On the basis of reviewing the historical relationship between the RMB exchange rate system and China's foreign trade development, this paper analyzes the various problems that the RMB exchange rate reform may have on foreign trade in light of the practical problems faced by large import and export enterprises in Beijing.
1. The impact of the RMB exchange rate since the reform and opening up on China's foreign trade is not significant.
Since the reform and opening up in 1979, the RMB exchange rate system has experienced the evolution from a single official exchange rate to the official exchange rate and the market exchange rate, and then to the evolution of the single-market exchange rate system. The RMB exchange rate movement can be roughly divided into three stages.
The previous stage: 1979 to 1993. The RMB exchange rate has been maintained at a level of 1.7 yuan per dollar for a long time under the planned economy. This is obviously overvalued and does not play a role in regulating foreign trade. The basic adjustment mechanism is a mandatory plan plus financial subsidies. This kind of system of “how much to make up†can only be implemented when the number of exports is small. When the finances can no longer afford to subsidize, they have to adopt a policy of determining the exchange rate of the RMB at the national average export exchange rate. However, the depreciation of the exchange rate was transmitted to domestic prices through imports, which led to the rise of China’s prices in the 1980s. The rise in domestic prices has increased the cost of export exchanges, creating a vicious circle of higher exchange rate costs and the depreciation of the RMB exchange rate. The RMB exchange rate has been continuously lowered, and The two-track system of the price of the card and the internal settlement price of foreign trade began to form, and later the exchange rate of the foreign exchange adjustment market was increased.
By the end of 1993, the official exchange rate of the RMB against the US dollar had dropped from 158 yuan at the beginning of 1979 to 100 dollars to 580 yuan against 100 dollars, down 73%. At the same time, the average exchange rate of the renminbi against major trading partners, namely the nominal and real effective exchange rates, also fell gradually, at 68% and 76% respectively. During this period, despite the continuous downward adjustment of the RMB exchange rate, there has not been a sharp increase in exports and a trade surplus. On the contrary, most of the 15 years were deficits. Only in 1982, 1983, 1990, 1991, and 1992, there was a small surplus, and the larger surplus did not exceed $9 billion.
The second stage: the exchange rate was consolidated in 1994 to 1997. On January 1, 1994, the official exchange rate of the RMB was merged with the exchange rate of the foreign exchange market, and a single, managed floating exchange rate system based on market supply and demand was introduced. At the time of the merger, the official exchange rate was reduced by 33.3%. However, considering the eve of the merger, about 80% of foreign exchange receipts and expenditures have been carried out through the foreign exchange adjustment market. At that time, the depreciation of the RMB exchange rate was actually only 6.7%. After the merger, the long-term overvaluation of the RMB exchange rate has changed, and the exchange rate level has become more reasonable. From 1994 to the end of 1997, the exchange rate of the RMB against the US dollar appreciated by 4.8%. Due to the acceleration of domestic price increases between 1994 and 1995, the RMB actually appreciated by 39.0% against the US dollar.
During the same period, the nominal and real effective exchange rates of the RMB increased by 10.2% and 38.7% respectively. Despite the increase in the exchange rate of the RMB during this period, there was no deficit or a decline in the trade surplus. Instead, it rose from a trade surplus of 5.39 billion U.S. dollars in 1994 to about 40.42 billion U.S. dollars at the end of 1997. During this period, the appreciation of the RMB exchange rate and the trade surplus coexisted with the decline in the price of domestically-sold commodity purchases. If the supply of products exceeds demand, the production enterprises are in arrears with debts at home. It is better to lower the price and export, and they can immediately settle the exchange of RMB. In addition, there are export tax rebates and foreign trade system reform. And the foreign trade structure upgrade and other reasons.
The third stage: the Asian financial crisis in 1998. In 1998, affected by the deepening and deepening of the Asian financial crisis, the market experienced a strong expectation of RMB depreciation and increased pressure on foreign exchange funds. In order to prevent the crisis from spreading further in Asia and the world, the Chinese government promised that the renminbi will not depreciate. The exchange rate of the renminbi against the US dollar will be basically stable at around 828 yuan to around 100 US dollars, making an important contribution to supporting Asia and the world economy and financial stability.
Since then, there have been internal and external shocks such as the "9.11" terrorist attacks, the global economic recession and the outbreak of the SARS epidemic. China has adhered to the continuity of the exchange rate policy and kept the exchange rate of the RMB against the US dollar fluctuating within a narrow range. Although the nominal exchange rate of the RMB against the US dollar has remained basically unchanged since 1998, the situation of the trade surplus has remained unchanged. As shown in Table 1, China’s trade surplus has declined due to China’s export competitors during the Asian financial crisis (such as Thailand and Malaysia), from US$43.47 billion in 1998 to US$22.55 billion in 2001. With the recovery of the world economy and the fact that China was the first year of China’s accession to the WTO, the trade surplus began to rise rapidly to US$30.37 billion. The trade surplus in 2003 was temporarily reduced by the impact of SARS, and it rose back to 2002 in 2004. The level is slightly improved. In short, there are indications that there are many factors affecting foreign trade import and export in real life, such as internal and external economic prosperity, foreign investment introduction, domestic reform, and adjustment of taxation policies. These factors will play a role in the period of time exceeding the impact of exchange rate fluctuations on imports and exports. .
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