Political and Economic Analysis of the Influence of Renminbi (RMB) Exchange Rate Variation on China's Macroeconomics

• Main Authors: Yu-Ting Wei, 魏毓廷
• Other Authors: Jenn-Jaw Soong
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/68494467114136368075

碩士 === 國立成功大學 === 政治經濟學研究所 === 95 === In recent years, the problem of undervaluing the currency value of RMB has been a widely discussed international issue. Also, because of the promotion of China’s economy performance and strategic position, the variation of RMB exchange rate contains the consideration to many politics and economy factors. The first part of this text discusses the formation of both internal and external factors that affect the variation of RMB exchange rate, including the international political pressure from western powers and the strong economic growth of China, which are the double pressure making RMB exchange rate vary, and the encountering strategies as well as responses of China Government when facing the appreciation pressure of RMB. The second part of this text discusses whether China’s economy performance and internal society development would be greatly influenced after RMB appreciates. This text summarizes the main factors that promote RMB appreciation as follows: China’s exchange rate system, China’s economy performance and international politics factors. As to China’s exchange rate system, for 7 years after Asian Financial Crisis, RMB couldn’t reflect its own real value because China fixed the exchange rate of RMB to US dollars. Also, during this period of time, because of China’s economy performance such as increased export trade, continuous foreign direct investment, substantially increased foreign exchange reserves and high economic growth rate together with the stress of each economy index, RMB gets the pressure of appreciation. Regarding international politics factors, this text tries to understand how the international politics pressure headed by the USA continuously calls on RMB to appreciate via the discussion on the viewpoint of international politics. What are the purpose and reason? Is that to solve the problem of bilateral trade deficit? Or, are there other political factors? With the viewpoints of political and economic analysis, this text thinks that the consideration of restraining China’s strategies, but not that of dealing with the problem of trade deficit when trading with China, is the reason why western countries continuously ask RMB to appreciate. After China gave up the exchange rate system fixed to US dollars on Jul. 21, 2005, RMB exchange rate system changed to fix to “currency basket” and has appreciated for almost 2%. Although the appreciation doesn’t cause apparent influence on China’s economic society immediately, the anticipation mentality of RMB appreciation of the external world will be stronger and stronger. Because of currency basket, the adjustment of RMB currency value will be more flexible. Although the reform of exchange rate is the first step of long-term appreciation of RMB, RMB will gradually move toward a proper value in the future. Thus, the adjustment and control of the trend of RMB currency value as well as the exchange rate system remain an issue worth being observed and discussed chronically and deeply.