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题 目 美元贬值对中国经济的影响(The Depreciation
of USD and It’s Effects on China’s Economy)
学 院 外国语学院 班 级 英语N083 学 号 200845639312 学生姓名 罗 珺 指导教师 詹文友 完成日期 2011年6月5日
内容摘要
本文从介绍美元的历史及现状入手,揭示美元贬值的历史原因,分析美元持续贬值的原因及对美国和世界经济的影响,并从进出口贸易、外汇储备、吸引外资、人民币升值等方面重点论述美元贬值对中国宏观经济所产生的正反两方面作用。如何成功应对美元贬值及美元未来走势不确定性可能对我国经济产生的影响,确保我国经济持续快速健康的发展,是值得做进一步研究和探讨的问题。
关键词：美元贬值；中国经济；影响；对策建议
Abstract
This paper begins with a brief introduction to USD's history and current situation, and reveal the historical reason of depreciation. This paper analyse the causes of sustainting depreciation of USD and impact to the America and the world's economic.This paper elaborates on the good and bad impact to china macro economy in terms of import and export trade, foreign exchange reserves, attracting foreign investment, appreciation of the rmb. The problem that how to face the effect from the uncertainty future trend of depreciation and ensure that our country's sustained, rapid and sound economic development is a worth doing further study and explore issue.
Key words: The depreciation of USD; china's economic; Influence;
Countermeasure and advices
Contents
1 Introduction ............................................................................................................... 5
1.1 History and current situtation of the USD ........................................................ 5 2 The causes of sustainting depreciation of USD ...................................................... 6 3 The effect to the China's economic .......................................................................... 6
3.1 good effect ........................................................................................................ 7
3.1.1 Raised our competitive power of goods and service's export ................. 7 3.1.2 Strengthened the attraction of foreign company's direct investmentt ..... 7 3.1.3 the positive impact to our foreign exchange reserve .............................. 7 3.1.4 good to decelerate the press from the deflation ................................... 8 3.2 bad effect ........................................................................................................... 8
3.2.1 Lowered the capacity of our country's foreign exchange reserve ........... 8 3.2.2 Raised the foreign debt burden of our country ....................................... 8 3.2.3 Repressed the shape of our country’s introverted type segment ............. 8 3.2.4 Enlarged the press from an international community to the RMB revalues ............................................................................................................ 9
4 How should RMB face the USD depreciation? ...................................................... 9 5 Conclusion ............................................................................................................... 10
1 Introduction
in the last two year , sustainting depreciation of USD sparked the international social's extensive attention .They widespreadly thinks that will have a profound affect on the world economy develops structure .To our country , because of it's continuously opening to the outside world and integrate into world economy day by day , the depreciation of USD also inevitably impact our economies. There are both opportunities and challenges. What's more, it need to adjust the current policy and reconsider some policies. In short, the influence to china's economic is so worthy of concern and study.
1.1 History and current situtation of the USD
The first dollar coins issued by the United States Mint (founded 1792) were similar in size and composition to the Spanish dollar. The Spanish, U.S. silver dollars, and Mexican silver pesos circulated side by side in the United States, and the Spanish dollar and Mexican peso remained legal tender until 1857.
The history of the United States dollar covers more than 200 years. Under the Bretton Woods system established after World War II, the value of the U.S. dollar was fixed to $35 per ounce, and the value of the U.S. dollar was thus anchored to the value of gold.
Rising government spending in the 1960s, however, led to doubts about the ability of the United States to maintain this convertibility, gold stocks dwindled as banks and international investors began to convert dollars to gold, and as a result the value of the dollar began to decline. Facing an emerging currency crisis and the imminent danger that the United States would no longer be able to redeem dollars for gold, gold convertibility was finally terminated in 1971.The value of the U.S. dollar was therefore no longer anchored to gold, and it fell upon the Federal Reserve to maintain the value of the U.S. currency. Between 1965 and 1981, the U.S. dollar lost two thirds of its value.Over the thirty-year period from 1981 to 2009, the U.S. dollar lost over half its value. This is because the Federal Reserve has targeted not zero inflation, but a low, stable rate of inflation - between 1987 and 1997, the rate of inflation was approximately 3.5%, and between 1997 and 2007 it was approximately
2%. The so-called \"Great Moderation\" of economic conditions since the 1970s is credited to monetary policy targeting price stability.
During the times after 2000, the continually depreciation of US dollar has aroused the international society's widespread interest. And they generally thought this will have a series of quite obvious even profound influences to the near future world economic development pattern.
2 The causes of sustainting depreciation of USD
US dollar’s status in world currency system is closely related in the US's status in world economics. The share's relative drop of American economy in the world economics total quantity's is the historical reason which US dollar weakens. And it is also the economic globalization necessity. In the last few years the continually depreciation of US dollar is the result which the American economy once declined. Looking from the present American economy's development situation, the reason which US dollar depreciates continually has the following:
Looking from the domestic factor,the depreciation of USD may because of the US government. In order to deal with the financial crisis and the economic recession,since December the Fed has cut its policy rate to nearly o.And use various mode mobility toward treating in the market,to sustain the finance markets'stabilization and stimulate a cyclical recovery.The depreciation of USD stimulated the export of United States , and boost American economies.
See from the international factor,the depreciation of USD has two sides of reason at least.First, some nation, particularly the countries of resource type ,lead off economic recovery and start lifting an interest.Secondly, the international investor adjusts a portfolio and reduces USD assets, super - hold other assetses, such as EUR and yen...etc..
3 The effect to the China's economic
The change of dollar rate is a double-edged sword.No matter to American economic or to other national economies in the world ,it will still generate the impact both side of plus or minus.Because the currently RMB's rate regime physically fixeds
on USD.The depreciation of USD will cause virtual depreciation of RMB as to several major world currencies.The impact to our country as follows:
3.1 good effect
See from the opportunity, the devaluation of U.S. dollar provided our economic with four favorable termses:
3.1.1 Raised our competitive power of goods and service's export
To china, if the devaluation of USD are benign,it may do better to the China Economy, especially the export and import..This is right an excellent occasion to expand exports for China enterprise. China export enterprise should grab this opportune and make a great effort to expand the non-dollar area. Moreover, the economic recovery of the rest of the country such as England, Canada and Australia are also well. This also good to expand the export of China enterprise in terms of both price and needs.
3.1.2 Strengthened the attraction of foreign company's direct investmentt
In the respect of the capital flow, China may be a good place for foreign capital flowing again. USD's weak are good to the international capital of non- USD to exchange into USD to be invested to China.For example, EUR,yen may be able to exchange more USD. China should hold this time when international finance capital flowing new swing.
3.1.3 the positive impact to our foreign exchange reserve
To supervision of reserve for foreign exchange,the external world thinks: USD devalue, the national reserve for foreign exchange cash equivalent value descends;EUR devalue, the national reserve for foreign exchange cash equivalent value descends;Yen devalue, the national reserve for foreign exchange cash equivalent value descends.In fine, once the USD,EUR and yen has fluctuation in exchange,The national reserve for foreign exchange cash equivalent values will descend. Actually,foreign exchange reserves will incur losses only when the liquidity needs.But China keep favourable balance of payments in recent years.Thus loss could't be taken
place. In the near future,Chinese foreign exchange reserve have no need to pay for international goods.
3.1.4 good to decelerate the press from the deflation
The RMB depreciation result from the depreciation of USD will good to the arrestment for droop of our country’s price rate , urge the rate horizontal to up and alleviate deflation press.
3.2 bad effect
The depreciation of USD causes the unemployed number of our country raises. The depreciation of USD also causes much related craft employment opportunities' reducing.The cost of the foreign visitor comes to China to travel upswing, affecting tour and the consumption,especially to our service industry, tourism, the navigation industry .
3.2.1 Lowered the capacity of our country's foreign exchange reserve
The foreign exchange reserve of our country in the last few years kept increasing. But because of the big parts of what to holds are USD,The depreciation of USD also means our country's ability to pay or purchasing power of the reserve for foreign exchange is degressive by comparison(EUR and yen). 3.2.2 Raised the foreign debt burden of our country
The short-term outstanding external debt of our country in requirement to reimburse in the near future have one third of all the outstanding external debt,and EUR and yen have above 20%.All these indicate that very part of foreign debts needs to use EUR and yen to settle accounts.This added the foreign debt burden of our country naturally.
3.2.3 Repressed the shape of our country’s introverted type segment
The relevant expert thinks at the same time:Though what current RMB practices is the supervisory floating exchange rate system,Seeing from actual execution effect,
it actually is the fixed exchange rates system that keep the link with the dollar.This kind of exchange rates system makes the extroversion enterprise develops speedly and introverted enterprise is repressed under the trend that USD continuously devalue.It make the cost of the importing oil of China significantly upswing, also make the enterprise of China be lacked of enough power to accelerate technical progressn to expand the outlet.
3.2.4 Enlarged the press from an international community to the RMB revalues
First, nations, such as the United States,Europe...etc. or region successively exert pressure of RMB revaluation.That kindled a series of trade friction, particularly between China and America become even more violent.Secondly, the economic policy of China suffers tremendous i impact.For supporting the stabilization of RMB parities,China has to lower own export rebate rate of duty and looser the limit of foreign exchange that the resident can take , raise reserve ratio...etc.. Finally, the reserve for foreign exchange of China is subjected to loss.
4 How should RMB face the USD depreciation?
The risk of sharp USD depreciation had drawn great attention for some time. The public is deeply worried about the increasing risk of sharp USD depreciation and rather confused about the lack of effective countermeasures. With the risk of another sharp depreciation faced by USD, China's great foreign exchange reserve is
encountered with the ever-prominent problem of preserving and increasing its value.
The sharp depreciation of USD will inevitably cause enormous loss to China. Being faced with the daily increasing risk of sharp USD depreciation, China is in a dilemma when deciding the countermeasures.
Firstly, as far as the foreign exchange reserve policies are concerned, China is bound to suffer a great loss from USD depreciation if it continues to hold an enormous USD reserve. In accordance with IMF's estimation, a USD depreciation of 25 percent connotes a USD reserve loss in East Asia which equals to 1.5 percent of the total GDP in America. On the other hand, large-scale reduction of USD reserve will compound the sharp depreciation of USD. In fact, USD exchange rate falls back
on the enormous USD reserves of China, Japan and other countries to a great degree.
Secondly, if China continues to link with USD in foreign exchange reserve policies, it will be encountered with even greater pressure of RMB appreciation. However, if China breaks off its link with USD, it will inevitably suffer from frequent exchange rate fluctuations and its export, which serves as the pillar of economic development in China, will suffer too.
Thirdly, as far as the foreign trade policies are concerned, the reduction of favorable balance of trade against America will lead to deterioration of the overall trade balance in China. In the first 9 months, the total favorable balance of trade was only $3.93 billion while that against America came to US$ 54.78 billion. On the other hand, realization of trade balance against America will be affected if its unfavorable trade balance cannot be reduced and America's greatest unfavorable trade balance originates from China.
5 Conclusion
In fine, there are both good and bad impact to our country. On the one hand,good to increase our country's export, attract foreign capital,decelerate the press of deflation.On the other hand,it also brought many problems such as the foreign debt burden of our country and pressure of RMB revalue etc. The point of our macroscopic policy is how to tend benefit to avoid to harm. Furthermore, international financial market change constantly, and the future trend of USD also has very big uncertainty. As a result,the effect to our country economic will also take place to change.So the question that how we should face the uncertainty impact to our ecomomy because of the future trend of USD to bring about Continuously quickly and healthily development still needs further research.
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