Why the RMB has been appreciating in recent stages, what is the impact on foreign trade?

Why has the RMB been in a state of appreciation in the recent period? Does the appreciation of the RMB affect foreign trade exports?

What is the appreciation of the renminbi? One of these words is exchange rate.

The simple explanation is that currency is regarded as a commodity, then the exchange rate is the value ratio of the two commodities. Comparing the U.S. dollar and the renminbi, the appreciation of the renminbi means that the value ratio of the two has decreased, that is, the exchange rate has decreased, which also indicates that the dollar has depreciated.

There are many reasons for the recent appreciation of the renminbi, but in the final analysis, they are all closely related to social stability and economic growth. With the outbreak of a global epidemic, China is the first country in the world to achieve positive economic growth during the epidemic. The economic situation has introduced a large amount of foreign capital investment. Due to social stability and national security, more funds worldwide are used to purchase Chinese bonds.

The result of this is that foreign currency reserves are getting higher and higher, and less investment is made, and the renminbi will naturally appreciate. It is also due to the epidemic that Chinese people consume less overseas and cannot go out, which reduces the exchange of foreign currency. The tourism market that should have been consumed abroad is turned into the domestic tourism market, which will also cause the appreciation of the renminbi.

Furthermore, the international economic cooperation policies that China has successively thrown out in recent years and the uncertainty of global market recovery have all contributed to the appreciation of the renminbi.

At present, the global epidemic is still spreading, and the asymmetry of the shortage of vaccine resources will not cause the epidemic to be controlled and eliminated in a short period of time. Under such circumstances, the appreciation of the RMB will continue. The appreciation of the RMB is a long-term challenge for Chinese foreign trade companies, but it is indeed an opportunity in the short-term. In the short term, due to the normal production of Chinese companies, a large number of foreign orders can be obtained.

In the long run, Chinese companies need to optimize costs more and increase market uncertainty due to the appreciation of the RMB. Under the circumstances that the global economy is generally normal, the appreciation of the RMB will have a direct and obvious impact on China's foreign trade exports, especially the exports of production enterprises, with reduced profits, reduced orders, and increased risks.

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