The Positive Impact Of Rmb Appreciation On China's Macro Economy And The Follow-up Measures

It has been five years since the Chinese exchange rate system was adjusted to take the market supply and demand as the foundation,referring to a basket currency and the managed floating exchange rate system, July 21st 2005. In these five years, the RMB to US dollar exchange rate appreciated to 6.8035 RMB/US dollar on August 14st 2010, comparing to the beginning of 8.11 RMB/US, it has been appreciated more than 17.8 %.With the continuous appreciation of RMB, China's macro-economy presents the following characteristics:in the aspect of foreign trade, the trade surplus continued to expand, general trade and processing trade suffered varying degrees, different products----mainly mechanical and electrical products, high-tech products, textile and agricultural products suffered uneven. In the aspect of international capital flows, hot money inflows, China's export of capital increases,in the stock market A-share market substantives good, but it hides some risks and creats a new division, H-share becomes Wind vane, B share of the Shenzhen and Shanghai market performances different.in the aspect of internal equilibrium, the rapid economic growth and moderate inflation went hand in hand; real national income increases, but the income gap between different sectors and income gap between urban and rural areas were also expanding; The industrial structure is constantly upgrading. In this part of the paper,I Mainly used empirical analysis and qualitative analysis, analied these new features minutely, and describes the impact on RMB appreciation to China's macro-economic of pros and cons, but overall doing more good than harm, the appreciation is a historical necessity, we should look at the positive appreciation of the problem,continue to do well at any time and prepare to do with long-term appreciation.In 2010, a new situation emerged in China's macroeconomy, GDP growth rate came down significantly, the Chinese economy has entered a period of adjustment; risk in the stock market increases, real estate transactions is in the doldrums, the market capital flows change, manufacturing purchasing managers index (PMI) slows down, PMI of the new orders index drops to up 5-year low; the aggregate demand is relative lack and this leads to inflation pressures temporary relief; but the international demand improve,and export is expected to be better; manufacturing purchasing managers index (PMI) in 15 consecutive months keeps above 50, economic overall is expaning. In this part of the paper, I mainly use empirical analysis and normative analysis, considering the current new situation, combined with the experience of currency appreciation in Japan and Germany,propose some policy recommendations on maintaining macroeconomic sustained, steady growing: maintain small and gradual appreciation on RMB;accelerate industry upgrading; increase the protection measures for export enterprises; further increase China's foreign exchange market;strengthen the oversight on the flow of international capital, encourage investment; continue to maintain an expansionary fiscal policy and expand domestic demand.