Economics

中国的汇率愚行

Sep 11, 2015 Barry Eichengreen

发自伯克利——八月十一日，中国将其人民币汇率下调了2%并稍微改革了其汇率体系。这并不算是什么石破天惊的事件，但金融市场的反应却仿佛是被陨石击中了。这一负面反应也不是什么意外：因为中国的货币贬值措施也堪称是如何拒不实施汇率政策的教科书式案例。

该国政府的其中一个动机估计是将推动不断放缓的经济。虽然占就业大多数的服务部门情况依然相对不错，但该国可贸易商品的生产——许多供出口——却遭遇大幅下滑。中国的出口商如今正困在弱势国外需求和迅速攀升的国内工资水平的夹缝中。

对于这些问题，贬值是一个屡试不爽的解决方案。但考虑到中国制造业的工资水平年均10%的增长，仅仅2%的币值变化有点似杯水车薪。

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0 Comments on this paragraph, 9 Comments on this article

Barry McHugh Dec 17, 2015

Are economists being sophisticated enough in viewing the real US rates we have (nominal + CDS insurance - covered interest rate parity factor, which could result in the real effective 'fungible rate' being under 3% in the US). If that is true, we need someone to unpack whether households can become more Leveraged than corporates in a country merely because they are less affected by covered interest rate parity outcomes and vice versa. If this is true we may have the mix of these factors wrong and yet have scope to extend economic growth through their remedy. Realistically though, these finance cost outcomes may whipsaw in favour of households, against, then back again so that the regulators could never keep up. It is an interesting question though.
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PATRICK TERROIR Sep 27, 2015

May I remark that when looking at foreign exchange we have to look at the whole picture. If there is a small "devaluation" of the renmimbi against the dollar, it should also be noted that the remimbi has appreciated of approximately 20% against the euro since August 2014. So in my view the central question for the Chinese is the method to fix their exchange rate as the European Union is the first commercial partner of China - before the US.
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Marc Torras Sep 18, 2015

Well it's official, China is dictating the US economical policy now.

The depreciation of the RMB was a very well planned move, and had 3 aims:

First and most important, it was a warning to the FED. It's important to note that China's number 1 commercial partner is Europe, and Japan is a key partner too. So China's exports are suffering and one of the key reasons is the appreciation of the USD (and the RMB linked with it). Seen from anywhere outside the US, it makes no sense that China continues its currency peg with the USD. So the depreciation of the RMB is foremost a warning to the FED: "You increase rates and the USD appreciates. we will not follow." The FED got the message.

Second, China wants to be included in the SDR club. There are many reasons for them to want this, but the basic one right now is marketing. China is in a complicated moment, moving from an industry based to a service based economy. This is causing tensions, investors are leaving the country and China is not mature yet to keep the growth by itself. Being included into the SDR would reassure a lot of investors (chinese government would make sure to make a big deal about it)

Third, the moves help exporters, who are struggling due to the USD appreciation. 5% is not much compared with the 25% increase of lately, but a bit of extra room to breath is good, and it shows all the Chinese industrial sector that they care for them

As for the markets... they are inherently stupid, maybe will go down but will forget and buy China at the first good news. The bubble-crash of 2006 was much bigger than the current one and the consequences were not so big, basically because in China the relation between company (or economy) performance and stock value is non existant.
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Edwin Truman Sep 12, 2015

Barry is quite right. The RMB is not now a Freely Usable Currency as I have written http://blogs.piie.com/realtime/?p=5141 and China's leaders are pursuing a Faustian Bargain in focusing on the SDR and external financial liberalization when the focus should be internal financial reform http://blogs.piie.com/china/?p=4499
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Henry Rech Sep 11, 2015

" the market will win in the end"

China could beat the market if its international reserves are large enough, if it is willing to exhaust its international reserves and if it can stabilize its internal economy before its reserves are exhausted. Probably too many big "ifs".
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Kenneth Pao Sep 11, 2015

This article failed to address one other probable motive of the PBOC that, of sending a message to the US Fed, BOJ and ECB, if PBOC were to devalue the Renminbi to the full extent that the market was expecting than the world would be forced into round 2 of currency devaluation that got started by the Fed's QE actions.

Therefore what PBOC is really doing is that China is telling the US to stop telling China how to manage its economy and that the world currencies devaluation must end now.
- Henry Rech Sep 11, 2015
  
  " China is telling the US to stop telling China how to manage its economy"
  
  It seems to me that the US has done what it has done because it sees this as being in the best interests of its economy - not a way of telling China what to do. The renminbi is under pressure because China's economy is underperforming and because the US economy is recovering.
  
  "the world currencies devaluation must end now"
  "if PBOC were to devalue the Renminbi to the full extent that the market was expecting"
  
  If China wants to integrate into the world economy then it has to give up the notion that it can be in control (in the way it controls its own internal economy). It can't have it both ways. Thinking it can enhance its prestige in markets by SDRizing its currency is a mindset typical of a regime not used to operating in a market environment.
  
  Piecemeal adjustments to its currency, as Barry Eichengreen argues, is the worst thing it could do. Either free float or belt down expectations with a significant devaluation. Unless China shuts the gate completely, the market will win in the end. The pressures for devaluation will become unbearable.
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Paul Daley Sep 11, 2015

Come now. When China forces a devaluation against the dollar, U.S. markets should respond with some movement in interest rates, but interest rates are locked by Fed policy, so asset prices have to adjust.

Whose fault is that?
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中国的汇率愚行

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