The Influence On Macroeconomics Made By The Appreciation Of RMB And Policy Analysis

Nowadays, with the rapid development of our economy, the economic structure and the velocity of increase experience adjustments and optimization as well, among which the reform of RMB exchange rate becomes an significant focus of the ecomomic development in China. In2005, our central bank announced the establishment of the mechanism of exchange rate based on market supply and demand, which includes an institution of managed floating exchange rate, being independent, not depending on the dollar and having a certain elasticity. There are many factors that can affect the appreciation of RMB. In this paper, I will analyses the reasons from four aspects as follows:1. The difference between the nominal exchange rate and the real exchange rate2. The huge trade surplus in our economy3. The difference of inflation between USA and our country4. The weak dollar, the strength of the expectation of the appreciation of RMB exchange rate, and the huge influx of hot money from the world.Since we have implemented the reform of RMB exchange rate, many phenomenon emerge in our economy, both positive and negative, which include the huge surplus of the international trade, the increase of foreign currency reserves, the lag of the industrial structure in some industries, the poor efficiency of the management, the lack of technical content and economic benefits, and the excessive consumption and waste of the resourses.All in all, the appreciation the RMB exchange rate is a double-edged sword. On the one hand, we should take advantage of the positive effects, including the investment to foreign currency and the increase of the capital input and so on; on the other hand, we should make full use of the opportunities the negative effects brought to us, including the optimization of the industrial structure, upgrading of the products and the acceleration of the industrial transformation and so on. Meanwhile, we should take in the experience and lessons from Japan and Germany how the two countries coped with the appreciation of currency. The problems of Japan and Germany at that time are extremely simialar to ours currently.Although the two countries were both faced with the pressure of appreciation, they took different measures of exchange rate aimed at the same situation. Eventually it resulted in opposite effects. Therefore, the measures the two countries took have great research value, reference value and warning value for our current status.1. The appreciation of the exchange rate is a trend of economy, which is hard to avoid. Any countries in the process of economic growth must see the influence of pressure that the appreciation gives to the overheating economy. It’s better to adjust the exchange rate according to the trend of appreciation, which is a gradual process, and the adjustment must be adapted to the economic fundamentals. As a consequence, such adjustment is beneficial to the stability of domestic price and steady development of economy, and is advatageous to the reallocation of the demestic economic resources between the trade departments and the non-tarde ones.2. Faced with the unstable exchange rate, our country must keep the autonomy and the independence of its monetary policy harder.3. Guide the capital flow to the right direction,focus on the fluction of the capital price. With the rapid development of economy, the appreciation will inevitably lead to a surplus of capital. Therefore, the capital must be directed properly; otherwise, it will cause virtual economy, such as capital run into the stock market and real estates. Finally it may lead to a bubble economy.As the economic entities in the world become increasingly closer, the trend of integration becomes more and more obvious. The exchange rate plays an important role in the allocation of the world resources. Since our country is an important part of the world economy, our reform of exchange rate will have a far-reaching influence on the global and Asian countries. Due to the clamors for appreciation,both domestic and international,our government should not only maintain the steadiness of the exchange rate,but also cope with the effects brought by the appreciation and pressure from the increasing foreign currency reserves through positive measures1. We should take minor, gradual mode of appreciation to avoid the impacts of the steep appreciation.2. We should optimize industrial structure and protect the export enterprises, such as enhancing the instution of export rebates in order to let more enterprises set aside some time to adjust and upgrade to deal with the transformation of industrial structure.3. We should speed up the construction of our foreign exchange market, inmprove the mechanism of the foreign exchange market, enrich the varieties of the foreign currency, intensify the supervision of the inflows of the international capital, encourage international investments of the enterprises, and conduct a macroeconomic control from the angle of macroeconomy. Taking these ways as starting points, we should take measures to cope with the negative effects of the appreciation of RMB.