The reform of RMB exchange rate over the past year has been successful on the whole. Firstly, the pressure of RMB appreciation has been released, and the flexibility of RMB exchange rate has been continuously enhanced. Second, the exchange rate reform is running smoothly and the exchange rate is basically stable. The impact of "medical reform" and RMB appreciation on China theoretically describes a concrete reality, and the economy and major economic sectors feel the impact of RMB appreciation. There are three important aspects to choose from.
First, the impact of RMB appreciation on monetary policy and banking and coping strategies
The monetary policy of the Bank of China is facing the severe challenge of excess liquidity. Commercial banks have obtained a large number of RMB positions in foreign exchange settlement and sale business, coupled with the strong growth of savings, the liquidity is obviously excessive. A considerable part of the increase in China's foreign exchange reserves is the expectation of RMB appreciation. The purpose of exchange rate reform is to provide a relatively relaxed environment and avoid the massive influx of international hot money. The central bank raises the cost of international speculative capital by lowering the market interest rate. But low interest rates and liquidity will lead to the spread of a series of problems.
For commercial banks, due to overcapacity in some industries and constraints such as capital adequacy ratio, excess funds have poured into the money market and bond market. The resulting market interest rate cannot reflect the actual situation of capital supply and demand, let alone play its important role in adjusting economic leverage. Commercial banks in China have a single asset structure, and the main source of profits is still the deposit and loan interest rates. In this case, the impulse to lend is always there, which may lead to a credit rebound and out-of-control investment.
In order to withdraw excess liquidity, we mainly issue central bank bills and repurchase, which makes the open market operation as a passive tool for foreign exchange hedging, and the independence and initiative of monetary policy have been greatly challenged and tested. Of course, on the contrary, the sharp appreciation of RMB will make China's international balance of payments more serious, which will lead to a more passive monetary policy. The expected increase in capital flow due to RMB appreciation will have at least two consequences: first, attract more international arbitrage and arbitrage capital to flow into China; Second, residents' willingness to hold foreign currency declined, and all foreign currency deposits were converted into RMB deposits. Residents' foreign currency savings deposits reached the highest value from $90.8 billion in June 2003, and fell to $65.7 billion by the end of the second quarter of 2006.
The impact of RMB appreciation on the banking industry is also obvious, and banks involve financial security and economic security. Goldman Sachs, an international investment bank, issued a report predicting that for every 65,438 0% appreciation of RMB, the profitability of China Bank will decrease by 3.3% and its net profit will decrease by 0.6%. In the first half of 2006 alone, the exchange loss of Dongfang was 24 billion yuan, and that of China Bank was as high as 35 billion yuan. However, before the expectation of RMB appreciation, the bank's asset-liability structure, income structure and profit model have not changed significantly. This is because the main business of China Bank is limited to domestic banks, so the monetary structure of assets, liabilities and income structure is only fine-tuned.
The appreciation of RMB has reduced the foreign currency deposits of domestic banks. Domestic foreign currency deposits accounted for 49.8% of the market. In the first half of the year, the domestic foreign currency savings deposits of China Bank were $3169 million, down more than $820 million year-on-year. Many people had expected that the appreciation of RMB would enhance the business continuity of bank settlement. However, since 2006, foreign exchange holdings have decreased compared with the same period in 2005, especially from August to early September 2006, the foreign exchange settlement of some banks decreased by about 10% year-on-year, on the contrary, the potential growth of some banks increased by about 10%. This is because after more than a year of RMB appreciation, many people think it will be a smooth process and gradually adapt to it. In addition, one of the main reasons is that foreign remittances have reduced the inflow of housing funds due to the regulation and the downturn in the property market. Besides China Bank, the most basic business in China is the banks listed in China, which have a small proportion of foreign currency assets and liabilities, and the foreign currency assets and liabilities of RMB assets and liabilities basically match, and the amount of international business including international settlement is small. Off-balance-sheet business usually produces risk exposure and uses derivatives to hedge. From the business point of view, the direct impact of appreciation is not significant.
In fact, the impact of RMB appreciation on the banking industry is reflected in the impact on the overall economy, which in turn affects the living environment of banks. Since last September, the appreciation of RMB has accelerated. In 2007 1 month, China's trade surplus was close to 159 billion US dollars, which was as high as 67% compared with last year's 1 month surplus of 9.49 billion US dollars. Facing the United States and Europe, the pressure of exchange rate fluctuation may expand in space, which puts forward higher requirements for the risk management level of domestic banks. It should be the consensus of banks to use various financial instruments to reduce market risks.
Second, the impact of RMB appreciation on import and export enterprises and coping strategies
The impact of RMB appreciation on different industries and enterprises mainly falls into three categories: the first category is industries that hold a large number of foreign currency-denominated assets or liabilities, such as aviation, electric power and telecommunications industries. Revaluation will lead to the depreciation of assets denominated in foreign currencies. Debt denominated in foreign currency will decline, thus reducing corporate debt. The second is product sales, the production cost structure of different industries. The concrete manifestations are as follows: first, the price is settled in RMB, and the raw materials purchased from abroad, such as paper, automobile and machinery industries, have reduced their production costs, which has increased the profits of enterprises due to the appreciation of RMB; Second, the price of products is settled in foreign currency, and the procurement of raw materials from abroad, such as petroleum, petrochemical, textile and steel industries, depends on whether the decline in procurement costs can make up for the losses caused by the decline in prices; Third, the price of products is settled in foreign currency, and raw materials are purchased from China, such as medicine, household appliances, chemicals and non-ferrous metals industries, which have the greatest negative impact. The third is industries that benefit indirectly, such as real estate, commercial real estate, airports, ports, railways, highways, electric power, water affairs and cable TV industries. As non-trading sectors, these industries are purely RMB-denominated assets. If the trend of RMB appreciation continues, the influx of foreign capital will promote asset price inflation (Xu Hong, 2006).
Import and export enterprises must take a multi-pronged approach, strengthen hedging ability and actively carry out exchange rate risk management. Different regions and different types of enterprises have different ways to avoid exchange rate risks. Under the guidance of banks and some new policies, measures and hedging tools, China's foreign exchange management departments form appropriate investment portfolios according to the products with different unemployment results. First, use financial instruments to hedge. At present, the exchange rate hedging products are mainly forward settlement and sale of foreign exchange, structured foreign exchange business, option trading, currency swap and so on. Forward settlement and sale of foreign exchange is the main risk in China's financial market, but its business requires high accuracy in judging the exchange rate trend. Using financial market tools to avoid exchange rate risk is a common fixed cost of foreign exchange business in international money market risk exposure. However, there is a certain gap between the hedging tools of financial institutions in China and the needs of enterprises in terms of product mix, design and fees. Financial institutions in China should also adapt to the needs of RMB exchange rate fluctuations and introduce more appropriate hedging products for corporate customers as soon as possible. The second is to avoid exchange rate risk through the choice of contract terms, including signing short-term contracts, contracts denominated in multiple currencies or directly in RMB, locking negotiation costs with fixed exchange rates, and settling accounts in advance or later. When signing a contract, foreign trade enterprises should add exchange rate risk clauses to the contract. In the case that the change of interest rate and exchange rate leads to the loss of enterprises, the implementation of the new regulations will ensure the profit rate of enterprises. For example, when the RMB appreciation clause is added to the contract, if the RMB appreciates to a certain extent during the supply period, the price will be readjusted. Third, trade financing is adopted to avoid exchange rate risks. The main types of financing in China are issuing letters of credit, export bills of lading, packaged loans, discounting foreign exchange bills, import bills of lading and international factoring financing. Trade financing can solve its liquidity problem more conveniently, such as obtaining foreign currency loans through export trade financing bills and settling them immediately, so as to meet the cash flow demand of shipment and foreign exchange collection during export, and at the same time avoid exchange rate risks. Fourth, use export credit insurance to avoid risks. Since the establishment of China Export Credit Insurance Corporation, thousands of enterprises have enjoyed convenient financing under export credit insurance, which directly avoided the loss of exchange rate fluctuation. Banks borrow money from insurance companies through The Export-Import Bank of China. Timely credit "insurance paper" products, sell bank bills in advance, and avoid foreign exchange risks.
Other tools to avoid exchange rate risks are: adjusting the proportion of imports and exports and increasing the proportion of domestic sales; Adjust import and export countries and regions to expand from a single market to multiple markets; The term of assets and liabilities matches the currency structure; Correct selection of currency, payment, exchange and settlement methods; Raise the price of export products; Use this non-US dollar currency.
Third, the impact of RMB appreciation on the real estate industry and coping strategies
The reason why real estate and banking are analyzed separately is because of housing.
Real estate is an important industry supporting people's livelihood, and it is directly related to financial security and macroeconomic security. Finance with banking as the main body is the core of modern economy, the instability of world economy and finance, the fragility of China's financial system, and the high degree of national security of China's financial security, but not at all.
In 2006, the national investment in real estate development was 1.9382 billion yuan, up by 21.8% year-on-year; The price of commercial housing rose by 1 1.04% year-on-year, among which high-grade commercial housing rose by 13.36% year-on-year, and the per capita income of urban residents nationwide rose by 1759 yuan year-on-year. Since 1998, the national housing sales price has increased by 6.5% annually, which is 5.9 percentage points higher than the annual increase of 0.6% in consumer price. The above figures clearly show that the current price is still high, indicating that the early real estate regulation did not achieve the expected results. Since 2004, the government has issued many policies to macro-control the real estate market, whether it is the land and credit control in 2004, the "National Eight Articles" in 2005 and the 9 13 real estate control policy jointly issued by the central ministries and commissions in 2006, including interest rates, "National Six Articles" and "foreign investment restrictions", etc., involving housing structure, land management, taxation and so on. The macro-control policies of the real estate market are numerous, small and all-round, which is unprecedented. But why is the regulatory effect not ideal?
In my opinion, the accelerated appreciation of RMB has had a considerable impact on the control of the real estate market. Because RMB is not freely convertible under capital account, a lot of hot money comes in to buy real estate through various channels and means, especially in Beijing and key cities in the southeast coast with unlimited prospects. In this way, housing prices and RMB appreciation coexist, and foreign investment benefits both. Since last year, there have been a large number of real estate projects and corporate background acquisitions in Shanghai, and some foreigners and overseas Chinese are one of the manifestations of buying real estate in large quantities; From the domestic situation, with the increasing regulation of the real estate market, real estate stocks have risen sharply, which cannot be said to have nothing to do with the appreciation of the RMB. Now, accelerating the appreciation of the renminbi will aggravate this behavior.
Therefore, we must strengthen the management of foreign investors in the real estate market in China and make necessary restrictions to prevent some foreign hot money from entering the real estate market in China. The State Administration of Foreign Exchange and the Ministry of Construction promulgated the "Regulations on Strengthening Foreign Exchange Management in the Real Estate Market" in the second half of last year to regulate the purchase of domestic real estate by overseas institutions and individuals. It is a capital project for institutions and individuals to purchase real estate abroad, but the real estate market in China has developed for less than ten years. No matter from which angle, the real estate market in China should be a consumer goods market, and it is also an international practice to manage it according to the principle of self-use and needs. China's capital account has not been fully opened, and the government's monitoring and restriction of hot money speculation in the housing market will prove that any speculative real estate market and its profits have to be stopped by various policies.
However, regulation is not only to curb the price of the real estate market. Due to the strong domestic housing demand and the relative shortage of housing supply, the key to determining the rise in housing prices is the rationality of housing prices. In other words, the housing consumption capacity of low-and middle-income residents continues to improve with the increase of housing prices relative to their income. Moreover, according to 1 1, the quarterly report released by the Bank for International Settlements (BIS) in February 2006/kloc-0, China's housing loan market reached US$ 227 billion, ranking first in Asia. If the real estate price falls sharply, the value of the own mortgage loans held by banks will be reduced, which will affect the real estate loans, which will push the real estate price down further and trigger financial risks. Therefore, how to keep house prices within a reasonable range, so as to prevent financial risks to the maximum extent, and achieve a win-win situation of restraining house prices and preventing risks will depend on the management wisdom and design art of the public administration system, which is the targeted implementation of out-of-control measures and policies.