People’s Bank of China published the statement on improving the quotation of the middle exchange rate of RMB against the U.S. dollar on August 11. RMB depreciates against US dollars almost 4.6% in 4 days. This is the biased correction between the middle quotation and the market exchange rate during this period and an import step of the market-oriented reform of the RMB exchange rate formation mechanism. This will enable the RMB exchange rate to operate according to the more market-oriented rules in the future.
The heads of the Department of Foreign Investment Administration of the MOFCOM pointed out that since the launch of the exchange rate formation mechanism in July 2005, the RMB exchange rate has continued to appreciate. Especially from January 2014 to June 2015, the effective exchange rate of RMB rose 9.5%, but that of Euro, Yen, Australian Dollar, Brazilian Real and Ruble decreased 10.8%, 9.3%, 5.3%, 8.3% and 17.7% respectively. RMB also appreciates against English pound, Korean Won, South African rand and Indian rupee, and only depreciates slightly against the US dollars in the main global currency. The continuous appreciation of the exchange rate of RMB causes a certain pressure to foreign trade export. According to the questionnaire survey of 6,000 enterprises, the important factors affecting the current export are: the low demand of the international market, the continuous rising cost of the domestic producing factors, the long-time appreciation of the real effective exchange rate of RMB, the difficulty of the industry, the transference of industries and orders, and the difficulty and the expensiveness of financing .
The Head pointed out that since this year, our foreign trade situation has been more complex and severe and the downward trend has been increasing. In the first half year, the foreign trade export went up 0.9%, better than the major economies and new emerging market countries globally. According to the statistics of the WTO, in the previous 6 months, exports of the United States, Japan, Korea, India, South Africa and Brazil went down 5.2%, 8.1%, 5.1%, 16%, 6.4% and 14.7% respectively. In July, although the export decreased greatly, it was still in the normal fluctuating range getting rid of the factor of the raised base number due to the abnormal growth at the same period last year. On the whole, the adjustment of the export structure still remains a favorable momentum, the international market shares of China still increases steadily and the fundamentals of the foreign trade development of China have not yet changed.
The head emphasized that the improvement of the middle quotation of the RMB against the U.S. dollar exerts different influences on different enterprises. The export-oriented enterprises will benefit from this, the import-oriented enterprises will improve the cost of foreign exchange accordingly and some enterprises with heavy assets and high dollars in debts will be affected. Specially, against the background of the global value chain, as the cross-regional upstream and downstream division and the trade within the industries exist universally, the currency fluctuation of some economy and its influence on import and export will rapidly conduct to other economies within the chain and the pulling effect of the depreciation of the currency on export will be shared and weakened. From the situation of the currency depreciation of some major economies, the pulling effect on the export should be far lesser than the depreciation degree. China is a big country of import and export with big proportion of the processing trade and the adjustment of the exchange rate of RMB at this time is normal. Its influence on the foreign trade should not be read too much.
The head said that at current, the international environment and the domestic development condition of the foreign trade development of China have changed greatly. Faced with the new situation and challenge, efforts should be made to stabilize the growth, unswervingly adjust the structure, firmly seize the main line of transforming the foreign trade development mode, depend on being driven by the innovation, consolidate the traditional advantages of the foreign trade, accelerate cultivating the new competitive advantages centering on the technology, brand, quality and service and improve the quality and benefit of the development. The continuously sound development of the foreign trade of China not only conduces to the development of the Chinese economy, but also conduces to driving the development of the world economy and creating opportunities for all countries.
