The impact of financial storm on virtual currency
Publish: 2021-04-27 06:58:42
1. Generally speaking, it will make the currency devalue
because the economic crisis and financial crisis will cause people's panic and lack of investment confidence
which will lead to a vicious circle of currency liquidity trap (the more people dare not invest, the more vulnerable the market is, the more people dare not invest)
authority (the government, the market, the more vulnerable the market is) In order to get rid of the crisis, the central bank will lend or print a lot of money to create liquidity for the market and stimulate the improvement and development of the economy.
as soon as there is a flood of liquidity and a lot of money, the price of goods marked with money will definitely be raised, and the money is worthless.
therefore, generally speaking, the currency will be devalued
because the economic crisis and financial crisis will cause people's panic and lack of investment confidence
which will lead to a vicious circle of currency liquidity trap (the more people dare not invest, the more vulnerable the market is, the more people dare not invest)
authority (the government, the market, the more vulnerable the market is) In order to get rid of the crisis, the central bank will lend or print a lot of money to create liquidity for the market and stimulate the improvement and development of the economy.
as soon as there is a flood of liquidity and a lot of money, the price of goods marked with money will definitely be raised, and the money is worthless.
therefore, generally speaking, the currency will be devalued
2. Let me answer you like this! First of all, you need to understand who Soros is? You must not regard him as a person who operates in China. He is much more powerful than those Chinese makers. I'm sorry to say that the level of our Chinese makers is too low, and he will put himself in. What about Soros? When he attacks the currency of any country, he always has some preparation and basic hard conditions. For example, his huge ability to use funds within one day is amazing, and his relationship with the US government and Wall Street is incomparable to ordinary people. The most important point is that his operation method is too complicated, Don't I recommend watching financial alchemy? This is his book, and his philosophy is very complicated! Ordinary people can't understand it at all. He read all kinds of knowledge, even the policy information of various countries, and he firmly grasped it. He also raised a large number of media in the United States, which are valuable to him. These media are disseminators. When he sniped the Thai baht from May to July 1997, he made a profit of $2 billion. How did he do it? When he sniped at the Thai baht, it happened that Thailand changed the fixed exchange rate into a floating exchange rate on that day. Simply speaking, because of this, it was very important, so he sold a lot of short of the Thai baht on that day, so naturally the Thai baht depreciated! Then a large number of speculators in Europe and the United States squeezed their funds into the foreign exchange market and sold short. Because of this, the four tigers and the four dragons in 1997 almost died! I'll introce you to another way of sniping Hong Kong. In fact, it wasn't the Hong Kong dollar that he sniped at that time, because the Hong Kong dollar can't be sniped. The Hong Kong dollar against the US dollar uses the linked exchange rate system. What about the issuance of the Hong Kong dollar? It is also based on US dollars. In short, it means how many US dollars are deposited and how many Hong Kong dollars are issued. It can be said that Hong Kong dollars is the voucher for us dollars. It is a US dollar standard system, so it is difficult to snipe. But it Snipes. Do you know why? Drunk man's intention is not wine, this is the master! He also used the short selling method to snipe at the Hong Kong dollar. Once he sniped, the Hong Kong government was scared, so it was not allowed to borrow the Hong Kong dollar, and the inter-bank lending rate was raised, which was very high, as high as 268%. In order not to let Soros get the Hong Kong dollar to repay his short selling Hong Kong dollar, he would lose money, you know! So that's what the Hong Kong government did at that time. However, you should know, as soon as the interest rate rises, the stock market will start to fall sharply. This is inevitable. Soros made a lot of money in the stock market this time. In order to make up for his short selling loss, he actually sold short the Hang Seng Index Futures in Hong Kong in advance, and then attacked the Hong Kong dollar, Then, as soon as the interest rate rose, the stock market fell sharply, and he benefited from it. However, his loss when he sniped the Hong Kong dollar was nothing at all. He made a lot of money in Hang Seng Index Futures. This is his complete operation. It can be said that it's too classic. After the research, he found that he was really a master and had nothing to say! So the target of his attack is actually the Hang Seng Index, not the Hong Kong dollar. That's fake! After his attack, house prices also fell sharply, causing depression and crisis! This is him. He has a lot of history. You can go back and have a look at it. For example, he led the sniping at the Bank of England, bull! That's about it. Of course, there are still some things, such as how to make you generate inflation after he Snipes. It's very complicated. We need to use political power! So I'll introce it first!
3.
If you are in the urban area of Chaozhou, take a passenger car to Shantou CTS passenger station. After that, you can walk to the bus
if you only get to Shantou bus terminus, you need to take bus No.30 to Shantou No.1 middle school at bus terminus or bus terminus north bus stop (please read the following notes)
(Note: as the road of Shanzhang interchange is being closed in 2017, No.30 is diverted. So you have to get off at Shantou CTS bus station (you can also take bus No.28 or 39 at this station), and then walk there (as shown in the figure above))
4. Be more confident
5. Tailored! I've read this paper too
currency crisis is a kind of financial crisis, which refers to the situation that the impact on the currency leads to the substantial depreciation of the currency or the sharp decline of international reserves. It includes the successful impact on a certain currency (that is, the substantial depreciation of the currency), It also includes an unsuccessful shock to a currency (that is, it only leads to a substantial decline in the country's international reserves but not a substantial depreciation of the currency). For each country, the degree of currency crisis can be measured by the index of foreign exchange market pressure, which is the weighted average of the monthly change rate of exchange rate (calculated by the direct pricing method) and the monthly change rate of international reserves. When the index exceeds its average by three times the mean square deviation, it is regarded as a currency crisis
or, from another popular point of view, a currency crisis is a situation in which people lose confidence in a country's currency and sell off a large amount of that country's currency, resulting in a sharp depreciation of the exchange rate of that country's currency in a short period of time. For example, the exchange rate between the Mexican peso and the US dollar in 1994 and the exchange rate between the Thai baht and the US dollar in 1997 dropped sharply, both of which are typical currency crises<
to explain how the currency crisis impacted the international financial market,
let's take a look at three examples first:
example 1: the Thai baht crisis in 1997. On the domestic side, Thailand's economy will face a series of austerity measures in the short term. Tax increase, price control, monetary contraction and other means will be used, and the reced economic growth rate will be further reced; On the international side, the Thai baht storm spread to neighboring countries such as Malaysia, Indonesia and the Philippines, where the exchange rate of stock market fell in two months. Compared with the exchange rate against the US dollar at the end of June, at the beginning of September, the Thai baht fell more than 36 (33%), the Malaysian ringgit to 2.94 (17%), the Philippine pesoda to 31.70 (20%) and the Indonesian rupiah to more than 3000 (nearly 24%). One stone hit a thousand waves, affecting all aspects of Thailand's domestic and foreign economy
in the autumn of 1992, when the benchmark exchange rate of the pound and the European exchange rate mechanism was attacked by speculation, the Italian lira was accompanied. On September 15 of the year known as "Black Wednesday", both the pound and the lira withdrew from the European exchange rate mechanism. Subsequently, the Irish pound and French franc, which remained in the European exchange rate mechanism, were attacked and the exchange rate fluctuated sharply< When the Mexican Peso devalued sharply at the end of 1994, the exchange rates of Argentina, Brazil and the Philippines in South America fluctuated strongly against the US dollar. Later, South Africa, as far away as the horn of Africa, also experienced exchange rate turbulence
conclusion: the above examples show that the contemporary international economic society rarely sees an isolated currency turmoil. One country's currency crisis often affects other countries
the spread of currency crisis in the international community is called "contagion effect"
next, let's explain how the currency crisis impacts the international financial market through the "contagion effect" and causes the financial crisis:
first, the exchange rate is always related to more than two economies. After the devaluation of a country's currency, for example, against the US dollar, the external price competitiveness of the country's goods will increase, and the competitors will be in a disadvantageous position in the international market. If the latter wants to improve its own situation, it will also cause the devaluation of its currency< Second, in the international money market, investors are analytical minded and understand the economic information of various countries; Once they see a currency crisis in a country, they will think of countries with similar macro-economic conditions and withdraw funds from these countries in case of accidents; As a result, their divestment really led to the spread of the currency crisis
thirdly, when a currency crisis occurs in a country, some institutional investors and international companies will suffer losses, or at least affect their asset liquidity; To offset this effect, they will withdraw funds from other countries' markets, that is, they will sell their local currencies in exchange for highly liquid international currencies; The result, like the second, is more money market turbulence
when the currency value of the whole region depreciates greatly, people will be more pessimistic about the future of the economy, the total economic volume and economic scale will have a greater loss, and the economic growth will be hit, which will be accompanied by a large number of business failures, rising unemployment rate, and the general economic depression, Sometimes it is accompanied by social unrest or national political unrest. This is the process that the currency crisis impacts the international financial market and leads to the financial crisis
conclusion: monetary crisis is the driving force of financial crisis
answer: letter from maple leaf - Magic apprentice level 1 10-27 10:19
currency crisis is a kind of financial crisis, which refers to the situation that the impact on the currency leads to the substantial depreciation of the currency or the sharp decline of international reserves. It includes the successful impact on a certain currency (that is, the substantial depreciation of the currency), It also includes an unsuccessful shock to a currency (that is, it only leads to a substantial decline in the country's international reserves but not a substantial depreciation of the currency). For each country, the degree of currency crisis can be measured by the index of foreign exchange market pressure, which is the weighted average of the monthly change rate of exchange rate (calculated by the direct pricing method) and the monthly change rate of international reserves. When the index exceeds its average by three times the mean square deviation, it is regarded as a currency crisis
or, from another popular point of view, a currency crisis is a situation in which people lose confidence in a country's currency and sell off a large amount of that country's currency, resulting in a sharp depreciation of the exchange rate of that country's currency in a short period of time. For example, the exchange rate between the Mexican peso and the US dollar in 1994 and the exchange rate between the Thai baht and the US dollar in 1997 dropped sharply, both of which are typical currency crises<
to explain how the currency crisis impacted the international financial market,
let's take a look at three examples first:
example 1: the Thai baht crisis in 1997. On the domestic side, Thailand's economy will face a series of austerity measures in the short term. Tax increase, price control, monetary contraction and other means will be used, and the reced economic growth rate will be further reced; On the international side, the Thai baht storm spread to neighboring countries such as Malaysia, Indonesia and the Philippines, where the exchange rate of stock market fell in two months. Compared with the exchange rate against the US dollar at the end of June, at the beginning of September, the Thai baht fell more than 36 (33%), the Malaysian ringgit to 2.94 (17%), the Philippine pesoda to 31.70 (20%) and the Indonesian rupiah to more than 3000 (nearly 24%). One stone hit a thousand waves, affecting all aspects of Thailand's domestic and foreign economy
in the autumn of 1992, when the benchmark exchange rate of the pound and the European exchange rate mechanism was attacked by speculation, the Italian lira was accompanied. On September 15 of the year known as "Black Wednesday", both the pound and the lira withdrew from the European exchange rate mechanism. Subsequently, the Irish pound and French franc, which remained in the European exchange rate mechanism, were attacked and the exchange rate fluctuated sharply< When the Mexican Peso devalued sharply at the end of 1994, the exchange rates of Argentina, Brazil and the Philippines in South America fluctuated strongly against the US dollar. Later, South Africa, as far away as the horn of Africa, also experienced exchange rate turbulence
conclusion: the above examples show that the contemporary international economic society rarely sees an isolated currency turmoil. One country's currency crisis often affects other countries
the spread of currency crisis in the international community is called "contagion effect"
next, let's explain how the currency crisis impacts the international financial market through the "contagion effect" and causes the financial crisis:
first, the exchange rate is always related to more than two economies. After the devaluation of a country's currency, for example, against the US dollar, the external price competitiveness of the country's goods will increase, and the competitors will be in a disadvantageous position in the international market. If the latter wants to improve its own situation, it will also cause the devaluation of its currency< Second, in the international money market, investors are analytical minded and understand the economic information of various countries; Once they see a currency crisis in a country, they will think of countries with similar macro-economic conditions and withdraw funds from these countries in case of accidents; As a result, their divestment really led to the spread of the currency crisis
thirdly, when a currency crisis occurs in a country, some institutional investors and international companies will suffer losses, or at least affect their asset liquidity; To offset this effect, they will withdraw funds from other countries' markets, that is, they will sell their local currencies in exchange for highly liquid international currencies; The result, like the second, is more money market turbulence
when the currency value of the whole region depreciates greatly, people will be more pessimistic about the future of the economy, the total economic volume and economic scale will have a greater loss, and the economic growth will be hit, which will be accompanied by a large number of business failures, rising unemployment rate, and the general economic depression, Sometimes it is accompanied by social unrest or national political unrest. This is the process that the currency crisis impacts the international financial market and leads to the financial crisis
conclusion: monetary crisis is the driving force of financial crisis
answer: letter from maple leaf - Magic apprentice level 1 10-27 10:19
6. In 1997, Soros and others devalued the currencies of Southeast Asian countries through free exchange transactions in Asia. At that time, China was not yet open to free exchange, and the non depreciation of RMB could maintain China's own capital and stabilize the national economy. If RMB does not depreciate, Southeast Asian countries can stabilize their exchange rates by borrowing foreign exchange from China. That's about it
specifically, you can use the Internet "Asian financial crisis" http://ke..com/view/43874.htm?fr=aladdin
specifically, you can use the Internet "Asian financial crisis" http://ke..com/view/43874.htm?fr=aladdin
7. The impact of the financial crisis on the trend of RMB exchange rate
http://www.dic123.com/pd_ 4de0f8bd-1357-4eec-a49e-7180026e5114. HTML
in recent international summits, a semi open topic is to make RMB an international reserve currency. In China, this topic is discussed more hotly. Wu Xiaoling, deputy director of the finance and Economics Committee of the National People's Congress, said that e to the lack of a second currency to replace the US dollar, China's huge foreign exchange reserves would face the risk of shrinking if the US cut interest rates. Therefore, we should graally let RMB become an international settlement currency and speed up the process of RMB becoming an international reserve currency
the real risk is not to cut interest rates in the United States. The economic risk of the United States can no longer be rescued by monetary policy. The 1% interest rate level has limited the space for rection. Moreover, the United States must consider the negative impact of the depreciation of the US dollar on its issuance of treasury bonds next year. Of course, the idea of temporarily strengthening the dollar is likely to fail after the issuance of treasury bonds< br /> http://www.chinatimes.cc/huaxiasl/hxsp/200811/20081122222503.html
http://www.dic123.com/pd_ 4de0f8bd-1357-4eec-a49e-7180026e5114. HTML
in recent international summits, a semi open topic is to make RMB an international reserve currency. In China, this topic is discussed more hotly. Wu Xiaoling, deputy director of the finance and Economics Committee of the National People's Congress, said that e to the lack of a second currency to replace the US dollar, China's huge foreign exchange reserves would face the risk of shrinking if the US cut interest rates. Therefore, we should graally let RMB become an international settlement currency and speed up the process of RMB becoming an international reserve currency
the real risk is not to cut interest rates in the United States. The economic risk of the United States can no longer be rescued by monetary policy. The 1% interest rate level has limited the space for rection. Moreover, the United States must consider the negative impact of the depreciation of the US dollar on its issuance of treasury bonds next year. Of course, the idea of temporarily strengthening the dollar is likely to fail after the issuance of treasury bonds< br /> http://www.chinatimes.cc/huaxiasl/hxsp/200811/20081122222503.html
8. Lost in 1997, the hedge funds of American financial tycoon Soros launched a series of attacks on Southeast Asian countries, shocking the world. After sweeping Southeast Asian countries, Soros turned to Hong Kong, China. So how did Soros do it
Soros was short selling Hong Kong dollars in New York at 12:00 in the middle of the night{ It seems that our stock market announced the increase of stamp ty at midnight at 5.30 that year. What is short selling? Today, I lent a stock to a securities company. Today, I sold it at 100 yuan. Tomorrow, when the stock price dropped to 60 yuan, I bought it back to the securities company. Because I sold it at 100 yuan and bought it at 60 yuan, I made 40 yuan. Our stock is to rise in order to make money, short selling? You have to go down to make money
therefore, Soros's purpose of short selling the Hong Kong dollar is to attack the Hong Kong dollar and bet on the decline of the Hong Kong dollar! Like short selling stocks, as long as the Hong Kong dollar falls, it can make money. However, it is unreasonable for Soros to do so, because the exchange rate system in Hong Kong is very strange. He does not simply fix the exchange rate, but links the exchange rate with the US dollar
what is a fixed exchange rate? Fixed exchange rate means that the government sets a foreign exchange price, such as one dollar for seven yuan. If the price of US dollar is high, the government will sell US dollar to suppress the price of US dollar, and buy RMB to raise the price. The government will maintain the exchange rate by buying and selling US dollar foreign exchange, keeping one US dollar for seven RMB
but Hong Kong is not. Hong Kong is linked exchange rate. What is linked exchange rate? It is different from the fixed exchange rate, that is, the three note issuing banks in Hong Kong, including HSBC, Standard Chartered Bank and Bank of China, as long as they want to issue Hong Kong dollars, they must first deposit US dollars to the Hong Kong Monetary Authority, that is to say, I have to deposit US $100 to the monetary authority before the bank can issue HK $750. If we don't deposit US dollars, we can't issue Hong Kong dollars. This is the linked exchange rate. It's almost the only one in the world. Unlike China, China does not need to keep dollars in issuing renminbi, theoretically, how much RMB Chinese mainland government wants to print. But Hong Kong is not. Hong Kong has to deposit US dollars in order to issue Hong Kong dollars. In this way, Hong Kong dollar is actually a voucher for us dollar
since Hong Kong dollar is the veiled US dollar, how can Soros sell short? How could he fight the dollar? What about US dollar snipers? Unless Soros doesn't want to live, the US government will surely arrest him. It's not reasonable for you. Soros always uses different currencies to snipe? is it? So he couldn't have made it, but it scared us, my God! It's over. It's over. Soros is going to snipe us
therefore, the Hong Kong Monetary Authority made a decision on the spot, saying that it was not allowed to borrow or lend energy. That is to say, Soros sold short Hong Kong dollars at a high price today, and he will buy back Hong Kong dollars tomorrow. Right, but he sold Hong Kong dollars today and asked him to return it tomorrow. He can't buy Hong Kong dollars. He can't pay it back. Isn't Soros a breach of contract and will have to pay a fine? Then you failed to snipe the Hong Kong dollar? Don't we just beat it? So at this time, we did a very meaningful thing, that is, let Soros not borrow Hong Kong dollars, told him not to return the money, not to return the money, he lost
well, in order to make Soros unable to get Hong Kong dollars, the Hong Kong Monetary Authority has sold a large number of US dollars to buy Hong Kong dollars and bought all the Hong Kong dollars in the market, which means that Soros can't buy Hong Kong dollars and return the money. So there is no Hong Kong dollar, right! Soros can't buy Hong Kong dollars. But have you ever thought about it? If there is no Hong Kong dollar, what about the interest rate of Hong Kong dollar? It will certainly rise, right? Because there is no Hong Kong dollar, what can I do if I need Hong Kong dollar? I have to borrow Hong Kong dollars at a high interest rate, right? Well, I tell you, the result of your recovery of Hong Kong dollars is that there is a shortage of Hong Kong dollars in the market. Therefore, the interest rate of Hong Kong dollars soars immediately. Do you know how much it has gone up? One day's interest rate went up to 280%
what will happen to the Hong Kong stock market at this time, needless to say; Crash! Soros had sold short 80000 contracts of Hang Seng Index before sniping Hong Kong dollar. What did he bet on? The bet is the Hang Seng Index's slump. What is short selling? That is, he borrowed 80000 Hang Seng Index to sell at a high price, and then he bought 80000 contracts to return when Hang Seng Index fell to a low level tomorrow. So what does Soros really rely on to make money? It's short selling, not foreign exchange, that makes money< As a result, when the interest rate rose to 280% on October 23, 1997, our stock price plummeted and the market value of US $40 billion disappeared. After 1997, the Hang Seng Index dropped from the peak of 16673 points to 6660 points, down by 60%. In this way, we completely failed< br />
Soros was short selling Hong Kong dollars in New York at 12:00 in the middle of the night{ It seems that our stock market announced the increase of stamp ty at midnight at 5.30 that year. What is short selling? Today, I lent a stock to a securities company. Today, I sold it at 100 yuan. Tomorrow, when the stock price dropped to 60 yuan, I bought it back to the securities company. Because I sold it at 100 yuan and bought it at 60 yuan, I made 40 yuan. Our stock is to rise in order to make money, short selling? You have to go down to make money
therefore, Soros's purpose of short selling the Hong Kong dollar is to attack the Hong Kong dollar and bet on the decline of the Hong Kong dollar! Like short selling stocks, as long as the Hong Kong dollar falls, it can make money. However, it is unreasonable for Soros to do so, because the exchange rate system in Hong Kong is very strange. He does not simply fix the exchange rate, but links the exchange rate with the US dollar
what is a fixed exchange rate? Fixed exchange rate means that the government sets a foreign exchange price, such as one dollar for seven yuan. If the price of US dollar is high, the government will sell US dollar to suppress the price of US dollar, and buy RMB to raise the price. The government will maintain the exchange rate by buying and selling US dollar foreign exchange, keeping one US dollar for seven RMB
but Hong Kong is not. Hong Kong is linked exchange rate. What is linked exchange rate? It is different from the fixed exchange rate, that is, the three note issuing banks in Hong Kong, including HSBC, Standard Chartered Bank and Bank of China, as long as they want to issue Hong Kong dollars, they must first deposit US dollars to the Hong Kong Monetary Authority, that is to say, I have to deposit US $100 to the monetary authority before the bank can issue HK $750. If we don't deposit US dollars, we can't issue Hong Kong dollars. This is the linked exchange rate. It's almost the only one in the world. Unlike China, China does not need to keep dollars in issuing renminbi, theoretically, how much RMB Chinese mainland government wants to print. But Hong Kong is not. Hong Kong has to deposit US dollars in order to issue Hong Kong dollars. In this way, Hong Kong dollar is actually a voucher for us dollar
since Hong Kong dollar is the veiled US dollar, how can Soros sell short? How could he fight the dollar? What about US dollar snipers? Unless Soros doesn't want to live, the US government will surely arrest him. It's not reasonable for you. Soros always uses different currencies to snipe? is it? So he couldn't have made it, but it scared us, my God! It's over. It's over. Soros is going to snipe us
therefore, the Hong Kong Monetary Authority made a decision on the spot, saying that it was not allowed to borrow or lend energy. That is to say, Soros sold short Hong Kong dollars at a high price today, and he will buy back Hong Kong dollars tomorrow. Right, but he sold Hong Kong dollars today and asked him to return it tomorrow. He can't buy Hong Kong dollars. He can't pay it back. Isn't Soros a breach of contract and will have to pay a fine? Then you failed to snipe the Hong Kong dollar? Don't we just beat it? So at this time, we did a very meaningful thing, that is, let Soros not borrow Hong Kong dollars, told him not to return the money, not to return the money, he lost
well, in order to make Soros unable to get Hong Kong dollars, the Hong Kong Monetary Authority has sold a large number of US dollars to buy Hong Kong dollars and bought all the Hong Kong dollars in the market, which means that Soros can't buy Hong Kong dollars and return the money. So there is no Hong Kong dollar, right! Soros can't buy Hong Kong dollars. But have you ever thought about it? If there is no Hong Kong dollar, what about the interest rate of Hong Kong dollar? It will certainly rise, right? Because there is no Hong Kong dollar, what can I do if I need Hong Kong dollar? I have to borrow Hong Kong dollars at a high interest rate, right? Well, I tell you, the result of your recovery of Hong Kong dollars is that there is a shortage of Hong Kong dollars in the market. Therefore, the interest rate of Hong Kong dollars soars immediately. Do you know how much it has gone up? One day's interest rate went up to 280%
what will happen to the Hong Kong stock market at this time, needless to say; Crash! Soros had sold short 80000 contracts of Hang Seng Index before sniping Hong Kong dollar. What did he bet on? The bet is the Hang Seng Index's slump. What is short selling? That is, he borrowed 80000 Hang Seng Index to sell at a high price, and then he bought 80000 contracts to return when Hang Seng Index fell to a low level tomorrow. So what does Soros really rely on to make money? It's short selling, not foreign exchange, that makes money< As a result, when the interest rate rose to 280% on October 23, 1997, our stock price plummeted and the market value of US $40 billion disappeared. After 1997, the Hang Seng Index dropped from the peak of 16673 points to 6660 points, down by 60%. In this way, we completely failed< br />
9. Although the financial crisis has seriously affected the U.S. and the global real economy, compared with other countries' currencies, the U.S. dollar did not depreciate but rose (except the yen). The specific realization is that the US dollar index rose from more than 70 in July 2008 to the current 86 level. This is because as a key currency, the stability and security of the US dollar is better than other currencies. When the financial crisis breaks out, everyone will convert their unsafe assets and currencies into dollars. I believe you often hear the saying "cash is king" because cash is the safest and the US dollar is the safest among all freely convertible currencies. In this way, the demand for us dollar increases and the exchange rate of US dollar rises
there are many factors that affect the exchange rate, and the key factors are different in each situation. The following is a list of factors that affect the exchange rate:
all foreign exchange transactions involve the exchange of one currency into another currency. At any time, the actual exchange rate will be mainly determined by the supply and demand of the corresponding currency. Remember that the demand for one currency means the supply of another. Similarly, when you provide one currency, it means the demand for another. The following factors affect the supply and demand of money, thus affecting the exchange rate< When the central bank considers that the intervention in the foreign exchange market is effective and the result of the intervention will be consistent with the government's monetary policy, the participation of the central bank in the foreign exchange market will affect the exchange rate. The participation of the central bank is usually through buying or selling the local currency to stabilize the local currency at a level considered to be real and ideal. Other market participants' judgment of the impact of the government's monetary policy on the exchange rate and their expectations of future policies will also have an impact on the exchange rate< If the global situation becomes tense, it will lead to the instability of the foreign exchange market, the abnormal inflow or outflow of some currencies will occur, and the final possible result will be the substantial fluctuation of the exchange rate. Generally speaking, the more stable the political situation is, the more stable the currency is
the influence of political factors on the exchange rate can be illustrated by some examples. At the end of 1987, e to the continuous depreciation of the US dollar, in order to maintain the basic stability of the US dollar exchange rate, the finance ministers of the seven western countries and the presidents of the central banks issued a joint statement on December 23, 1987, and began to implement large-scale joint intervention in the foreign exchange market on January 4, 1988. They sold a large number of yen and Deutsche mark to buy US dollars, thus making the US dollar exchange rate rebound, The US dollar exchange rate remained basically stable. Second, if you pay attention to the euro, you must have noticed that ring the Kosovo war, for three consecutive months, the exchange rate of the euro against the US dollar has fallen by 10%. One of the reasons is that the Kosovo war situation has exerted downward pressure on the euro< Third, the balance of payments of a country will lead to the fluctuation of its local currency exchange rate. Balance of payments is a summary of all the external economic and financial relations of a country's residents. A country's balance of payments reflects its international economic status, and also affects its macro and micro economic operation. In the final analysis, the influence of the balance of payments is the influence of the supply and demand of foreign exchange on the exchange rate
foreign exchange income is generated by an economic transaction (such as export) or capital transaction (such as foreign investment in China). Because foreign exchange can not circulate freely in the domestic market, it is necessary to convert foreign currency into domestic currency in order to put it into domestic circulation. This forms the foreign exchange supply in the foreign exchange market. Foreign exchange expenditure is caused by a certain economic transaction (such as import) or capital transaction (investment abroad). Because it is necessary to convert domestic currency into foreign currency to meet their respective economic needs, there is a need for foreign exchange in the foreign exchange market
these transactions are integrated and recorded in the balance of payments statistics, which constitutes a country's foreign exchange balance. If the foreign exchange income is greater than the expenditure, the supply of foreign exchange will increase; If the foreign exchange expenditure is greater than the income, the demand for foreign exchange will increase. With the increase of foreign exchange supply and the constant demand, the price of foreign exchange will drop and the value of local currency will rise accordingly; When the demand for foreign exchange increases and the supply remains unchanged, the price of foreign exchange will rise, and the value of local currency will fall accordingly< When the dominant interest rate of one country rises or falls relative to that of another country, the currency with low interest rate will be sold and the currency with high interest rate will be bought in pursuit of higher capital return. As the demand for a relatively high interest rate currency increases, it will appreciate against other currencies
let's take a look at an example to explain how the interest rate affects the exchange rate: suppose there are two countries a and B, both of which do not implement exchange control, and funds can flow freely between the two countries. As part of country a's monetary policy, interest rates have been raised by 1%. At the same time, the interest rate level of country B remains unchanged. There is a large amount of short-term hot money in the market, which always flows between countries in order to find the most favorable interest rate. When other conditions remain unchanged and the leading interest rate of country a rises, a huge amount of short-term hot money will flow into country a to pursue higher interest rates. When the hot money flows out from country B, a large amount of country B's currency will be sold to exchange for country a's currency. In this way, the demand for the currency of country a rises, and the result is that the currency of country a is stronger than that of country B
the above examples are for the situation between the two countries. In fact, in today's international market, it is also applicable to the global scope. Over the years, the free flow of funds and the elimination of foreign exchange control are the general trend. This trend provides great convenience for the free flow of international short-term hot money (sometimes called "hot money"). It should be pointed out that investors will transfer funds to regions or countries with high interest rates only when they believe that changes in the exchange rate will not offset the return of high interest rates< 5. Market judgment
the foreign exchange market does not always follow a logical change pattern. Factors that are difficult to understand, such as personal feelings, judgments, and analysis and understanding of various global political and economic events, all have an impact on the exchange rate. Operators in the market must correctly understand all kinds of reports or data published, such as foreign exchange revenue and expenditure data, inflation indicators, economic growth rate, etc
but in fact, before the above reports or data are made public to the market, there will be a kind of expectation or judgment on the substance reflected by the reports or data in the market. This expectation or judgment will be reflected in the price before reporting or data disclosure. Once there is a real report or data that is quite different from people's expectation or judgment, it will lead to a large fluctuation of the exchange rate. It is not enough for a foreign exchange trader to correctly understand various economic indicators and data. He must understand what kind of expectations and judgments the market will make on unpublished indicators and data< 6. Speculation is also an important factor affecting the exchange rate. In the foreign exchange market, the proportion of transactions directly related to international trade is relatively low. Most of the transactions are essentially speculative activities, which will lead to the flow of different currencies, thus affecting the exchange rate. When people analyze the factors that affect the exchange rate changes, they come to the conclusion that the exchange rate of a certain currency will rise and rush to buy, so the rise of the currency becomes a reality. On the contrary, when people expect a certain currency to fall, they will sell off in a race, which makes the exchange rate fall
for example, for a period of time after World War II, e to the political stability, good economic operation and low inflation rate of the United States, the economic growth reached an average annual rate of 5% in the early 1960s. At that time, all countries in the world were willing to use the US dollar as a means of payment to store wealth, so that the US dollar exchange rate continued to rise. However, in the late 1960s and early 1970s, e to the Vietnam War, Watergate incident, serious inflation, heavier tax burden, trade deficit and the decline of economic growth rate, the value of the US dollar fell sharply.
there are many factors that affect the exchange rate, and the key factors are different in each situation. The following is a list of factors that affect the exchange rate:
all foreign exchange transactions involve the exchange of one currency into another currency. At any time, the actual exchange rate will be mainly determined by the supply and demand of the corresponding currency. Remember that the demand for one currency means the supply of another. Similarly, when you provide one currency, it means the demand for another. The following factors affect the supply and demand of money, thus affecting the exchange rate< When the central bank considers that the intervention in the foreign exchange market is effective and the result of the intervention will be consistent with the government's monetary policy, the participation of the central bank in the foreign exchange market will affect the exchange rate. The participation of the central bank is usually through buying or selling the local currency to stabilize the local currency at a level considered to be real and ideal. Other market participants' judgment of the impact of the government's monetary policy on the exchange rate and their expectations of future policies will also have an impact on the exchange rate< If the global situation becomes tense, it will lead to the instability of the foreign exchange market, the abnormal inflow or outflow of some currencies will occur, and the final possible result will be the substantial fluctuation of the exchange rate. Generally speaking, the more stable the political situation is, the more stable the currency is
the influence of political factors on the exchange rate can be illustrated by some examples. At the end of 1987, e to the continuous depreciation of the US dollar, in order to maintain the basic stability of the US dollar exchange rate, the finance ministers of the seven western countries and the presidents of the central banks issued a joint statement on December 23, 1987, and began to implement large-scale joint intervention in the foreign exchange market on January 4, 1988. They sold a large number of yen and Deutsche mark to buy US dollars, thus making the US dollar exchange rate rebound, The US dollar exchange rate remained basically stable. Second, if you pay attention to the euro, you must have noticed that ring the Kosovo war, for three consecutive months, the exchange rate of the euro against the US dollar has fallen by 10%. One of the reasons is that the Kosovo war situation has exerted downward pressure on the euro< Third, the balance of payments of a country will lead to the fluctuation of its local currency exchange rate. Balance of payments is a summary of all the external economic and financial relations of a country's residents. A country's balance of payments reflects its international economic status, and also affects its macro and micro economic operation. In the final analysis, the influence of the balance of payments is the influence of the supply and demand of foreign exchange on the exchange rate
foreign exchange income is generated by an economic transaction (such as export) or capital transaction (such as foreign investment in China). Because foreign exchange can not circulate freely in the domestic market, it is necessary to convert foreign currency into domestic currency in order to put it into domestic circulation. This forms the foreign exchange supply in the foreign exchange market. Foreign exchange expenditure is caused by a certain economic transaction (such as import) or capital transaction (investment abroad). Because it is necessary to convert domestic currency into foreign currency to meet their respective economic needs, there is a need for foreign exchange in the foreign exchange market
these transactions are integrated and recorded in the balance of payments statistics, which constitutes a country's foreign exchange balance. If the foreign exchange income is greater than the expenditure, the supply of foreign exchange will increase; If the foreign exchange expenditure is greater than the income, the demand for foreign exchange will increase. With the increase of foreign exchange supply and the constant demand, the price of foreign exchange will drop and the value of local currency will rise accordingly; When the demand for foreign exchange increases and the supply remains unchanged, the price of foreign exchange will rise, and the value of local currency will fall accordingly< When the dominant interest rate of one country rises or falls relative to that of another country, the currency with low interest rate will be sold and the currency with high interest rate will be bought in pursuit of higher capital return. As the demand for a relatively high interest rate currency increases, it will appreciate against other currencies
let's take a look at an example to explain how the interest rate affects the exchange rate: suppose there are two countries a and B, both of which do not implement exchange control, and funds can flow freely between the two countries. As part of country a's monetary policy, interest rates have been raised by 1%. At the same time, the interest rate level of country B remains unchanged. There is a large amount of short-term hot money in the market, which always flows between countries in order to find the most favorable interest rate. When other conditions remain unchanged and the leading interest rate of country a rises, a huge amount of short-term hot money will flow into country a to pursue higher interest rates. When the hot money flows out from country B, a large amount of country B's currency will be sold to exchange for country a's currency. In this way, the demand for the currency of country a rises, and the result is that the currency of country a is stronger than that of country B
the above examples are for the situation between the two countries. In fact, in today's international market, it is also applicable to the global scope. Over the years, the free flow of funds and the elimination of foreign exchange control are the general trend. This trend provides great convenience for the free flow of international short-term hot money (sometimes called "hot money"). It should be pointed out that investors will transfer funds to regions or countries with high interest rates only when they believe that changes in the exchange rate will not offset the return of high interest rates< 5. Market judgment
the foreign exchange market does not always follow a logical change pattern. Factors that are difficult to understand, such as personal feelings, judgments, and analysis and understanding of various global political and economic events, all have an impact on the exchange rate. Operators in the market must correctly understand all kinds of reports or data published, such as foreign exchange revenue and expenditure data, inflation indicators, economic growth rate, etc
but in fact, before the above reports or data are made public to the market, there will be a kind of expectation or judgment on the substance reflected by the reports or data in the market. This expectation or judgment will be reflected in the price before reporting or data disclosure. Once there is a real report or data that is quite different from people's expectation or judgment, it will lead to a large fluctuation of the exchange rate. It is not enough for a foreign exchange trader to correctly understand various economic indicators and data. He must understand what kind of expectations and judgments the market will make on unpublished indicators and data< 6. Speculation is also an important factor affecting the exchange rate. In the foreign exchange market, the proportion of transactions directly related to international trade is relatively low. Most of the transactions are essentially speculative activities, which will lead to the flow of different currencies, thus affecting the exchange rate. When people analyze the factors that affect the exchange rate changes, they come to the conclusion that the exchange rate of a certain currency will rise and rush to buy, so the rise of the currency becomes a reality. On the contrary, when people expect a certain currency to fall, they will sell off in a race, which makes the exchange rate fall
for example, for a period of time after World War II, e to the political stability, good economic operation and low inflation rate of the United States, the economic growth reached an average annual rate of 5% in the early 1960s. At that time, all countries in the world were willing to use the US dollar as a means of payment to store wealth, so that the US dollar exchange rate continued to rise. However, in the late 1960s and early 1970s, e to the Vietnam War, Watergate incident, serious inflation, heavier tax burden, trade deficit and the decline of economic growth rate, the value of the US dollar fell sharply.
10. China's economy may encounter the biggest difficulties in the middle of next year
the financial tsunami has landed in many countries around the world. Facing the possible economic recession, the world is taking measures to rescue the market. In the case of China's GDP growth rate of only 9% in the third quarter, what is the trend of China's economy in the future? I would like to make a few comments< According to the data released by the National Bureau of statistics on the 20th, GDP in the first three quarters increased by 9.9% year-on-year, down 2.3 percentage points from the same period last year. On this basis, GDP growth in the third quarter is only 9%. So many people are worried about the trend of China's economy in the fourth quarter and 2009
in fact, the economic downturn has been quite serious. According to the previous report, the growth rate of electricity consumption in September has dropped to 3%, and that from January to September has dropped to 9.9%. According to the empirical value, the economic growth rate corresponding to this level of electricity consumption should be at least below 9%. The main problem is the decline in the contribution of exports and investment, of which the contribution of exports decreased by 0.9 points. Now it seems that the economic downturn is intensifying, and it is difficult to judge when it will bottom out, because there is a risk of a hard landing for China's economy in the future. Once it happens, it may be a long time. There will be a lag period from the financial turmoil to the sharp decline of global aggregate demand, so the middle of next year will be a very difficult period< In September, CPI rose by 4.6%, down 0.3 percentage points from last month; PPI rose 9.1%, down 1.0 percentage points from last month. What is the inflation situation in the fourth quarter and 2009 after the double falls of PPI and CPI Don't it. The replicator will report it. This answer belongs to чī ℡ right)
in fact, the decline of CPI is mainly e to the disappearance of tail factors, while the decline of PPI is mainly e to the recent sharp decline of international commodity market. At present, the pressure of domestic inflation has eased, and inflation is expected to continue to fall in the fourth quarter, but there is great uncertainty about inflation in 2009{ This answer belongs to чī ℡ right, no pasting}
the unprecedented rescue plan of western countries is always the potential source of inflation in the medium and long term in the future. From the domestic point of view, several factors should be noted:
1. Whether the prices of primary procts such as energy and grain will rise after shocks. If there is no new instrial bright spot in the U.S. economy, there are only three possible directions: consumer credit, emerging markets, energy and other resource markets. As a result, the commodity market rebounded, thus giving a new impetus to PPI. 2. The weakening of fiscal capacity will force the government to relax price control, thus releasing the long-standing inflationary pressure. 3. After the collapse of a large number of manufacturing enterprises, there will be new inflationary pressure on the supply side of manufactured goods. 4. The expansionary monetary policy and expansionary fiscal policy that have to be adopted will promote the price rise from the level of money supply< In the first three quarters, the added value of instries above designated size increased by 15.2% year-on-year, 3.3 percentage points lower than that in the same period of last year, including an increase of 11.4% in September. This data reflects the aggravation of the deterioration of the business situation of enterprises, and it is a high probability event that the growth rate returns to the single digit. Enterprises are facing four major pressures: exchange rate appreciation, rising raw material costs, rising labor costs, and sudden drop in external demand. If the European and American economies fall into a deep recession, it will be fatal for a country whose exports already account for 40% of GDP
it seems that exports remained stable in the third quarter, mainly e to the continuation of orders in the first half of the year. However, from January to September, the U.S. financial crisis has not spread from the market to the real economy, and the U.S. economy has maintained a growth rate of 2%. But in late September, after the Lehman incident, the feeling was obviously different. The firewall between the market and the real economy was broken. In the next few quarters, the U.S. economy will enter a significant recession, the spillover effect will affect the world, and China's exports are not optimistic. It is likely to fall back to single digit growth in the first half of next year
the possibility of RMB devaluation will increase next year
by the end of September 2008, the balance of China's foreign exchange reserves was US $1.9 trillion, up 32.92% year on year. In September, foreign exchange reserves increased by US $21.4 billion, far lower than the trade surplus of US $29.3 billion that month. On the whole, the capital inflows in July, August and September dropped sharply. After the financial tsunami, the withdrawal of international capital from emerging markets should be a trend, and it is happening. With the deleveraging of the US economy, consumer credit will shrink sharply, and the economic prospects of the corresponding emerging market export model are pessimistic. At the same time, it is also an important factor to sell off assets and withdraw a large amount of capital to make up for the losses of the home country's financial institutions and meet the requirements of deleveraging financial adjustment. If the trend continues, we can't rule out the months when China's foreign reserves declined after the middle of 2009. In fact, in 2007, China's economy has come to the end of an existing economic model, and there has been an obvious turning point in the progress of labor proctivity. Before the emergence of China's new model, the appreciation space of RMB real exchange rate has been exhausted. Overseas countries are most aware of this. Singapore's one-year non deliverable RMB exchange rate has shown a significant discount. The possibility of devaluation of RMB exchange rate in 2009 is increasing
China's manufacturing instry is very fragile
how much impact does the global economic slowdown have on China's manufacturing instry? In my opinion, this is catastrophic. Because China's manufacturing instry is a big in and big out structure, resources and markets are in the hands of the United States and Europe. On the one hand, China's manufacturing instry has to bear the pressure of imported inflation such as rising raw material prices; On the other hand, China's manufacturing instry is unable to move the cost pressure out, because the pricing power of global manufactured goods is not in China, although China is known as "world factory" or "world workshop". However, both ends of the value chain of modern manufacturing instry are not controlled by China, and high value-added fields such as R & D, raw material procurement, brand design, sales channel management, after-sales service, retail monopoly giants are in the hands of the United States and Europe. China's manufacturing instry is only working with orders, not directly facing the final consumers. This kind of structure is very fragile, resources and market are squeezed in both directions, and a large number of enterprises are bound to close down
it is necessary to extend the instrial value chain (it is not recommended to , the replicator should report). This answer belongs to чī ℡ right)
is there any new growth point in China to support the economy? To solve this problem, it is necessary to reform hard to see and create new economic growth points. From a macro perspective, it is mainly to adjust the structure of investment and consumption, and firmly turn to an economy dominated by domestic consumption by accelerating the reform of the price formation mechanism of resource procts and factors, and by accelerating the adjustment of wealth distribution among residents, governments, enterprises and residents. At the micro level, the so-called transformation and upgrading of enterprises are not accurate. They are not driving our labor-intensive enterprises away or moving them in. None of these can solve the problem. The problem of China's manufacturing instry is that it is at the low end of the value distribution chain and is being slaughtered in the international division of labor
therefore, the key to the problem is to extend the instrial value chain. Only by extending to both ends, such as raw material procurement, R & D, logistics, warehousing, sales network, and brand, can modern manufacturing and modern service instries be created, thus reaching a consensus with the macro objectives.
the financial tsunami has landed in many countries around the world. Facing the possible economic recession, the world is taking measures to rescue the market. In the case of China's GDP growth rate of only 9% in the third quarter, what is the trend of China's economy in the future? I would like to make a few comments< According to the data released by the National Bureau of statistics on the 20th, GDP in the first three quarters increased by 9.9% year-on-year, down 2.3 percentage points from the same period last year. On this basis, GDP growth in the third quarter is only 9%. So many people are worried about the trend of China's economy in the fourth quarter and 2009
in fact, the economic downturn has been quite serious. According to the previous report, the growth rate of electricity consumption in September has dropped to 3%, and that from January to September has dropped to 9.9%. According to the empirical value, the economic growth rate corresponding to this level of electricity consumption should be at least below 9%. The main problem is the decline in the contribution of exports and investment, of which the contribution of exports decreased by 0.9 points. Now it seems that the economic downturn is intensifying, and it is difficult to judge when it will bottom out, because there is a risk of a hard landing for China's economy in the future. Once it happens, it may be a long time. There will be a lag period from the financial turmoil to the sharp decline of global aggregate demand, so the middle of next year will be a very difficult period< In September, CPI rose by 4.6%, down 0.3 percentage points from last month; PPI rose 9.1%, down 1.0 percentage points from last month. What is the inflation situation in the fourth quarter and 2009 after the double falls of PPI and CPI Don't it. The replicator will report it. This answer belongs to чī ℡ right)
in fact, the decline of CPI is mainly e to the disappearance of tail factors, while the decline of PPI is mainly e to the recent sharp decline of international commodity market. At present, the pressure of domestic inflation has eased, and inflation is expected to continue to fall in the fourth quarter, but there is great uncertainty about inflation in 2009{ This answer belongs to чī ℡ right, no pasting}
the unprecedented rescue plan of western countries is always the potential source of inflation in the medium and long term in the future. From the domestic point of view, several factors should be noted:
1. Whether the prices of primary procts such as energy and grain will rise after shocks. If there is no new instrial bright spot in the U.S. economy, there are only three possible directions: consumer credit, emerging markets, energy and other resource markets. As a result, the commodity market rebounded, thus giving a new impetus to PPI. 2. The weakening of fiscal capacity will force the government to relax price control, thus releasing the long-standing inflationary pressure. 3. After the collapse of a large number of manufacturing enterprises, there will be new inflationary pressure on the supply side of manufactured goods. 4. The expansionary monetary policy and expansionary fiscal policy that have to be adopted will promote the price rise from the level of money supply< In the first three quarters, the added value of instries above designated size increased by 15.2% year-on-year, 3.3 percentage points lower than that in the same period of last year, including an increase of 11.4% in September. This data reflects the aggravation of the deterioration of the business situation of enterprises, and it is a high probability event that the growth rate returns to the single digit. Enterprises are facing four major pressures: exchange rate appreciation, rising raw material costs, rising labor costs, and sudden drop in external demand. If the European and American economies fall into a deep recession, it will be fatal for a country whose exports already account for 40% of GDP
it seems that exports remained stable in the third quarter, mainly e to the continuation of orders in the first half of the year. However, from January to September, the U.S. financial crisis has not spread from the market to the real economy, and the U.S. economy has maintained a growth rate of 2%. But in late September, after the Lehman incident, the feeling was obviously different. The firewall between the market and the real economy was broken. In the next few quarters, the U.S. economy will enter a significant recession, the spillover effect will affect the world, and China's exports are not optimistic. It is likely to fall back to single digit growth in the first half of next year
the possibility of RMB devaluation will increase next year
by the end of September 2008, the balance of China's foreign exchange reserves was US $1.9 trillion, up 32.92% year on year. In September, foreign exchange reserves increased by US $21.4 billion, far lower than the trade surplus of US $29.3 billion that month. On the whole, the capital inflows in July, August and September dropped sharply. After the financial tsunami, the withdrawal of international capital from emerging markets should be a trend, and it is happening. With the deleveraging of the US economy, consumer credit will shrink sharply, and the economic prospects of the corresponding emerging market export model are pessimistic. At the same time, it is also an important factor to sell off assets and withdraw a large amount of capital to make up for the losses of the home country's financial institutions and meet the requirements of deleveraging financial adjustment. If the trend continues, we can't rule out the months when China's foreign reserves declined after the middle of 2009. In fact, in 2007, China's economy has come to the end of an existing economic model, and there has been an obvious turning point in the progress of labor proctivity. Before the emergence of China's new model, the appreciation space of RMB real exchange rate has been exhausted. Overseas countries are most aware of this. Singapore's one-year non deliverable RMB exchange rate has shown a significant discount. The possibility of devaluation of RMB exchange rate in 2009 is increasing
China's manufacturing instry is very fragile
how much impact does the global economic slowdown have on China's manufacturing instry? In my opinion, this is catastrophic. Because China's manufacturing instry is a big in and big out structure, resources and markets are in the hands of the United States and Europe. On the one hand, China's manufacturing instry has to bear the pressure of imported inflation such as rising raw material prices; On the other hand, China's manufacturing instry is unable to move the cost pressure out, because the pricing power of global manufactured goods is not in China, although China is known as "world factory" or "world workshop". However, both ends of the value chain of modern manufacturing instry are not controlled by China, and high value-added fields such as R & D, raw material procurement, brand design, sales channel management, after-sales service, retail monopoly giants are in the hands of the United States and Europe. China's manufacturing instry is only working with orders, not directly facing the final consumers. This kind of structure is very fragile, resources and market are squeezed in both directions, and a large number of enterprises are bound to close down
it is necessary to extend the instrial value chain (it is not recommended to , the replicator should report). This answer belongs to чī ℡ right)
is there any new growth point in China to support the economy? To solve this problem, it is necessary to reform hard to see and create new economic growth points. From a macro perspective, it is mainly to adjust the structure of investment and consumption, and firmly turn to an economy dominated by domestic consumption by accelerating the reform of the price formation mechanism of resource procts and factors, and by accelerating the adjustment of wealth distribution among residents, governments, enterprises and residents. At the micro level, the so-called transformation and upgrading of enterprises are not accurate. They are not driving our labor-intensive enterprises away or moving them in. None of these can solve the problem. The problem of China's manufacturing instry is that it is at the low end of the value distribution chain and is being slaughtered in the international division of labor
therefore, the key to the problem is to extend the instrial value chain. Only by extending to both ends, such as raw material procurement, R & D, logistics, warehousing, sales network, and brand, can modern manufacturing and modern service instries be created, thus reaching a consensus with the macro objectives.
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