The impact of Sino US issues on virtual currency
Publish: 2021-04-28 13:35:53
1. This is a global unification. It must be the same everywhere. Now it mainly depends on the attitude of the central banks of China and the United States towards the special currency
2. In my opinion, many people today will lay an impermeable thing under the bottom of the fish pond. I don't know what it is. It looks like canvas or plastic cloth. We can learn from it.
3. To put it simply, after trump signed the memoranm of trade dialogue yesterday, Wall Street suffered a bloody wash, US stocks plummeted and the panic index VIX rose significantly. In terms of foreign exchange, the risk averse yen soared: USD / JPY fell below 105, the lowest to 104.62, the lowest level since November 2016. Xu Yaxin, a senior analyst at fx168, said the US / China tensions will curb global trade, push up import prices, rece domestic consumption in both countries, and lead to a global economic slowdown.
4. I don't like long speeches.
first, answer the first question. The result of the trade conflict in 2018 was that the United States increased taxes on some of China's export commodities, which made Chinese commodities become "expensive" and uncompetitive. Chinese export enterprises' profits were diluted or even lost money. Only by devaluing the RMB can the competitiveness of Chinese commodities be increased. In fact, from May to December, the same is true, The yuan depreciated from 6.3 to 6.9
Second, it's inconvenient to say that China and the United States reached a temporary settlement at the beginning of December, and the trend of RMB's decline stopped. After the violent rebound, it basically fluctuated with the market this month, and then it may fall slowly and orderly under the supervision of the central bank. We are ready to break through July next year. We don't worry about the decline, but we just don't want the panic caused by the sharp fall.
first, answer the first question. The result of the trade conflict in 2018 was that the United States increased taxes on some of China's export commodities, which made Chinese commodities become "expensive" and uncompetitive. Chinese export enterprises' profits were diluted or even lost money. Only by devaluing the RMB can the competitiveness of Chinese commodities be increased. In fact, from May to December, the same is true, The yuan depreciated from 6.3 to 6.9
Second, it's inconvenient to say that China and the United States reached a temporary settlement at the beginning of December, and the trend of RMB's decline stopped. After the violent rebound, it basically fluctuated with the market this month, and then it may fall slowly and orderly under the supervision of the central bank. We are ready to break through July next year. We don't worry about the decline, but we just don't want the panic caused by the sharp fall.
5. At present, the impact is not big, but it will get deeper and deeper after a long time. The people of both countries do not want to see the decline of Sino US relations. And hope to heal the wounds quickly.
6. From May 9 to 10, ring the 11th round of China US high level economic and trade consultations, the US side increased its tariff on US $200 billion of Chinese goods exported to the us from 10% to 25%, and planned to impose a 25% tariff on an additional US $300 billion of Chinese goods. The Sino US trade has made waves again. The offshore RMB exchange rate has depreciated by more than 1000 points to close at 6.845 within one week. Moreover, it has depreciated sharply when the US dollar index has weakened. Where will the RMB exchange rate go under the Sino US trade war
we believe that repeated trade conflicts between China and the United States are bound to bring pressure on RMB depreciation, but there is no room for RMB exchange rate to appreciate or depreciate significantly. If the Sino US trade negotiations are relaxed, the RMB exchange rate will still receive more support: the inflow of foreign capital brought by financial opening up and the short-term return of Sino US interest rate gap to a safe range are two prominent factors< Since the beginning of this year, the appreciation of RMB exchange rate is mainly driven by market supply and demand, and the core reason is that the positive progress of Sino US negotiations has boosted market sentiment, which has little to do with policy intervention. The recent rapid depreciation of the RMB exchange rate is also consistent with the repeated Sino US trade negotiations (Figure 1). The current situation is similar to the sharp devaluation of RMB exchange rate after the US decided to impose tariffs in late June last year, but the market supply and demand are more dominant. At that time, the shadow of policy boosting devaluation can be seen in the dismantling of RMB middle price; The change of RMB's middle price last week also showed this sign, but the market supply and demand is the dominant factor, and whether the counter cyclical factor promotes the depreciation remains to be seen (Figure 2). In the last cycle, the RMB market reflected that the expectation of RMB devaluation was rising rapidly, which reflected that the Sino US relationship repeatedly led to the change of the market's view on the RMB exchange rate
looking at the US dollar: RMB and the US dollar are two sides of the same coin. The US dollar fluctuates strongly, but lacks the momentum of sustained and substantial upward movement. Therefore, the RMB exchange rate has periodic and relatively limited devaluation pressure
at present, the status quo of the US economy is still not fundamentally changed. Recently, because of the twists and turns of German economy, the recovery of European economy is still faltering. Only the U.S. economy remains relatively strong. However, the strong performance of the US economy in the first quarter of this year was largely e to the turn of Sino US trade negotiations and the recovery of global risk appetite; Once the Sino US trade relationship deteriorates, all this may be discounted. According to the calculation of the IMF, a 25% tariff on all trade between China and the United States will rece the GDP of the United States by 0.3% - 0.6% and that of China by 0.5% - 1.5%. Recently, the U.S. economy has been weaker than expected than that of Europe. The "lose lose lose" impact it faces in the Sino US trade war will further limit the upward space of the U.S. dollar index (Figure 3)
looking at the economy: under external shocks, RMB exchange rate needs to be more flexible, and mechanical commitment to maintain RMB exchange rate stability is not desirable
the most direct impact of Sino US trade war is reflected in exports. Since November 2018, the growth rate of global exports has fallen sharply, and Global trade has evolved to the situation of 2015-2016. In 2018, the US imposed a 25% tariff on China's US $50 billion imports, resulting in the export growth rate of this part of goods falling from 20% to about - 10%; The US side will impose a 25% tariff on Chinese goods, which will have a significant impact on China's exports< In fact, since the international financial crisis, the decline of exports has become a main line of China's economic slowdown. In 2012, China's export growth rate dropped from 20% to 8%. In that year, China's GDP growth target was no longer "guaranteed 8" (from 9.5% to 7.9%), but new employment was the primary target of the government work report. The domestic policy has only been limited loose, and continued to practice real estate regulation. On April 12 of that year, the RMB exchange rate reform also carried out a more substantive reform, expanding the floating range of RMB exchange rate from 0.5% to 1%; In 2015, China's export growth rate dropped from 6% to - 3%. On August 11 of that year, the exchange rate reform introced the market pricing of RMB middle price, and the domestic policy proposed the idea of "supply side structural reform" on the basis of easing< In retrospect, there are at least two revelations: 1) export slowdown is the factor that forces China to accelerate reform and adjustment; 2) Export slowdown requires a more flexible RMB exchange rate< At present, Sino US trade negotiations are in full swing. The United States takes the lead in imposing tariffs, while China does not intervene to devalue the RMB in the direction of market supply and demand, which is one aspect of the short-term game. However, as long as the Sino US trade negotiations continue, there is no room for a substantial appreciation or depreciation of the RMB exchange rate: a substantial appreciation is not in line with the current fundamentals that the RMB exchange rate is not significantly undervalued, it will also significantly weaken China's export competitiveness, and may aggravate adverse capital flow pressure; The sharp depreciation is not in line with the US demand of upholding mercantilism and pressing China to cut its trade surplus with the US rapidly. At present, the general framework of the exchange rate agreement between China and the United States is similar to the exchange rate part of the U.S. - Mexico Canada agreement: more attention should be paid to the "fairness" of exchange rate (adjustment) rules, rather than the purpose of contributing to the sharp depreciation of the US dollar. Besides, RMB is not the constituent currency of the US dollar index
if the Sino US trade negotiations are relaxed, the RMB exchange rate will still be supported
the first support is that financial opening up brings in foreign capital. In 2019, thanks to MSCI's improvement of A-share inclusion factor, FTSE Russell GEIs index collection's inclusion in A-share, and the inclusion in China's bond market by the Bombay & Gamble index, the passive inflow of overseas capital will increase significantly, with a conservative estimate of more than US $100 billion. Compared with 2018, China's total balance of payments was 108.77 billion US dollars, which should not be underestimated. Moreover, overseas companies may continue to actively add China. At present, the allocation of global capital to U.S. assets is at the highest level in history, but the marginal contribution of emerging markets to global economic growth has exceeded 60%. China is the leader of emerging markets, and the reallocation of overseas capital is expected to bring considerable foreign capital inflow
the second support is that the interest rate spread between China and the United States returns to a safe range in the short term
since the beginning of the year, with the Federal Reserve suspending the interest rate increase and starting the plan to stop the scale rection in May, the US bond yield has been fluctuating downward; If the negotiations between China and the United States are relaxed, with the "resilience" of China's economy and the determination of the Chinese government not to "follow the old path", China's interest rate will not go down too fast. In the short run, the interest rate spread between China and the United States can provide a certain buffer, but its trend depends on the situation of Sino US trade war
we believe that repeated trade conflicts between China and the United States are bound to bring pressure on RMB depreciation, but there is no room for RMB exchange rate to appreciate or depreciate significantly. If the Sino US trade negotiations are relaxed, the RMB exchange rate will still receive more support: the inflow of foreign capital brought by financial opening up and the short-term return of Sino US interest rate gap to a safe range are two prominent factors< Since the beginning of this year, the appreciation of RMB exchange rate is mainly driven by market supply and demand, and the core reason is that the positive progress of Sino US negotiations has boosted market sentiment, which has little to do with policy intervention. The recent rapid depreciation of the RMB exchange rate is also consistent with the repeated Sino US trade negotiations (Figure 1). The current situation is similar to the sharp devaluation of RMB exchange rate after the US decided to impose tariffs in late June last year, but the market supply and demand are more dominant. At that time, the shadow of policy boosting devaluation can be seen in the dismantling of RMB middle price; The change of RMB's middle price last week also showed this sign, but the market supply and demand is the dominant factor, and whether the counter cyclical factor promotes the depreciation remains to be seen (Figure 2). In the last cycle, the RMB market reflected that the expectation of RMB devaluation was rising rapidly, which reflected that the Sino US relationship repeatedly led to the change of the market's view on the RMB exchange rate
looking at the US dollar: RMB and the US dollar are two sides of the same coin. The US dollar fluctuates strongly, but lacks the momentum of sustained and substantial upward movement. Therefore, the RMB exchange rate has periodic and relatively limited devaluation pressure
at present, the status quo of the US economy is still not fundamentally changed. Recently, because of the twists and turns of German economy, the recovery of European economy is still faltering. Only the U.S. economy remains relatively strong. However, the strong performance of the US economy in the first quarter of this year was largely e to the turn of Sino US trade negotiations and the recovery of global risk appetite; Once the Sino US trade relationship deteriorates, all this may be discounted. According to the calculation of the IMF, a 25% tariff on all trade between China and the United States will rece the GDP of the United States by 0.3% - 0.6% and that of China by 0.5% - 1.5%. Recently, the U.S. economy has been weaker than expected than that of Europe. The "lose lose lose" impact it faces in the Sino US trade war will further limit the upward space of the U.S. dollar index (Figure 3)
looking at the economy: under external shocks, RMB exchange rate needs to be more flexible, and mechanical commitment to maintain RMB exchange rate stability is not desirable
the most direct impact of Sino US trade war is reflected in exports. Since November 2018, the growth rate of global exports has fallen sharply, and Global trade has evolved to the situation of 2015-2016. In 2018, the US imposed a 25% tariff on China's US $50 billion imports, resulting in the export growth rate of this part of goods falling from 20% to about - 10%; The US side will impose a 25% tariff on Chinese goods, which will have a significant impact on China's exports< In fact, since the international financial crisis, the decline of exports has become a main line of China's economic slowdown. In 2012, China's export growth rate dropped from 20% to 8%. In that year, China's GDP growth target was no longer "guaranteed 8" (from 9.5% to 7.9%), but new employment was the primary target of the government work report. The domestic policy has only been limited loose, and continued to practice real estate regulation. On April 12 of that year, the RMB exchange rate reform also carried out a more substantive reform, expanding the floating range of RMB exchange rate from 0.5% to 1%; In 2015, China's export growth rate dropped from 6% to - 3%. On August 11 of that year, the exchange rate reform introced the market pricing of RMB middle price, and the domestic policy proposed the idea of "supply side structural reform" on the basis of easing< In retrospect, there are at least two revelations: 1) export slowdown is the factor that forces China to accelerate reform and adjustment; 2) Export slowdown requires a more flexible RMB exchange rate< At present, Sino US trade negotiations are in full swing. The United States takes the lead in imposing tariffs, while China does not intervene to devalue the RMB in the direction of market supply and demand, which is one aspect of the short-term game. However, as long as the Sino US trade negotiations continue, there is no room for a substantial appreciation or depreciation of the RMB exchange rate: a substantial appreciation is not in line with the current fundamentals that the RMB exchange rate is not significantly undervalued, it will also significantly weaken China's export competitiveness, and may aggravate adverse capital flow pressure; The sharp depreciation is not in line with the US demand of upholding mercantilism and pressing China to cut its trade surplus with the US rapidly. At present, the general framework of the exchange rate agreement between China and the United States is similar to the exchange rate part of the U.S. - Mexico Canada agreement: more attention should be paid to the "fairness" of exchange rate (adjustment) rules, rather than the purpose of contributing to the sharp depreciation of the US dollar. Besides, RMB is not the constituent currency of the US dollar index
if the Sino US trade negotiations are relaxed, the RMB exchange rate will still be supported
the first support is that financial opening up brings in foreign capital. In 2019, thanks to MSCI's improvement of A-share inclusion factor, FTSE Russell GEIs index collection's inclusion in A-share, and the inclusion in China's bond market by the Bombay & Gamble index, the passive inflow of overseas capital will increase significantly, with a conservative estimate of more than US $100 billion. Compared with 2018, China's total balance of payments was 108.77 billion US dollars, which should not be underestimated. Moreover, overseas companies may continue to actively add China. At present, the allocation of global capital to U.S. assets is at the highest level in history, but the marginal contribution of emerging markets to global economic growth has exceeded 60%. China is the leader of emerging markets, and the reallocation of overseas capital is expected to bring considerable foreign capital inflow
the second support is that the interest rate spread between China and the United States returns to a safe range in the short term
since the beginning of the year, with the Federal Reserve suspending the interest rate increase and starting the plan to stop the scale rection in May, the US bond yield has been fluctuating downward; If the negotiations between China and the United States are relaxed, with the "resilience" of China's economy and the determination of the Chinese government not to "follow the old path", China's interest rate will not go down too fast. In the short run, the interest rate spread between China and the United States can provide a certain buffer, but its trend depends on the situation of Sino US trade war
7. The value of China's huge US dollar foreign exchange reserves is affected; The price competitiveness of export procts will be affected, and then the benefits of these enterprises will be affected, and then the employment problem will be further affected. If there is a problem in employment, it may also lead to social stability problems. If so, it will have an impact on everyone (of course, it is not so serious).
8. 1. The impact or diffusion of the Federal Reserve's water release
the Federal Reserve launched the qe3 plan as most of the market expected, and there was no upper limit on asset purchase, and the degree of easing even exceeded the market expectation in a sense. The expectation of a new round of monetary easing made European and American commodities and stock markets soar. Obviously, the weak employment situation and the election pressure faced by the Obama administration are one of the main reasons for the launch of qe3 by the Federal Reserve. We believe that the impact of the new round of easing on the US dollar, as the world's currency, may spread to the whole world, especially between China and the United States; Currency war & quot; It could get worse
from the perspective of China, the impact of qe3 on China is mainly reflected in the following aspects: first, the re release of water by the Federal Reserve will lead to the depreciation of the US dollar, which will make China, which holds a large amount of US debt, bear the loss of asset shrinkage; Second, the United States has been exposed to natural disasters, and the price of agricultural procts [0.00%
capital
Research Report] has been hyped up. Coupled with the release of water from qe3, the pressure of imported inflation faced by China has further increased. What's worse is the situation that manufacturing instry flows back to the United States to create jobs e to policy and cost factors, while speculative hot money may flow back to China, which will cause trouble to the internationalization of RMB.; Third, once the Central Bank of China is forced by inflation pressure and does not dare to follow suit, it will lead to the passive appreciation of the RMB, and the effect of the new foreign trade rescue policy will be reced, which will undoubtedly aggravate China's exports. Moreover, the central bank's monetary policy can not be implemented, and the downward trend of macro-economy is difficult to reverse< Second, China's Countermeasures
first, because the US Federal Reserve's massive release of water leads to the devaluation of US bonds, the Chinese government may sell US bonds in the future to rece foreign exchange losses and change more foreign exchange reserves into gold or other countries' currencies. Due to the relatively high risk of euro debt and the political risk of yen, gold is still the best choice. In this case, the price of gold may be expected to maintain an upward trend in the future< Second, the Chinese government will face the problem of how to deal with the pressure of imported inflation. Firstly, the state will continue to control the basic grain price through government intervention. Secondly, it will increase reserves to prevent the possible rise of pork and other food prices in the future. For example, the state may increase the purchase and storage of pork and so on. Secondly, in the face of the possible return of speculative hot money, the domestic property market regulation will continue to maintain high pressure, while the QFII approval limit of the stock market may be further increased, and it is possible to launch the international board according to the situation, and establish a capital reservoir to ease the inflation pressure
thirdly, in the face of the continued decline of the US dollar, the Japanese government has made a statement that it will take resolute actions to suppress the yen. Therefore, once the passive appreciation of RMB occurs, the central government will also increase the degree of intervention, including moderately relaxing monetary policy when inflation is effectively controlled; Increase export tax rebate and financial subsidies for export enterprises; We will further introce fiscal subsidy policies to encourage domestic consumption. These measures may bring benefits to relevant instry sectors.
the Federal Reserve launched the qe3 plan as most of the market expected, and there was no upper limit on asset purchase, and the degree of easing even exceeded the market expectation in a sense. The expectation of a new round of monetary easing made European and American commodities and stock markets soar. Obviously, the weak employment situation and the election pressure faced by the Obama administration are one of the main reasons for the launch of qe3 by the Federal Reserve. We believe that the impact of the new round of easing on the US dollar, as the world's currency, may spread to the whole world, especially between China and the United States; Currency war & quot; It could get worse
from the perspective of China, the impact of qe3 on China is mainly reflected in the following aspects: first, the re release of water by the Federal Reserve will lead to the depreciation of the US dollar, which will make China, which holds a large amount of US debt, bear the loss of asset shrinkage; Second, the United States has been exposed to natural disasters, and the price of agricultural procts [0.00%
capital
Research Report] has been hyped up. Coupled with the release of water from qe3, the pressure of imported inflation faced by China has further increased. What's worse is the situation that manufacturing instry flows back to the United States to create jobs e to policy and cost factors, while speculative hot money may flow back to China, which will cause trouble to the internationalization of RMB.; Third, once the Central Bank of China is forced by inflation pressure and does not dare to follow suit, it will lead to the passive appreciation of the RMB, and the effect of the new foreign trade rescue policy will be reced, which will undoubtedly aggravate China's exports. Moreover, the central bank's monetary policy can not be implemented, and the downward trend of macro-economy is difficult to reverse< Second, China's Countermeasures
first, because the US Federal Reserve's massive release of water leads to the devaluation of US bonds, the Chinese government may sell US bonds in the future to rece foreign exchange losses and change more foreign exchange reserves into gold or other countries' currencies. Due to the relatively high risk of euro debt and the political risk of yen, gold is still the best choice. In this case, the price of gold may be expected to maintain an upward trend in the future< Second, the Chinese government will face the problem of how to deal with the pressure of imported inflation. Firstly, the state will continue to control the basic grain price through government intervention. Secondly, it will increase reserves to prevent the possible rise of pork and other food prices in the future. For example, the state may increase the purchase and storage of pork and so on. Secondly, in the face of the possible return of speculative hot money, the domestic property market regulation will continue to maintain high pressure, while the QFII approval limit of the stock market may be further increased, and it is possible to launch the international board according to the situation, and establish a capital reservoir to ease the inflation pressure
thirdly, in the face of the continued decline of the US dollar, the Japanese government has made a statement that it will take resolute actions to suppress the yen. Therefore, once the passive appreciation of RMB occurs, the central government will also increase the degree of intervention, including moderately relaxing monetary policy when inflation is effectively controlled; Increase export tax rebate and financial subsidies for export enterprises; We will further introce fiscal subsidy policies to encourage domestic consumption. These measures may bring benefits to relevant instry sectors.
9. First... The scale of currency issuance in the United States is not as large as that in China. China's GDP is less than half of that in the United States, and the accumulation of social goods is less than 20%. However, China's M2 is already 1.5 times of that in the United States< Second, the U.S. dollar issue is diluted by the world, while China's RMB issue is concentrated in China< Third, the U.S. economy is recovering and it is beginning to carry out deflation policy, which is also the reason for the recent appreciation of the U.S. dollar and the decline of gold.
10. That is to force RMB appreciation. It not only benefits the debt of the United States, but also restricts a considerable number of Chinese enterprises.
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