The main influence is: 1, the impact on Chinese export enterprises, especially labor-intensive enterprises.
In the international market, the export prices of Chinese products, especially labor-intensive products, are far lower than the export prices of similar products in other countries.
The reasons are: first, China’s labor price is low;
Second, due to fierce domestic competition, exporters are competing to adopt low-cost sales strategies at all costs.
In case of appreciation, the price of China’s exports in foreign currency will rise in order to keep the RMB price floor unchanged, which will weaken its price competitiveness.
If the foreign currency price of export products remains unchanged, it is bound to squeeze the profit margin of export enterprises, which is bound to affect export enterprises, especially labor-intensive enterprises.
2. It is not conducive to China’s introduction of overseas direct investment.
China is the world’s largest recipient of foreign direct investment.
At present, foreign capital enterprises in the field of industry, agriculture, service industry and other areas play more and more obvious role, to promote technical progress, increase employment, expand export, and promote the entire national economy development to have a great impact can not be ignored.
After the appreciation of the RMB, although it will not have a material impact on the foreign investors who invest in China, it will have a negative impact on the foreign investors who will invest in China, because it will increase their investment costs.
In this case, they may redirect their investment to other developing countries.
3. Increase domestic employment pressure.
The impact of a stronger yuan on exporters and overseas direct investment will ultimately be felt in employment.
Because most of our export products are labor-intensive products, export obstruction will inevitably increase employment pressure;
Foreign-owned enterprises are one of the sectors that provide the most jobs.
The slowdown in foreign investment growth will make the domestic employment situation more severe.
4. It affects the stability of financial markets.
If the renminbi appreciates, a large number of foreign short-term speculative funds will take this opportunity to enter and speculation.
When the development of China’s financial market is still very imperfect, it is easy to cause financial and crisis.
In addition, the appreciation of RMB will further increase the actual amount of existing non-performing assets measured by banks, which is not conducive to the reform of the whole banking industry and the adjustment of the debt structure — now called “” 5. The huge amount will face the threat of shrinking.
At present, it has reached 2,454.3 billion US dollars, ranking first in the world.
Sufficient reserves are an important sign of China’s growing strength and opening-up. They are also a strong guarantee for China to promote domestic economic development and participate in foreign economic activities.
However, if the yuan appreciates, the huge foreign exchange reserves will face the threat of shrinking.
If the yuan were to be converted to a major currency such as the dollar by 10%, China’s foreign exchange reserves would shrink by 10%.
This is a serious problem that we have to face.
