China New Zealand Online Shanghai, June 14 - Friction problems arising in the field of trade may trigger a competitive devaluation of exchange rates in many countries around the world once again. Zhou Xiaochuan, president of the China Finance Society and former president of the Peoples Bank of China, said at the 11th Lujiazui Forum on 14th.
Zhou Xiaochuan Data Map.
Zhou Xiaochuan pointed out that there are no winners in trade frictions, because trade frictions will hit the confidence of different people, but also the financial market. After the trade frictions occur, if you do not want to suffer losses, the possibility is often caused by exchange rate devaluation, which is prone to re-emergence, such as the so-called competitive devaluation since the global financial crisis.
Zhou Xiaochuan said: In this case, the adjustment of macro-policies will certainly play a positive role, but these macro-policies are generally aggregate policies. It is difficult to directly compensate exporters and importers who suffer losses due to trade frictions. It is very difficult for loose monetary policies to be transmitted to specific points.
Zhou Xiaochuan believes that under the short-term macro-policy adjustment, we should also pursue more radical measures. First, we should normalize the wrong trade policies through trade negotiations, and second, we should formulate some policies to encourage diversified export development.
In response to the current trade frictions between China and the United States, Zhou Xiaochuan said: The quality of Chinas exports is quite good, the price is reasonable, there are more than 7 billion people in the world, there are many places to sell these products.
Zhou Xiaochuan emphasized that if we cooperate in the field of trade, then the productivity formed is the most efficient and beneficial to all of us. If we want to split up, it will reduce the speed of development and increase the cost of everyone.
For the future development of Chinas finance, Zhou Xiaochuan said that further financial opening is very important. In Chinas banking, insurance and capital markets, the proportion of external funds or institutions is still very low, so there is great potential. In the process of opening up, the local currency should be distorted from the past valuation, and more restrictions should be slowly moved towards free use and convertibility. At the same time, corresponding risk prevention should be carried out.
As for the development prospects of RMB, Zhou Xiaochuan said, The RMB and the US dollar are complementary to each other to a great extent. When the financial crisis happened, the global demand for RMB exceeded our expectations. This is beneficial to the stability of Global trade settlement, trade financing and financial confidence of neighbouring countries. I think this is a complementary process.
Source: Gu Yunting_NBJS8499, Responsible Editor of CNN