China did not intend a temporary appreciation of the renminbi?

For the moment the United States, the best interests of their country's policy is of course the weak dollar. Because the weak U.S. dollar can increase the competitiveness of U.S. manufacturing, reducing the current account deficit. Can be said that the United States today more necessary than ever export-driven growth.

Weak U.S. dollar makes the U.S. a large depreciation of the dollar as foreign investors acquired a large capital surplus, the most rapid rate of reduction in net debt countries. More crucial is that the U.S. economy out of balance again the only direction is re-industrialization, not return to the United States overseas factories, but recreating a new industrial system, the weak dollar can raise the overall operating cost of traditional industries. In other words, only the traditional resource and energy bubble in the "water" can essentially guarantee from the large amount of investment pouring into the new so-called low-carbon economy (310358, fund it) form, and fully guarantee the security of these investments .

Frankly, the yuan has been pegged to the dollar as the American "anti-crisis" established power, when the dollar precarious, the Chinese people to the U.S. debt "does not abandon, do not give up," the biggest support for the dollar. However, the "three years east of the river, three years of Hexi Corridor," the soft underbelly of Europe did not expect so soon exposed – the weak economy, debt deterioration; under the impact of the crisis, "Only a unified central bank, there is no uniform financial Department "of the so-called monetary union area, is actually full of loopholes.

Thus, the euro Kuangbian hedge – the U.S. dollar, making U.S. growth momentum in the first quarter were a serious threat. Was the yuan peg at this time, has become a weak dollar policy of the greatest obstacles to the implementation of the yuan's appreciation against the U.S. dollar recovery, the dollar rally to stop U.S. exports or to take a breath. Some people say that Europe's debt crisis, the Chinese Government will delay the time of revaluation. In fact, the current external pressure from the United States is far more likely, because with the euro or the dollar continue to rise.

Domestically, the real exchange rate theory, the rise of a country, either through nominal exchange rate appreciation of the type to do equal, if not reflected in the nominal exchange rate, it will show the rise in domestic inflation. The domestic non-trade sectors such as real estate or services prices rose sharply, it is normal that the performance of inflation, which is well-known international economics, "Balassa – Samuelson effect."

Thus, the exchange rate became the control means, through the nominal exchange rate adjustment (more precisely, is the appreciation of the yuan against the U.S. dollar) to cool the domestic asset bubble. But "Barcelona" and "seesaw" effect can effective, depending on when the nominal exchange rate appreciation since the existing structure of the economy is sufficient to support the resources of the Department of Trade wished, transfer to non-trade sector.

Current market mechanisms for allocation of resources in China is missing. Finance, the main transport (from road to rail transport network, from aviation to the ocean transportation, etc.), telecommunications, electric power, by the monopoly power of control, or the concentration of private capital not involved. The reality may be more than that, relying on the current state sector "anti-crisis" cohesion policy "unprecedented resources and capital elements of advantage", a foray into the secondary industry. Can imagine that exchange rate appreciation Erzhi trade sector squeezed out of the funds will be only two to go: the first large influx of short virtual, asset bubbles, further enlarge; second, goes out, depending on external economic and enhanced the relative attractiveness of asset prices and break free of the size of the cost of capital controls.

At present, China has taken some measures. While regulation of real estate. Not by way of lifting interest rates to squeeze the real estate bubble, but by administrative means kicked out of the market demand directly, this is the way of the most familiar, not to the market and more opportunities for delivery of goods warehouse calm, was driven into the property last year to 6 10 000 100 000 000 were locked up.

A lot of money if the profits from the real estate market was out of hand or a push inflation, or flee abroad, after all, global assets, the Chinese super-expensive. Bubble a break, will be a messy, this is a recent overseas fund big reason for China to sing empty. Directly to shut up once almost rude way though, it is relatively effective. A destroyed part of the Super-money, reduce inflationary pressures; 2 to prevent capital flight.

On the other hand is the introduction of the new "private investment in 36", ready to leave the funds trade sector outlets, and will not allow appreciation of the bubble led to even more.

What these signs that the RMB appreciation? Do not appreciated? We own analysis of it.

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