Staier: RMB Has Not Been Seriously Underestimated

< p > recently, Ben Staier Steil, director and senior researcher of the Department of international economics of the American Institute of foreign relations, entered the Fudan lecture hall with the book "currency war of Bretton Woods system", putting the new economic prospect in the picture of history. The comparison between reality and history is fascinating and thought-provoking: the Bretton Woods system established in 1944 is the biggest fight between the United States and the largest debtor country, Britain, the rising world leader, and the declining empire of the sunset. Today, the two sides have become the most creditor country of China and the largest debtor country of the United States in the 1944.

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< p > now, should we establish a brand new "Bretton Woods system" so that the monetary order can be readjusted according to the current economic and political realities?

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< p > in addition, the recent RMB depreciated to < a href= "//www.sjfzxm.com/news/index_c.asp" > USD < /a > 3%, and the US treasurer also had "verbal warning".

However, Staier firmly said: "I do not think that the renminbi is" seriously underestimated ".

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< p > < strong > New < a href= "//www.sjfzxm.com/news/index_c.asp > > Bretton Woods system < /a > < /strong > /p >

In 1944, the core theme of the Bretton Woods monetary conference was to stop the "currency war" and reconcile the conflicts of interest between creditors and debtor countries and contradictions. P

But the Bretton Woods conference is much more than that. As the largest creditor country in the world, the United States tried to reinvent the economic and political order of the world after the Second World War, according to the interests of the United States, in the interest of British bankruptcy as the largest debtor country in the world.

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Today, China has become the largest creditor country in the world, and the United States is the number one debtor nation. People wonder if China will become the United States at that time in the next few decades, and whether the United States will become a fallen British Empire. Is it possible to establish a brand new China led Bretton Woods system? < /p > p

< p > Staier's answer is No.

He said: "the United States, as a political and economic power, has not gone downhill in the true sense, and the current situation of the United States and Britain in the 40s of last century is very different."

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< p > Britain was bankrupt in the 40s of last century.

In the 30s of last century, Britain's debt to GDP ratio was 29%, and in 40s of last century it soared to 250%. At that time, no country was willing to accept the pound sterling valuation securities, so only the United States had a chance to turn it around.

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At present, Staier points out that the US dollar accounts for 60% of the world's foreign exchange reserves, while the yuan is only close to 5%. P

Although the debt situation of the United States is worrying, the United States has great room for its policy space compared with Britain at that time.

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< p >, he said that no agreement can be reached between China and the US.

China hopes that the exchange rate will be determined according to the international situation, while the United States hopes that the exchange rate will serve the interests of the United States.

The US legislation also clarifies the two major policy objectives of the Federal Reserve: maintaining price stability and achieving full employment.

It is clear that the United States has no intention of taking account of the financial stability of other countries.

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In short, P is not the United Kingdom of the year; for China, it does not intend to destroy the global purchasing power of its accumulated huge dollar assets.

Therefore, there is no urgent need for the two sides to move towards a new global monetary system in the short term.

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< p > < strong > < a > href= > //www.sjfzxm.com/news/index_c.asp > RMB > /a > has not been seriously underestimated < /strong > /p >

< p > this year, the RMB depreciated against the US dollar by about 3%.

Staier said: "I do not think that the renminbi is" seriously underestimated ". China's economy will slow down, and currency depreciation will undoubtedly support China's economy.

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< p > "I am different from many American economists. I do not think the renminbi has been seriously depreciated.

After China's interest rate liberalization, deposit interest rates will rise to attract deposits, while lending rates will gradually rise to maintain bank interest.

If the central bank does not act, the Chinese economy is indeed facing tight risk.

He believes that at present, the central bank has begun to worry about the slowdown in China's economy, so it is bound to take action to lower interest rates to lower the RMB exchange rate.

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< p > when asked about how China will open its capital account (or allow two-way investment), Staier said that as China's investment channels are limited, people will definitely seek overseas investment to diversify their assets. Whether the final effect of the "combined boxing" is RMB appreciation or depreciation is still hard to judge.

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In addition to P, Staier affirmed the firm pace of reform in China, but he believed that the hegemony of the US dollar could hardly be shaken in the short term.

The US dollar accounts for 60% of the world's foreign exchange reserves, and China is clearly unable to compete with it.

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"P," he said, "I don't think there are any potential rivals in the US dollar at present.

Of course, China is constantly advancing on the path of RMB internationalization, and the world's demand for RMB will also increase day by day.

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Staier P's last suggestion to China is to further deepen reform and strengthen the bond market to attract foreign investors.

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