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	<title>China Tells &#187; Currency China (汇率解析)</title>
	<atom:link href="http://blog.chinatells.com/category/currency-china/feed" rel="self" type="application/rss+xml" />
	<link>http://blog.chinatells.com</link>
	<description>Investor&#039;s Portal to China</description>
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		<item>
		<title>A guess on China&#8217;s foreign reserve currency composition (外汇储备货币构成)</title>
		<link>http://blog.chinatells.com/2011/11/5236</link>
		<comments>http://blog.chinatells.com/2011/11/5236#comments</comments>
		<pubDate>Fri, 18 Nov 2011 05:37:24 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Publication (出版发行)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=5236</guid>
		<description><![CDATA[The actual currency composition of China&#8217;s foreign reserve is a state secret. However, we can get an educated guess on the components based on different sources of information. 中国外汇储备的外币构成没有人知道，但是可以管中窥豹，略知一二。 Related Posts:World Foreign Reserve Rank (世界外汇储备一览)Stats China: China&#8217;s Foreign Reserve amounts to 2273 Billion (外汇储备突破2.2万亿)China&#8217;s Foreign Reserve World No.1 (中国外汇储备世界第一)China likely to increase Gold Portion in [...]]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>Wu Zhijian: Will USD continue its weakness (伍治坚：美元弱势还将继续)</title>
		<link>http://blog.chinatells.com/2011/01/4940</link>
		<comments>http://blog.chinatells.com/2011/01/4940#comments</comments>
		<pubDate>Fri, 28 Jan 2011 12:32:57 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>
		<category><![CDATA[Publication (出版发行)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=4940</guid>
		<description><![CDATA[US Dollar, as the world anchor currency, has started to lose its value since 2007 against most other currencies. The central Bank of USA, FED, seems not hesitant at all to continue to boom the economy and monetize the federal debt through more money printing. So what is the implication of FED&#8217;s policy on the [...]]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>RMB for the past 10 years (汇率十年路)</title>
		<link>http://blog.chinatells.com/2010/10/4686</link>
		<comments>http://blog.chinatells.com/2010/10/4686#comments</comments>
		<pubDate>Fri, 22 Oct 2010 08:15:56 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>
		<category><![CDATA[Stats China (统计图表)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=4686</guid>
		<description><![CDATA[In the past 10 years, most world's active currencies have appreciated against RMB with a notable exception of USD. For example, BRL has appreciated against RMB for almost 100% in the past decade, followed by AUD (80%), INR (50%) and KRW (50%). Therefore it is not surprising that Chinese government will continue to receive pressure from major trading partners to appreciate her currency. The only notable exception seems to be USD, which almost hasn't moved against RMB, largely thanks to the pegging policy. On the other hand, however, it also reveals the fact that USD has depreciated against these currencies to a certain extent in the past 10 years as well.

在过去10年中，人民币汇率对大多数货币都发生了贬值。其中对几个主要货币，比如巴西里尔，澳元和印度卢比的贬值幅度较大。同时人民币对美元汇率基本没有变动，主要是因为汇率钉牢起的作用。因此在可预见的未来，世界各国要求人民币升值的呼声将会愈演愈烈。
]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>RMB likely to move (人民币汇率要动)</title>
		<link>http://blog.chinatells.com/2010/08/4587</link>
		<comments>http://blog.chinatells.com/2010/08/4587#comments</comments>
		<pubDate>Sun, 29 Aug 2010 07:40:19 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Investing China (投资视角)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>
		<category><![CDATA[Publication (出版发行)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=4587</guid>
		<description><![CDATA[Back in mid June, PBOC announced to de-peg RMB from USD. Since then, RMB did appreciate about 1% by early August but then reverted back near to the prior de-peg level. In summary in the last 2 months, RMB has almost not moved at all against USD.
Does it mean that the so called de-peg is a fake from PBOC? Or is PBOC waiting for a better time to take more aggressive action? My view is that we are likely to see RMB to make bolder move against USD in the next few months.
I have a few observations to support my opinion.
First, Chinese government is sending messages to the public in support of a more flexible exchange rate regime. This message is well reflected from a series of public announcements made by the Deputy Governor of PBOC, Ms Hu Xiaolian. Ms Hu has published five speeches recently to convey the message that Chinese authority has always supported a managed floating exchange rate regime, dated back to 1994. According to Ms Hu, the range of the floating adjustment shall be based on trade and current balance and a flexible exchange rate helps to improve the independence of monetary policy, and curb the imported inflation.
Ms Hu’s public speech shall be perceived as a warming up for Chinese government leaders to implement more aggressive policy changes in the near future.
Second, US want China to appreciate the currency faster.
Since the beginning of May, US economy starts to show more negative outlook, which leads the market to suspect a potential double dip. The unemployment rate in the US is still hovering at a very high level of about 10%, and the Obama government is running out of time to show the voters that they have the capability to lead the nation out of recession. In addition, it seems that the trade fundamentals between US and China are heading back to the imbalance status, in which China continues to accumulate more trade surplus while US continues to post record trade deficit. In July, China registered a whopping growth of 43.9% in export growth and also reported a trade surplus of 20 billion USD, which is the highest since the beginning of the year. Such is a worrying signal that the global imbalance that might be one of the reasons to contribute to the financial crisis is recurring again.
Thirdly, neither US nor China wants to see an outbreak of trade war between the two. With the mounting political pressure to build up in US before the mid term election in November, there is more likelihood for US to resort to trade protectionism if the trade imbalance between the two nations continues. On the other hand, the trade protectionism shall be the last choice for Obama administration as it would be detrimental for a weak US economy, and against US governments’ stance to promote free trade. Trade war would also cause detrimental effect on China’s export sector and the whole economy, which is more damaging than an appreciation of RMB.
To summarize above, I think we are more likely to see an appreciation of RMB rate than a trade war to occur between China and US.
As to the timing, I think we are likely to see the rate to be changed more aggressively by November. The reason is that there are a few important events to take place in November, such as the G20 summit in Seoul, the US mid-term election and the Strategic dialogue between China and US to take place in Washington DC. Based on past experience, such period could be a good opportunity window for Chinese government to implement more aggressive policy change on the rate of RMB.
]]></description>
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		</item>
		<item>
		<title>CNY&#8217;s move surprised traders (人民币不是好惹的)</title>
		<link>http://blog.chinatells.com/2010/08/4528</link>
		<comments>http://blog.chinatells.com/2010/08/4528#comments</comments>
		<pubDate>Fri, 13 Aug 2010 14:12:11 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Investing China (投资视角)]]></category>
		<category><![CDATA[Publication (出版发行)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=4528</guid>
		<description><![CDATA[I have pointed out in a previous post that it is a mind blower to trade RMB on the NDF market. If you think that RMB is a free lunch on the table for investors to bet on the seemingly one way direction, well the market likes you as a guest. During the past week RMB surprised most trades by coming off from its recent high and returned most gains that she has gained in the past month. So where is the complaint and pressure from US congressmen? And where is the IMF or World Bank report claiming a 30% RMB undervaluation? Nowadays almost any renowned economist will tell you that RMB is undervalued and it is to China's benefit to let RMB appreciate. The benefits could go on a long list such as increased purchasing power of Chinese consumers, global rebalancing between trading partners, less reliance on export oriented growth and political pressure from Obama. However, to express a view and to profit from it is totally two different things. The recent move of RMB has taught an important lesson that: opinion is free, but to make a correct investment decision is totally a different ball game.

人民币对美元的币值一直以来被视作世上少有的无悬念事件，早晚要升值，不是快升就是慢升。因此人民币远期市场上的交易大多以看多为主，只是看多的程度有所不同。最近一个星期人民币币值不声不响来了个闷跌，把前一个月的升值全都跌回去了。我在此前一篇文章中已经解释过赌人民币升值不如去赌马，可能中奖的概率还高点。其中有许多原因。对于围观的观众来说，人民币升值从外围来看热热闹闹，但是真的想要从中获利那就纯粹是另外一门学问了。]]></description>
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		<item>
		<title>Why Speculators will lose big on the RMB Bet (豪赌人民币得不偿失)</title>
		<link>http://blog.chinatells.com/2010/07/4470</link>
		<comments>http://blog.chinatells.com/2010/07/4470#comments</comments>
		<pubDate>Sat, 10 Jul 2010 13:50:58 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Investing China (投资视角)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>
		<category><![CDATA[Publication (出版发行)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=4470</guid>
		<description><![CDATA[Since the announcement from PBOC to de-peg RMB from USD, the market has been excited about the movement of RMB. In fact, since June 18 when the announcement was made, RMB has appreciated a whopping 0.87% from 6.83 to 6.77 during a very short period of 22 days. Based on such pace, RMB will appreciate 14.5% in 12 months, taking the exchange rate to a new elevated level of 5.83.

No market player has ever made any agressive expectation of the appreciation of RMB on the above scale. In fact, the appreciation pace in the last three weeks already exceeded most commentators' expectation, with a mean annualized expectation of RMB to appreciate around 2% to 4%. Does it mean that the Chinese government has caught the speculators again, and it is time to jump on the one way sure win trade?

It is Chinatells' belief that to trade RMB (through NDF market) is never a high quality bet from a speculator's perspective. To start with, RMB is one of the most heavily managed currencies in the world. As a natural result, any fundamental analysis based on the economy and international finance to value the RMB is a waste of time. To trade RMB, one is literally trying to read the mind of Zhong Nan Hai. Secondly, the movement of the RMB, even the intra-day movement, is so managed that there is not even much noise or rumor to trade. As a comparison, some other heavily managed currencies, such as TWD or SGD, offers a relatively more flexible platform for speculating (even though the central banks of Taiwan or Singapore are also an active player on the FX market).

Given such a framework, the future direction of RMB, is almost certain to have a two way risk in Chinatells' view. It is Chinatells' strong belief that there is no such a purely free float currency in this world per sei. All the central banks make effort to manage their currency, but to different degrees and under different mechanisms. Sophisticated and powerful central banks, such as FED and BOE, tend to try to influence currency through a more market-like approach, such as adjusting the interest rate or open market operation. Other governments make the life of a central banker easier by pegging the currency at a fixed rate. Given the high sensitivity of RMB, it is foreseeable that RMB will continue to be managed as a powerful political tool between Beijing and Washington to achieve some sort of compromised balance, so that both parties can obtain what they mainly want by sacrificing something else. For Washington, the immediate priority is the mid-term election in November. In Chinatells' base case scenario, Beijing will allow an agressive appreciation of RMB (if Euro stops depreciating more against USD) until Nov, after which we are likely to see a reversal of RMB to give back some of the gain during the second half of the year.

On the other hand, however, it is worth noting that the above base case is purely based on Chinatells' reading of political power balancing between Beijing and Washington, which is in itself highly opportunistic and subject to change. After all, in a lot of times, even politicians themselves are not 100% sure to manage the situation under full control. By November, there are still quite possibly a few blowout, such as the European debt crisis, Korean peninsula tension, and Iran nuclear aggression that could change the political dynamic, in any of which above cases RMB could well be utilized as a stake on the negotiation table. It is exactly for this reason that Chinatells would advise speculators not to put too much time in speculating such a seemingly free lunch on the table.]]></description>
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		<slash:comments>1</slash:comments>
		</item>
		<item>
		<title>China&#8217;s Manufacturers struggle on Profit Margin (糊口饭不容易)</title>
		<link>http://blog.chinatells.com/2010/05/4364</link>
		<comments>http://blog.chinatells.com/2010/05/4364#comments</comments>
		<pubDate>Fri, 28 May 2010 00:47:00 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Investing China (投资视角)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>
		<category><![CDATA[Stats China (统计图表)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=4364</guid>
		<description><![CDATA[China's manufacturers, especially the low value added ones, are struggling on the brink of survival and bankruptcy. According to a latest study, the low value added industry lives on an average gross profit margin of less than 4%. If RMB is appreciated by more than 4%, that will wipe out all the profit margin of the low value added exporters, which could potentially result in a spike in unemployment rates.

中国制造商的毛利率其实非常有限，尤其是低附加值加工厂家，常年在4%以下的毛利率附近徘徊。在这种情况下，如果人民币一下子升值超过4%，那这些厂家的生存就发生很大问题。因此政府在这个问题上应该会相当谨慎，不太会轻易冒让这些出口商倒闭的风险。]]></description>
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		<slash:comments>1</slash:comments>
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		<item>
		<title>What&#8217;s the link between Greek Crisis and RMB (希腊债务危机和人民币)</title>
		<link>http://blog.chinatells.com/2010/05/4350</link>
		<comments>http://blog.chinatells.com/2010/05/4350#comments</comments>
		<pubDate>Sun, 23 May 2010 08:38:38 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Investing China (投资视角)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=4350</guid>
		<description><![CDATA[The ongoing Greek debt crisis seems remotely linked to China's economy. People would be surprised to see any serious contagion of Greek debt crisis to China's banking sector. On the other hand, the argument goes that the Greek debt crisis delays the pace of RMB revaluation, as RMB has actually already appreciated against Euro from about 10.2 to 8.5 since December (an appreciation of 16%, See chart above). It is argued that RMB revaluation is a multi-lateral and long term process as a part of global rebalancing (See Article from Michael Pettis HERE). Given the weaker Euro outlook, the surplus economies in Europe is likely to benefit by gaining more trade surplus (eg., Germany). A byproduct of such transition would be that either the European peripheral economies (eg., Portugal) would gain more deficit (which is unlikely given their weaker currency and fiscal consolidation plan) or the world's other surplus countries would have to reduce their current account surplus (eg., China and Japan). It looks like China and Japan might be the loser in this game.

欧元汇率在最近4个月发生了很大波动，主要源于希腊的债务危机。关于希腊债务危机对于中国的影响，众说纷纭，各有见解。最普遍的意见是中国银行在希腊放债量微不足道，因此不会受什么影响。对于人民币汇率，也有论调认为由于欧元对于人民币大幅贬值，因此人民币升值步伐将被放缓，主要原因是由于欧元的贬值，人民币的升值过程已经被动完成了。基本上看来，由于欧元的贬值，德国和北欧出口型国家将受益，而中国和日本的出口将受到影响。]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>Roubini: Clearly a Peking Duck (人民币汇率有被操纵么)</title>
		<link>http://blog.chinatells.com/2010/04/4211</link>
		<comments>http://blog.chinatells.com/2010/04/4211#comments</comments>
		<pubDate>Sun, 04 Apr 2010 00:28:36 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Bear China (唱衰集团)]]></category>
		<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=4211</guid>
		<description><![CDATA[Nouriel Roubini is a professor of economics at the Stern School of Business, New York University and chairman of Roubini Global Economics, an economic consultancy firm. The New York Times labeled him "Dr. Doom", whereas, in hindsight, IMF economist Prakash Loungani has called him "a prophet".

Doctor Roubini wrote on Forbes as of April 1, 2010 (Read Article here) that China is likely to be labeled as ‘currency manipulator’ by USA. According to Dr. Roubini, ‘There is no doubt that China is manipulating its currency…it looks like a duck and acts like a duck – it is clearly a Peking duck’.

To be fair, I tend to agree with Doctor Doom that China’s FX policy shows a sign of manipulation in the last 12 months by ‘soft pegging’ the RMB to USD. It would be difficult to argue that a ‘fixed FX policy’ is not ‘manipulation’. Ironically, the pegging per se is a double edged sword. For example, by pegging RMB to USD, the trade weighted exchange rate of RMB actually appreciated significantly during Q4 ’08 and Q1 ’09 following a resurgence of USD (See Graph from Chinatells). Therefore the rate change of RMB is not a purely ‘manipulated’ one way move. By appreciating and then depreciating together along with USD, the net effect is limited change with much lower volatility, which is quite helpful to the importers and exporters (Read Article from Chinatells).

Nevertheless, the net effect does not provide a good enough reason for Americans not to attack the RMB policy, especially in a country with 10% unemployment rate ahead of the mid term election. The US government has decided to delay the announcement of ‘currency manipulator’ after President Hu Jintao’s visit to Washington DC in mid April. The ugly side of International politics starts to surface: Iran for RMB? Clearly the American politicians intend to keep the currency issue as a bargain stake and make the most of it on the negotiation table.

To me, whether China will be labeled as a ‘currency manipulator’ is unpredictable, as the meeting between President Hu Jingtao and President Obama is highly contingent and full of chance of surprise. What is certain to me, however, is the resumption of a trend for RMB to re-appreciate gradually against USD. In fact, China government might accelerate the appreciation of RMB without external pressure from USA, as it is a big loss of face if the government shows a sign of bowing to foreign pressure. With China’s export growth back to pre-crisis level, an domestic pricing back to positive growth territory, it seems to me that RMB appreciation is back to the agenda and China government would rather let RMB appreciate within a controlled pace than jeopardizing the export market and international tension.

Following this logic, in an ideal situation, China probably is unlikely to be labeled as ‘currency manipulator’ if President Hu Jingtao negotiated a satisfactory deal in Washington. Give and take, isn’t it the universal law in dealing with all kinds of relationships?

纽约大学商学院经济学教授鲁比尼近日在福布斯杂志上撰文指出，中国显然在操纵人民币汇率。由于美国国内失业压力陡增，同时中期选举近在眼前，因此美国政府可能将中国列为‘汇率操纵国家’并且加以制裁。这次四月中期胡主席访问华盛顿可能成为中国是否被列为汇率操纵国的关键。届时伊朗问题，削减核武器和人民币汇率可能都会被拿上台面作为双方互相谈判的筹码。]]></description>
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		</item>
		<item>
		<title>Big bet on RMB Appreciation (人民币升值豪赌)</title>
		<link>http://blog.chinatells.com/2010/01/3885</link>
		<comments>http://blog.chinatells.com/2010/01/3885#comments</comments>
		<pubDate>Tue, 05 Jan 2010 09:55:45 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3885</guid>
		<description><![CDATA[According to the deputy head of China's National Development and Reform Commission, Mr. Zhang Xiaoqiang, there is a potential of huge amount of hot money to be channeled into China in 2010 in the expectation that RMB will be revalued (See Article from Business Week).  With the world's fastest growing rate in GDP, China continues to be the top investment destination for investors around the world. China's stock market and property market had an impressive run with huge volatility in 2009, and it seems that the interests from global investors are only elevated in the coming new year.

中国在2010年可能有巨量热钱涌入，主要基于人民币升值的预期。由于中国经济表现一直独秀，外汇盈余增加，出口反弹，一系列利好因素使国际游资极度看好中国资产价格以及人民币的增值潜力，估计这股洪流在10年只会愈演愈烈。
]]></description>
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		</item>
		<item>
		<title>The secret of China&#8217;s currency Basket (货币篮子里有啥菜)</title>
		<link>http://blog.chinatells.com/2010/01/3876</link>
		<comments>http://blog.chinatells.com/2010/01/3876#comments</comments>
		<pubDate>Tue, 05 Jan 2010 04:10:00 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Investing China (投资视角)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3876</guid>
		<description><![CDATA[A lot of theories have been advocated to explain and predict China's currency regulation. Out of so many various opinions, one hypothesis is particularly interesting. According to Albert Keidel, the former deputy director for the Office of East Asia Nations at the US Department of Treasury, the reason why China government seemed to have 're-pegged' RMB to USD is that the basket policy has indicated to DEPRECIATE RMB (See Article from WSJ). As a matter of fact, China government has announced to peg the valuation of RMB to a basket of currency since 2007. Starting from then, RMB has appreciated against USD gradually according to the guidance of 'basket value'. In Oct 08, however, situation started to change. USD appreciated sharply during then due to global capital's desire to fly to safety (See Graph from Chinatells). Under that scenario, RMB should depreciate against USD based on the guidance from 'basket policy'. However, due to political reasons, China government is aware that any depreciation of RMB against USD is likely to cause explosive reaction from Washington. Therefore as a result China government chose to keep RMB's rate unchanged, which appears to be pegged to USD. Based on such logic, RMB is likely to be revalued according to the 'basket guidance' when USD continues to be depreciated to around $1.6 against EUR.

中国政府在07年宣布将人民币汇率与美元汇率脱钩，并且换成一揽子货币。从那以后人民币对美元稳步升值。但是到了08年下半年，人民币升值步伐停止，由此与美元汇率锁定于6。8左右。对于此现象美国一位经济观察家猜测由于篮子政策，人民币应当在08年对美元贬值，但是由于政治效应中国政府不想看到华盛顿反应过激，因此选择保持汇率不变。该猜测符合东方人的处事风格，有一定的可能性。]]></description>
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		<slash:comments>1</slash:comments>
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		<item>
		<title>A debate on RMB Valuation (人民币币值争鸣)</title>
		<link>http://blog.chinatells.com/2010/01/3870</link>
		<comments>http://blog.chinatells.com/2010/01/3870#comments</comments>
		<pubDate>Mon, 04 Jan 2010 12:50:21 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Publication (出版发行)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3870</guid>
		<description><![CDATA[In the last six months the foreign exchange policy of China has been on the headlines of most international newspapers. On one hand there is a lot of international pressure calling China government to reconsider its FX policy to peg the RMB to USD. On the other hand China government continues to state a firm stand that FX policy is a domestic only issue, which will not be affected by foreign impact.]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>A debate on RMB policy again (人民币汇率政策再议)</title>
		<link>http://blog.chinatells.com/2009/12/3847</link>
		<comments>http://blog.chinatells.com/2009/12/3847#comments</comments>
		<pubDate>Wed, 30 Dec 2009 03:44:51 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3847</guid>
		<description><![CDATA[Yes, it is RMB, again and always. For economists and journalists all over the world, RMB policy is increasingly becoming an icon to be challenged and defeated. A recent article from Economist is one of such challengers. Unfortunately, the arguments from that article are not necessarily robust and convincing enough. Here goes the argument: 1) RMB should be revalued as RMB has depreciated 14% in the last 10 months. This argument can be defeated easily by looking at a currency chart for the last 18 months (See Graph from Chinatells). In fact, with a close look at the movement of world currency in the last 18 months, a peg policy to USD probably wins as it provides stability and predicatability, which is good news for corporates involved in international trade; 2) RMB shall be revalued to address the global 'imbalance'. Another cliche, but even more unsounding than the first argument. In fact, the world economy has never been in a 'balanced' status and it would be a mistake to bark on the wrong tree to try to establish any causality between RMB policy and global imbalance (See Article from Chinatells). 3) China is too dependent on investment for growth, therefore RMB need to be revalued to adjust the economy growth model. It is a big question mark whether China is over dependent on investment. In fact, there are good counter argument on this issue (See Discussion from Chinatells). A commonly missed point is that China has a super high saving ratio, which makes its current investment ratio not necessarily high.

Overall, the RMB FX issue is a complicated one and need careful review. One will never reach a complete and objective conclusion without digging deep and thinking hard. Any simple-mindness like the article from Economist is exposed to a caveat to look into the matter from a biased perspective and therefore leads to premature conclusions.

人民币汇率政策总是能在国际论坛中引起激烈辩论。最近经济学家上的一片文章即是例证之一。可惜有很多类似的文章只见其一不见其二，提出要求人民币改汇的理由基础薄弱，逻辑混乱，很容易即被驳倒。总体而言，人民币汇率是一个比较复杂的问题，如果人云亦云，很容易得出肤浅的结论。]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>Is RMB really under valued? (人民币低估还是高估)</title>
		<link>http://blog.chinatells.com/2009/12/3739</link>
		<comments>http://blog.chinatells.com/2009/12/3739#comments</comments>
		<pubDate>Thu, 17 Dec 2009 23:01:39 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Stats China (统计图表)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3739</guid>
		<description><![CDATA[It is never easy to find out the truth, including the proper value of RMB. During the last 6 months, most currencies of emerging economies have appreciated against USD except RMB. Such a fact has aroused international pressure from China's trading partners pushing China government to reconsider the pegging policy of RMB to USD (See Article from Chinatells). As a matter of fact, some currency (eg., Brz real) has appreciated more than 30% against USD. With RMB de-facto pegged to USD, in fact RMB has been depreciated against these currencies as well, giving China an added advantage for its export in the interantational trade competition. Therefore, to make the game 'fair', value of RMB shall be appreciated to the similar level as other EM currencies.

The argument goes without any problem so far. However, if we expand the time span a little bit, from Mar-Oct 09 to Aug08-Oct09 (starting from when the financial crisis unfolded), we see a totally different picture. Surprisingly, RMB is the strongest currency during that period (FX unchanged), while most other EM currencies have depreciated against USD more or less. An obvious conclusion from such comparison is that RMB is not over or under valued against any other currency, it is the de facto most stable currency among all. The recent appreciation of other currencies, such as Brz Real or Korean Won, is just an adjustment to their depreciation during an earlier period. From that perspective, the so called 'free flotation' only adds volatility to the other currencies, while not giving any benefit in terms of stablizing trade or keeping a proper value. Following this logic, there is a good point from China's government to fix the RMB rate to USD, period.

人民币汇率一直是国际争论的主要话题之一。中国政府经常受到国际压力要求重估人民币，或者放弃对美元的挂钩。该压力在最近6个月达到顶点，主要原因是美元在最近6个月连续下滑，造成其他主要货币对美元都有或多或少的升值，而人民币岿然不动，自然引来怨言。但是如果以一个更加长远的时间纬度来看这个问题，就会发现从08年8月份以来，人民币其实是在所有新兴经济货币中升值最多的货币。所有在最近六个月升值最凶的货币，也是在过去1年中贬值最厉害的货币。明白了这点，也就明白了为什么人民币保持目前汇率是最合理的方案的原因。]]></description>
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		<slash:comments>3</slash:comments>
		</item>
		<item>
		<title>China&#8217;s Dollar Debacle: Deja Vu again? (历史重现)</title>
		<link>http://blog.chinatells.com/2009/12/3593</link>
		<comments>http://blog.chinatells.com/2009/12/3593#comments</comments>
		<pubDate>Thu, 03 Dec 2009 21:59:15 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3593</guid>
		<description><![CDATA[As the biggest creditor of USA, China plays a significant role in influencing the policy of Washington. However, China's huge reserve in USD and US Treasury is also vulnerable to any meaningful move from US government's fixcal policy and the move of other major creditors (See Graph from Chinatells). How China government deals with this dilemma is the main challenge in the near future (See Article from WSJ). Looking back into the history, GIC countries used to face a similar difficult situation. During the 1970s when oil crisis happened twice during that period, gulf countries went through a few strategies to defend their reserve in USD. First the oil producers propose to price the oil in alternative currencies; second OPEC countries let the oil price go up in part to compensate the value loss in USD, and last some OPEC members did shift the reserve from USD to others. It seems that some of the strategies that China government is using now is similar to the above. It takes time to review and judge whether China's strategy will be successful in preserving the value of their reserve and in the meanwhile push Washington to be serious about Dollar's value.

中国是美国最大的债主国。因此中国对于华盛顿的许多政策都有能力加以影响。但是同时，中国的巨额外汇储备也是一大风险。历史上石油出口国曾经遇到过类似情况。70年代石油危机美国通胀肆虐，美元币值有大幅贬值的危险。石油国家通过一系列精心策划的策略成功逼迫美国政府大力整顿通胀并且保护了美元币值。这次中国能否取得一样或者更大的成功让人拭目以待。]]></description>
		<wfw:commentRss>http://blog.chinatells.com/2009/12/3593/feed</wfw:commentRss>
		<slash:comments>1</slash:comments>
		</item>
		<item>
		<title>China shall reconsider its FX Policy (人民币政策再论)</title>
		<link>http://blog.chinatells.com/2009/11/3520</link>
		<comments>http://blog.chinatells.com/2009/11/3520#comments</comments>
		<pubDate>Thu, 26 Nov 2009 22:29:51 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>
		<category><![CDATA[Publication (出版发行)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3520</guid>
		<description><![CDATA[During President Obama’s visit to Beijing, one of top priority topics that he discussed with President Hu Jingtao is the exchange rate of RMB. Due to the fact that RMB is pegged to USD, so claims Obama, it is artificially under valued and does not reflect the true Purchasing Power Parity. Such an under valuation is one of the major causes for a global imbalance: China accumulates huge surplus and USA accumulates huge deficit. In fact, according to the latest figure from National Bureau of Statistics, China’s trade surplus reached 24 Billion USD in October 09, which is a fifth month of consecutive increase y-o-y in its trade surplus (See Graph below). Therefore, to address such an imbalance, so goes the logic, China government need to revalue RMB or loosen the peg.]]></description>
		<wfw:commentRss>http://blog.chinatells.com/2009/11/3520/feed</wfw:commentRss>
		<slash:comments>2</slash:comments>
		</item>
		<item>
		<title>Is Money leaking out of the Country (金钱大逃亡)</title>
		<link>http://blog.chinatells.com/2009/11/3492</link>
		<comments>http://blog.chinatells.com/2009/11/3492#comments</comments>
		<pubDate>Mon, 23 Nov 2009 10:38:33 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Macro China (国际视点)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3492</guid>
		<description><![CDATA[The world is feeling the impact of Chinese, especially rich ones fully loaded with hard Cash (See Article from WSJ). Starting from Q2 of 2009, significant volume of mainland cash finds its way into nearby more open cities such as Hong Kong and Macau, pushing up the price of local property (See Article from chinatells). It is against the will of Beijing as there are regualtions to limit the capital outflow. However, there are countless ways to bypass such regulations and it is literally impossible to stop the flow. On the other hand, it reflects the need of Chinese rich to find an international city with first class infrastructure and decent education and healthcare system. Hong Kong ticks the boxes on the list and becomes one of the hot spot.

中国大陆富人云集。基于13亿人口基数，即使0。1%的富人人口也足以震撼全世界。至少香港明确感觉到了这种震撼。香港的高档住宅在09年上升了30%，主要就是由大陆富人撑起的一片天。大陆有有关政策限制资本外流，但是上有政策下有对策，香港由于其国际的开放性和较好的教育体系成为大陆富人向往的移民居所。
]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>RMB to be progressively internationalized (人民币国际化步步为营)</title>
		<link>http://blog.chinatells.com/2009/11/3480</link>
		<comments>http://blog.chinatells.com/2009/11/3480#comments</comments>
		<pubDate>Sat, 21 Nov 2009 02:12:34 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3480</guid>
		<description><![CDATA[It is not a secret that China government wants to push the internationalization process of RMB and change the USD dominated world trade. It is easier said than done. However, there are material steps being taken through Hong Kong, which serves as a bridge between China and international community (See Article from Fortune). As Hong Kong Dollar is freely convertible to world currencies, it is a perfect channel for RMB to go through a progressive journey for afloatation in the end. I think it is a very smart strategy from China's government to achieve the goal step by step: they are particularly good at making progressive change without causing any unnecessarily dramatic change to the daily life of people. With the current pace of China's economy development, it looks very likely that RMB will eventually become the major curency in East Asia and one of the world's three dominant currencies along with USD and EUR.

中国政府想要在全世界推行人民币国际化的决心路人皆知。问题是如何实现这一目标。目前看来，主要的突破口在香港。香港作为自由金融地区贸易中心，有着得天独厚的条件作为连接中国大陆和外部世界的桥梁。最近一系列推行人民币自由化的措施都选择在香港进行自然有其道理。长期来看人民币很有可能和美元欧元三分天下，正合了一句老话：合久必分，分久必合。
]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>RMB passively depreciated in 09 (人民币被动贬值)</title>
		<link>http://blog.chinatells.com/2009/11/3472</link>
		<comments>http://blog.chinatells.com/2009/11/3472#comments</comments>
		<pubDate>Sat, 21 Nov 2009 00:58:39 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>
		<category><![CDATA[Stats China (统计图表)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3472</guid>
		<description><![CDATA[Sometimes if we view the same thing from different perspectives, we arrive at totally opposite conclusions. The exchange rate of RMB is suh an example. Due to the fact that RMB is pegged to USD, in 2009 when USD keeps losing value during most of the year, RMB loses its value against other emerging economies' currency such as BRL, RUB and INR. This is one of the major complaints from China's trading partners other than USA (See Article from Chinatells).

由于人民币汇率紧盯美元，导致人民币在09年跟着美元被动贬值。从09年1月份开始，世界上大部分自由浮动的货币均对美元有不同程度的升值，而人民币岿然不动。这也是中国的贸易伙伴对人民币汇率政策不满的主要原因。
]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>RMB in essense is a China-US issue (人民币汇率影射中美角力)</title>
		<link>http://blog.chinatells.com/2009/11/3451</link>
		<comments>http://blog.chinatells.com/2009/11/3451#comments</comments>
		<pubDate>Wed, 18 Nov 2009 01:22:18 +0000</pubDate>
		<dc:creator>Wushu</dc:creator>
				<category><![CDATA[Currency China (汇率解析)]]></category>

		<guid isPermaLink="false">http://blog.chinatells.com/?p=3451</guid>
		<description><![CDATA[During Obama's visit to Beijing, one of top priority topic that he will discuss with President Hu Jingtao is the exchange rate of RMB (See Article from WSJ). Due to the fact that RMB is pegged to USD, so claims Obama, it is artificially under valued and does not reflect the true PPP. Such an under valuation is one of the major causes for a global imbalance: China accumulates huge surplus and USA accumulates huge deficit (See Graph from Chinatells). To address such an imbalance, therefore, China government need to revalue RMB or loosen the peg. The counter argument from China government, however, is that how US can demand China to revalue its currency while US themselves are letting the USD slide in a free fall? It seems very unfair that US government is applying double standard to its own currency and someone else's currency. I think it is a valid point from China government. However, there is a weakness in such policy: it upsets the other trading partners such as EU and Japan. By sticking RMB to USD, China government is right to say that it is a policy of stablizing the exchange rate; however in fact RMB has depreciated against JPY and EUR thanks to the depreciation of USD against almost all the currencies. Now, the question comes: US seems untouchable in determining their currency value and the rest of international community seems no choice but to accept it. Can China do the same? Or, another question is, even if China has the muscle to execute an exchange policy similar to US', which is totally independent with government's free will, is it the right time to pursue it?

奥巴马总统访问北京期间,人民币汇率成为中心议题之一.当前不仅美国,还有中国其它的贸易伙伴对人民币汇率颇有微词.由于人民币和美元汇率锁定,而最近一段时间美元跌的很厉害,因此人民币相对于其它货币也少不了贬值,这样无形之间增加了中国产品出口的竞争力并且削弱了其它国家的出口行业.在这个问题上,中央政府如何斗智斗勇化解矛盾将十分惹人注意.]]></description>
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		<slash:comments>0</slash:comments>
		</item>
	</channel>
</rss>

