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Zhou Xiaochuan: the continued depreciation of the RMB is no basis

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Core Tip:To express an opinion: Why do you say, Zhou was so analysis.First, look at the overall economic situation: still a reaso
 To express an opinion: Why do you say, Zhou was so analysis.
First, look at the overall economic situation: still a reasonable range
2015 China's economy maintained 6.9% growth in the world is still a high level. Changes in China's economic growth, there are reasons for weak global economic growth, but also the Chinese government take the initiative to adjust the results structure is conducive to China's economy more sustainable, higher quality growth, but also conducive to global economic rebalancing.
Second, why optimistic about the Chinese economy: investment, trade, manufacturing and services still power
Now Chinese national savings rate remains high, will bring high investment, this relationship continues to exist. Although trade has been transferred comparative advantage, but through the transformation and upgrading to high-end, China's manufacturing industry is still a huge advantage. Short-term adjustment of the manufacturing sector, in part because environmental protection requirements, to reduce the "two high" type of expansion. The service sector share of GDP grew from 43% to over 50% in 2015, the space is still huge.
Third, look at the exchange rate, concern two indicators: the current account, the real effective exchange rate
2015 China's current account surplus remains high, wher the goods trade surplus of $ 598.1 billion, a record high. United States and Japan's inflation target is 2%. China at the end of 2015 the consumer price index was 1.4% for China is relatively low inflation. Inflation is conducive to stability of the currency. In addition, capital projects, capital projects involving direct investment substantially more stable foreign direct investment some fluctuations but stable.
Fourth, talk about international factors: lack of fear of international speculative forces
Recently, the focus of international speculative forces sing the air China, in fact, these speculative forces always find some hot spots to bet, just find the slowdown in Chinese economic growth in 2015 and financial market volatility. The problem is that before such speculation weaker, after the global financial crisis sharply after the major economies of quantitative easing, it is a surprising number of spare cash. Chinese economy not in the end line? We are confident patience, waiting for data continue to speak out. Course, but also understand that this is a note for the next person is of no use, they are eager to create public opinion in an attempt to see the outcome as soon as possible Forced game.
The recent global financial market uncertainty factors, and normal periods and different, indeed in some speculative forces targeting China. Under normal circumstances, the international speculators do not regard China as a target. Chinese economy capacity, more resources, to fight with China, is not easy to make money. In fact, China has for many years primarily inflows, some of which may be "hot money" will choose to withdraw, nothing strange.
Fifth, how to treat and deal with the Bank of speculative forces?
There are speculative forces is not surprising, it is sometimes difficult to distinguish between speculative and risk management operations on the market. China has the world's largest foreign exchange reserves, we will not allow speculative forces dominate the market sentiment. Of course, not speculative forces dominate the market sentiment, does not mean it will be a positive check, to consider the effective use of ammunition, cost minimization problem. Further reform the exchange rate formation mechanism in itself contribute to more flexibly respond to market speculation strength. If the past is hold fixed exchange rate does not move "Steel Shield", a flexible exchange rate becomes a "sponge shield" for excessive speculative forces, offensive and defensive can do in there.
Six, capital controls will not increase? Strong?
Someone said recently that China should implement this kind of exchange control measures, some of which are obviously rumors, the general population and is generally used in the manufacture intermediate traders panic, acting in cooperation with the speculative bets disc. Even some rumors aimed at current, rather than capital projects. For example, there are rumors that the foreign exchange bureau should be limited to foreign profit remittances, notes this is the current account has been allowed, the amount of foreign exchange bureau never had any control. Capital projects, corporate mergers and acquisitions overseas, set up subsidiaries and representative offices can also follow the normal procedures swap. Financial markets and the real economy is different from the majority of cases are confident playing cards.
Any inappropriate regulatory entity will give trade inconvenience and distress it, it would affect the confidence and the balance of payments. Moreover, due to the high degree of openness, a detour is not uncommon commonplace. We will carefully grasp reasonable and feasible balance between law enforcement, management and maintenance of trade and investment facilitation and openness of existing laws and regulations.
Zhou Xiaochuan said the yuan exchange rate reform unswervingly.
View: greater reliance on market forces to determine prices, to achieve a more flexible exchange rate.
Direction: market supply and demand with reference to a basket of currencies, the implementation of managed floating exchange rate mechanism.
wherin the supply and demand aspects, Zhou stressed that even if there is short-term speculative market forces, also still have to respect the market, the central bank did not mind a model calculation of the optimal exchange rate.
Why is the implementation of managed floating exchange rate mechanism? Zhou said, we have always believed, is not one hundred percent use of the efficient market hypothesis, market sometimes appear defect is dominated by short-term speculative forces or emotional and herding. We hope and strive to achieve exchange rate "basically stable at a reasonable and balanced level", which is the interaction. Although difficult to accurately measure the equilibrium level, but only in the vicinity will have a reasonable and balanced level basically stable.
How to change a basket of currencies? The RMB exchange rate formation mechanism is not pegged to the dollar, but it is not free-floating. In the foreseeable future, to increase the intensity of a basket of currencies, a basket that maintain the basic stability of the exchange rate, the RMB exchange rate formation mechanism of the main tone. Reforming our exchange rate formation mechanism, the effect will be significantly enhanced by reference to a basket of currencies, but it is not pegged to a basket, because factors affecting the exchange rate, or more. The future will be the introduction of macroeconomic data on the exchange rate mechanism play a role. The central bank will strengthen communication with the market, enhance the role of the renminbi index data to a basket of currencies market to determine the effectiveness of the mechanism.
The last important reminder is:
Our high school from the international financial crisis in 2008 the US subprime mortgage crisis began that the US housing market, subprime shadow banking cross-infection, shock too. Between domestic stock, bond, foreign exchange, money market and other market segments have mutually spill impact, price distortions are essentially healthy sexual interaction, between the foam and toughness. China also has cross-infection of the soil. To this end, the reform must be window selection, emphasis on timing, coordination and operation skills. Some reforms are afraid of growing slowly afraid stations, not "a being bitten, twice shy." Of course, but also to prevent the other extreme, the international experience shows that on the "transition trap" and "reform fatigue" to be more careful. (Source: China National Garment Association Network)
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