Appreciate the yuan depreciation
Updated: 2014-04-28 06:35
By Xu Qiyuan (China Daily)
|
|||||||||||
However, the depreciation of the yuan is an important change since the exchange rate reform of 2005. Some analysts believe the central bank pulled the trigger. Although it is controversial, it is undeniable that unilateral yuan appreciation is expected to smooth into a two-way volatility change over the years.
|
|
As for foreign trade enterprises, the exchange rate risks will not necessarily increase in the long term. The reason is simple: because 70 percent of China's exports cater to economies outside the United States. In the past, in order to maintain the stability of the yuan against the US dollar, there was always a compromise on the yuan's stability vis-a-vis the euro, Japanese yen, South Korean won and other currencies. In the next few years, the quantitative easing in the US will further weaken the yuan's dependence on the dollar and help stabilize the yuan's effective exchange rate.
In the international financial markets the yuan will have several new opportunities. Countries that have close economic and trade relations with China will soon take into consideration the yuan fluctuations in their exchange rate formulation mechanism.
The currency appreciation will also promote the offshore, onshore yuan exchange rate forward market, and the development of derivatives markets.
The author is secretary-general of the Center for International Financial Research under the Institute of World Economics and Politics at the Chinese Academy of Social Sciences. The views do not necessarily reflect those of China Daily.
Related Stories
US urged to 'understand' yuan issue 2014-04-17 08:46
PBOC boss sheds light on yuan exchange rate 2014-04-12 07:20
RMB to be global reserve currency by 2030: Economist 2014-04-09 23:51
US warns China over currency depreciation 2014-04-08 14:57
Reducing risks in yuan trading 2014-04-02 07:55
Appetite for yuan weakens as appreciation ends 2014-03-28 08:45
Today's Top News
Philippine pact gives US access to air, sea bases
Hunt resumes for bodies inside ferry
Ukrainian mayor wounded by gunfire
Alibaba IPO: Could be the biggest ever
Russia assures US it won't invade Ukraine
Japanese state minister visits Yasukuni shrine
Policeman's fake IDs spur investigations
Driver kills seven in E. China
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
Documents prove the truth can't be buried |
Race to remember story of resistance |
Strait talking: From enemy to friend |
Welcome to the world’s largest garbage dump |
The latest word on books: Keep those pages coming |
Uygurs learn what's in a name |