论文部分内容阅读
Seven years have passed since China adopted a floating exchange rate regime based on market supply and demand with reference to a basket of currencies. The Chinese currency, called the yuan or renminbi, has appreciated 22 percent, with the central parity rate of the yuan against the U.S. dollar strengthening from 8.11 on July 21, 2005 to 6.3112 on July 20, 2012.
But the appreciation of the yuan is far from over. Experts think the key to the ongoing exchange rate reform is to allow the market to have a greater role in the process. Meanwhile, expectations of the yuan exchange rate should be stabilized to pave the way for the internationalization of the currency.
Two-way move
Despite the fact that the yuan has appreciated more than 20 percent against the U.S. dollar during the past seven years, it has experienced two-way fluctuations since the fourth quarter of 2011.
In October 2011, the yuan witnessed the first round of depreciation, and now it is again in the midst of another decrease, Ding Zhijie, Dean of School of Banking and Finance at the University of International Business and Economics, told Economic Information Daily.
According to an analysis of renminbi exchange rate trends released by the Shanghaibased Fudan University, in the second quarter of this year the yuan depreciated by 0.88 percent against the U.S. dollar, a record high since 1994. In May, the yuan depreciated by 0.97 percent.
Ding said the two rounds of depreciation have something to do with the rebound of the U.S. dollar in the international market, and to some extent, reflect policy intentions.
During the annual sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference in March, Premier Wen Jiabao said that since the renminbi exchange rate reform started in 2005, the real effective exchange rate of the yuan has climbed 30 percent. The yuan’s exchange rate against the U.S. dollar began fluctuating in the non-delivery forward market of Hong Kong in September 2011, which indicates the yuan exchange rate may be drawing near an equilibrium.
On April 16, the People’s Bank of China(PBC), the central bank, widened the trading band for the yuan against the U.S. dollar to 1 percent from 0.5 percent. That means that in the foreign exchange spot market, Chinese banks can exchange the yuan 1 percent above or below the central parity against the U.S. dollar announced by the China Foreign Exchange Trading System each trading day. The PBC extended the trading range of the yuan from 0.3 percent to 0.5 percent in May 2007. Then the range was reduced to 0.3 percent because of the financial crisis. In June 2010, it was again adjusted back to 0.5 percent.
Either at the market level or at the political level, the appreciation pressure on the yuan is decreasing, said Liu Weiming, an expert on financial markets from the head office of China Citic Bank, in an interview with Economic Information Daily. Accompanied by the extension of the floating range, the exchange rate will be more elastic, and the two-way fluctuations will be more evident, he said.
The impact
Accompanying the changes in the yuan exchange rate is the gradually contracting surpluses in the balance of international payments.
In the fourth quarter of 2011, China’s balance of payments saw a surplus in its current account and a deficit in its capital account. A surplus appeared in the capital account in the first quarter of this year. According to the State Administration of Foreign Exchange (SAFE), net inflow of foreign exchange witnessed a rebound since the beginning of this year, but it is still decreasing year on year. China’s Balance of Payments Report for 2011 released by the SAFE said that China will continue to see a surplus, but the scale will be shrinking.
China’s huge surpluses in current and capital accounts of the balance of payments had been reduced as a result of the rebalance of international economic circumstances and the appreciation of the yuan. Without a doubt, the yuan exchange rate is a key factor, said Liang Guoyong, an economic affairs officer from the Investment and Enterprise Division of the United Nations Conference on Trade and Development.
“The financial crisis was complicated by the euro-zone sovereign debt crisis, resulting in less capital inflow to China. However, the roughly 30 percent appreciation of the yuan against the U.S. dollar may exert a positive influence on the balance of payments, for it can alleviate the pressure from the double surpluses,” Zhao Qingming, a financial expert, told Economic Information Daily.
Fudan University’s renminbi exchange rate report says shrinking demand caused by the euro-zone sovereign debt crisis poses a severe threat to China’s exports, and consequently undermines economic growth. Meanwhile, it’s going to take some time before economic restructuring, tapping new sources of economic growth and expanding domestic demand come into play. An economic slowdown is inevitable in the short run. These factors will make the yuan continue to depreciate, but the room is quite limited.
“Some people fear that the stop of the yuan’s appreciation may have a formidable impact. I think it’s absolutely unnecessary. It’s natural that the market doesn’t take a fancy to the yuan in the context of an appreciating U.S. dollar, but the situation has not been fundamentally changed,” said Zhao.
A driving force
The goal of China’s administration on exchange rates is to reduce radical fluctuations and lower the risks of holding the yuan, which is beneficial for the internationalization of the yuan, said Ding.
Ding stressed that for many years, the appreciation of the yuan has been an important driving force behind its internationalization. However, in the days to come, the role of the exchange rate will be reduced. Instead, stability and profitability will become the main forces driving the currency to go global.
It is believed that backflow mechanism of overseas yuan funds will amplify the impact of offshore yuan prices to onshore yuan prices. Meanwhile, there is a possibility for speculative capital to make its way back to China. Given these concerns, the marketoriented reforms of the interest rate and exchange rate should precede the internationalization of the yuan.
On June 8, the PBC adjusted the upper limit of the floating band of deposit rates to 1.1 times the benchmark level and allowed the banks to offer 20-percent discount to borrowers. On July 6, the central bank expanded the floating band of lending rates, allowing banks to offer 30-percent discount to borrowers.
“Interest rate inherently interacts with exchange rate. If the marketization of interest rate cannot be carried out, neither can the marketization of exchange rate,” said Ding.
Yuan Exchange Rate Reform
April 16, 2012: The People’s Bank of China, the central bank, widens the yuan’s trading band against the U.S. dollar to 1 percent from 0.5 percent.
June 19, 2010: The central bank proceeds with reform of the yuan exchange rate regime and improves its flexibility.
April 10, 2008: The central parity rate of the yuan against the U.S. dollar breaks 7.0 and rises to 6.992.
May 21, 2007: The central bank widens the yuan’s trading band against the U.S. dollar to 0.5 percent from 0.3 percent.
May 15, 2006: The central parity rate of the yuan breaches 8.0 per U.S. dollar and strengthens to 7.9982.
September 23, 2005: The central bank widens the yuan’s trading band against the non-U.S. dollar currencies from 1.5 percent to 3 percent.
July 21, 2005: China unpegs the yuan from the U.S. dollar and shifts to a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies.
But the appreciation of the yuan is far from over. Experts think the key to the ongoing exchange rate reform is to allow the market to have a greater role in the process. Meanwhile, expectations of the yuan exchange rate should be stabilized to pave the way for the internationalization of the currency.
Two-way move
Despite the fact that the yuan has appreciated more than 20 percent against the U.S. dollar during the past seven years, it has experienced two-way fluctuations since the fourth quarter of 2011.
In October 2011, the yuan witnessed the first round of depreciation, and now it is again in the midst of another decrease, Ding Zhijie, Dean of School of Banking and Finance at the University of International Business and Economics, told Economic Information Daily.
According to an analysis of renminbi exchange rate trends released by the Shanghaibased Fudan University, in the second quarter of this year the yuan depreciated by 0.88 percent against the U.S. dollar, a record high since 1994. In May, the yuan depreciated by 0.97 percent.
Ding said the two rounds of depreciation have something to do with the rebound of the U.S. dollar in the international market, and to some extent, reflect policy intentions.
During the annual sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference in March, Premier Wen Jiabao said that since the renminbi exchange rate reform started in 2005, the real effective exchange rate of the yuan has climbed 30 percent. The yuan’s exchange rate against the U.S. dollar began fluctuating in the non-delivery forward market of Hong Kong in September 2011, which indicates the yuan exchange rate may be drawing near an equilibrium.
On April 16, the People’s Bank of China(PBC), the central bank, widened the trading band for the yuan against the U.S. dollar to 1 percent from 0.5 percent. That means that in the foreign exchange spot market, Chinese banks can exchange the yuan 1 percent above or below the central parity against the U.S. dollar announced by the China Foreign Exchange Trading System each trading day. The PBC extended the trading range of the yuan from 0.3 percent to 0.5 percent in May 2007. Then the range was reduced to 0.3 percent because of the financial crisis. In June 2010, it was again adjusted back to 0.5 percent.
Either at the market level or at the political level, the appreciation pressure on the yuan is decreasing, said Liu Weiming, an expert on financial markets from the head office of China Citic Bank, in an interview with Economic Information Daily. Accompanied by the extension of the floating range, the exchange rate will be more elastic, and the two-way fluctuations will be more evident, he said.
The impact
Accompanying the changes in the yuan exchange rate is the gradually contracting surpluses in the balance of international payments.
In the fourth quarter of 2011, China’s balance of payments saw a surplus in its current account and a deficit in its capital account. A surplus appeared in the capital account in the first quarter of this year. According to the State Administration of Foreign Exchange (SAFE), net inflow of foreign exchange witnessed a rebound since the beginning of this year, but it is still decreasing year on year. China’s Balance of Payments Report for 2011 released by the SAFE said that China will continue to see a surplus, but the scale will be shrinking.
China’s huge surpluses in current and capital accounts of the balance of payments had been reduced as a result of the rebalance of international economic circumstances and the appreciation of the yuan. Without a doubt, the yuan exchange rate is a key factor, said Liang Guoyong, an economic affairs officer from the Investment and Enterprise Division of the United Nations Conference on Trade and Development.
“The financial crisis was complicated by the euro-zone sovereign debt crisis, resulting in less capital inflow to China. However, the roughly 30 percent appreciation of the yuan against the U.S. dollar may exert a positive influence on the balance of payments, for it can alleviate the pressure from the double surpluses,” Zhao Qingming, a financial expert, told Economic Information Daily.
Fudan University’s renminbi exchange rate report says shrinking demand caused by the euro-zone sovereign debt crisis poses a severe threat to China’s exports, and consequently undermines economic growth. Meanwhile, it’s going to take some time before economic restructuring, tapping new sources of economic growth and expanding domestic demand come into play. An economic slowdown is inevitable in the short run. These factors will make the yuan continue to depreciate, but the room is quite limited.
“Some people fear that the stop of the yuan’s appreciation may have a formidable impact. I think it’s absolutely unnecessary. It’s natural that the market doesn’t take a fancy to the yuan in the context of an appreciating U.S. dollar, but the situation has not been fundamentally changed,” said Zhao.
A driving force
The goal of China’s administration on exchange rates is to reduce radical fluctuations and lower the risks of holding the yuan, which is beneficial for the internationalization of the yuan, said Ding.
Ding stressed that for many years, the appreciation of the yuan has been an important driving force behind its internationalization. However, in the days to come, the role of the exchange rate will be reduced. Instead, stability and profitability will become the main forces driving the currency to go global.
It is believed that backflow mechanism of overseas yuan funds will amplify the impact of offshore yuan prices to onshore yuan prices. Meanwhile, there is a possibility for speculative capital to make its way back to China. Given these concerns, the marketoriented reforms of the interest rate and exchange rate should precede the internationalization of the yuan.
On June 8, the PBC adjusted the upper limit of the floating band of deposit rates to 1.1 times the benchmark level and allowed the banks to offer 20-percent discount to borrowers. On July 6, the central bank expanded the floating band of lending rates, allowing banks to offer 30-percent discount to borrowers.
“Interest rate inherently interacts with exchange rate. If the marketization of interest rate cannot be carried out, neither can the marketization of exchange rate,” said Ding.
Yuan Exchange Rate Reform
April 16, 2012: The People’s Bank of China, the central bank, widens the yuan’s trading band against the U.S. dollar to 1 percent from 0.5 percent.
June 19, 2010: The central bank proceeds with reform of the yuan exchange rate regime and improves its flexibility.
April 10, 2008: The central parity rate of the yuan against the U.S. dollar breaks 7.0 and rises to 6.992.
May 21, 2007: The central bank widens the yuan’s trading band against the U.S. dollar to 0.5 percent from 0.3 percent.
May 15, 2006: The central parity rate of the yuan breaches 8.0 per U.S. dollar and strengthens to 7.9982.
September 23, 2005: The central bank widens the yuan’s trading band against the non-U.S. dollar currencies from 1.5 percent to 3 percent.
July 21, 2005: China unpegs the yuan from the U.S. dollar and shifts to a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies.