Although the United States still to RMB exchange rate bricks, but the inner power is disappearing appreciation, short-term or end appreciation cycle.

China's central bank data shows, on October the China foreign exchange combines negative growth 24.892 billion yuan, for the first time in four years of negative growth. Foreign exchange combines negative growth, means the base currency stock reduce, inflation pressure was ebbing away.

Foreign exchange combines negative growth representation of the is behind, the trade surplus reduced gradually, capital outflows increased.

As the debt crisis, China's exports have been steadily situation, at the same time, still keep higher import growth, this makes the trade surplus reduced gradually, October trade surplus of $17.033 billion, less than the market consensus forecasts. And the debt crisis also lead to the European and American market liquidity squeeze, hot money backflow phenomenon to appear. In addition, China's foreign investment has increased in the initiative, which New Era Hats is an important method of digestive foreign exchange stock. Of course, also means that foreign capital outflows do not expect the yuan rise. November 24, overseas RMB non-deliverable forwards NDF also show that the future of January to the 2 years to the dollar exchange rate is lower, the display forward markets appear yuan depreciation expectations.

These signs, China for making the trade balance efforts have to achieve the result. Considering the global trade in a certain period are hard to return to pre-crisis levels, China's export growth is a few can, yuan appreciation cycle or will end.

From July 2005 RMB yuan reform since then, the yuan in actual use two kinds of methods to equilibrium exchange rate gets close, one is the nominal exchange rate appreciation, and the second is inflation, the former intends to accelerate the pace of currency appreciation speed, the latter is intended to reduce appreciation potential. Inflation be RMB reduce the cost of nominal appreciation, and the cost was once China increased economic imbalances. Now look, with China's economic surplus factors ease China economy gradually to the health development.

If the appreciation of the renminbi end of cycle, the Chinese economy will have a new situation.

First, inflation power loss, economy into low inflation low growth stage. This round of inflation in long-term factor is the gap in foreign exchange currency shares. Due to the surplus, expanding the gap increasing foreign exchange, the base currency by serious, inflation pressure increasing. The process of Chinese control inflation, is to reduce the gap of the actual foreign exchange process. In addition to tighten monetary, the adjustment of economic structure,baseball hats reduce the need to rely on is also an important means of foreign. The appreciation of the renminbi and structure adjustment of the net result is that inflation is contained, economic growth will enter the low speed stage.

Second, assets feast end, asset prices decline inevitable.

Whether house prices high, or works of art, such as jade investment crazy, are behind the currency stock by constantly, push prices expected be caused by. As exchange combines negative growth, monetary growth stock be suppressed, asset prices boosted the monetary power no longer exists, information product price is not rising power. Once the prophet to illuminati cast goods, asset prices from inevitable highs, appear then dramatic changes to the situation. In fact, the real estate control policy has not important, really support the currency of the land price and house prices factors vanish, even if cancelled , real estate prices will still downward adjustments.

Third, the prices to adjust the relation, improve human cost.

Money by reducing, money supply, nervous, capital-intensive investment will be under control. At the same time, because of "population dividen" disappeared, labor supply curve will move up. From the perspective of growth, by human alternative capital, or become an important means of short-term maintain growth, and labor demand growth, will lead to human costs rise, further wage growth, and this will change the way the income distribution, dividend growth to labor elements tilt.

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