, on the occasion of the global economic recovery, the United States trade deficit in the United States Government growth facing great pressure, but that is not a Chinese, because even if the data from the United States, China and the US trade balance is relatively stable, no large fluctuations.

United States on approximately 90 countries has a trade deficit, if you shrink the Sino-US trade balance, it only means that the United States to other national deficit increased, Ruth.

However, even in the face of China's 6 months on its own of the RMB exchange rate mechanism in the further reform of the United States of information, or are not satisfied with the hawks. Ruth Yi warned that the appreciation of the Renminbi uncontrolled threatens world economic recovery. "We aren't in a stable economic growth," he said.

Ruth said, the United States who wish to increase employment, recovery of economic growth would have to increase the investment rate, instead of blaming others. On the contrary, historically, there are two ways to make a country's economic growth rate reduction: one is the local currency appreciation; a substantially reducing the investment rate, he said. "In the 1970s and later that year, this is the United States Japan demand. ”

United States now demand that China improve consumption rate, this will reduce its investment rate, he said. At the same time, forced to substantially increase the value of RMB, if China while doing the two things that China's economic growth rate would be substantially reduced.