China Is Unmoved by Talk To Revalue Its Currency
SHANGHAI -- Might China be getting ready to revalue its currency?
Don't bet on it.
That's the message emanating from Beijing these days, as central bankers and other policy makers in China seek to quash talk that the nation's currency, the yuan, is ripe for a substantial appreciation. Such talk gained momentum during the past few years as Chinese exports took the world by storm. It gained new traction last week, when U.S. Treasury Secretary John Snow suggested it was time for Beijing to stop meddling in the market and let fundamentals set the yuan's value. Given China's yawning trade surplus and huge foreign-investment inflows, such a move could mean only one thing: a stronger yuan.
Yet despite the gathering political pressure, Beijing remains unmoved. Indeed, even as Mr. Snow signaled his desire to see a more flexible Chinese currency regime, China's own finance experts were debating a different issue -- how to increase tax rebates for its exporters, a move that would make Chinese exports more, not less, competitive. Such subsidies, which amount to refunding the value-added taxes paid during the manufacturing process, have long been a major policy tool used by China to keep its export machine humming.
The ways in which China subsidizes its exporters has long been a hot-button topic. But it is even more explosive these days. Because China's currency is effectively pegged to the dollar, each drop -- or rise -- in the U.S. currency amounts to a similar movement in the Chinese unit. With the recent weakening of the U.S. dollar against other major currencies, American manufacturers hoped to gain a new measure of competitiveness. But some of those gains have failed to materialize, thanks to the yuan's lock-step fall with the dollar, which has left Chinese exporters with similar currency advantages.
The upshot: As anger among U.S. manufacturers rises, allegations are flying that China is becoming a habitual currency manipulator. For now, that criticism is falling on deaf ears in Beijing. Indeed, the fact that Beijing is considering new ways to support its exporters at such a sensitive moment shows how little interest China has in jeopardizing a crucial pillar of its economy. It also serves as a reminder of how little stock China puts in the raging debate over the proper value of its currency.
"It's simply not in China's interest" to revalue the yuan, says Wang Yuanhong, senior economist with the State Information Center in Beijing. "And certainly the government takes our country's interest as its priority."
It is easy to understand Beijing's position. For China, revaluing its currency offers minimal benefits. Among the most obvious, a stronger yuan would make it cheaper for Chinese companies to purchase foreign assets and expand overseas. It would reduce the nation's foreign-debt load and make it cheaper for Chinese companies to import foreign technology.
Yet for China, the downside of a stronger yuan far outweighs the benefits. By increasing the purchasing power of the yuan, a revaluation would create strong deflationary currents in China -- just as the country is emerging from years of deep price declines. That could make it more difficult for Chinese companies to turn a profit and ultimately compound the problems facing state-owned banks, which are sitting on an estimated $500 billion in bad loans.
Financial Overhaul
A stronger yuan would spell slower growth in the country's foreign-exchange reserves -- possibly delaying financial overhauls. Though China's central bank holds $316 billion in hard currency, central bankers and government economists say more is needed before Beijing feels comfortable liberalizing interest rates and floating the domestic currency.
Perhaps more than anything, Chinese officials fear a stronger yuan could hammer exports and foreign direct investment -- and ultimately job creation. Though China's economy is growing at about 8%, that figure is misleading, Chinese economists say, because some parts of China are seeing little if any growth at all. The result: Aside from a handful of industries such as construction and property development, many new jobs these days are created by Chinese export companies and foreign-invested ones, many of which also export their wares.
In a country with 1.3 billion people and a jobless rate already in double digits, the importance of job creation to China's political leaders can't be underestimated, says Qu Hongbin, an economist with HSBC Holdings in Hong Kong. "Basically, the only way it [revaluation] will happen is if China gets a guarantee from other countries that they will help solve the job problem it creates," Mr. Qu says.
Though a yuan revaluation could benefit companies that manufacture in the U.S., there is a flip side there, too: By making Chinese exports more expensive, a revaluation would hurt a wide swath of U.S. corporations, some of which rank among China's biggest exporters. As the cost of goods produced by U.S. companies in China increases, it could hit the pocketbooks of U.S. consumers, who have been buying Chinese goods in record amounts in recent years.
Motorola Inc., with more than $3 billion invested in China, is one example of how this chain-reaction could play out. Last year, the U.S. telecommunications-equipment maker rang up sales of $5.7 billion in China. However, nearly $2.6 billion of that came from exports, a large chunk of which went to the U.S. A spokeswoman for the company, Mary Lamb, declined to comment on the disadvantages of a stronger yuan, but acknowledged it would translate into higher costs for U.S. consumers who buy goods the company makes in China.
Ticking Higher
Even if China bows to U.S. pressure and allows the yuan to tick slightly higher, Beijing almost is certain to find ways to offset the impact, government economists say. One of the simplest ways is by increasing government tax rebates to exporters.
Though it is unclear if this would be a violation of the terms of China's membership in the World Trade Organization, the effort is already under way. Earlier this month, the country's finance minister was quoted in state media as saying the ministry was working on ways to increase the size of rebates offered exporters -- now about 10% -- while speeding payment of $24 billion in rebates in arrears.
Mr. Wang of the State Information Center says: "The damage of a significant appreciation of the yuan will affect not only China, but the world economy and, in the long run, the U.S. too."
中国对要求上调人民币汇率的呼声无动于衷
中国是否已准备调整人民币汇率了呢？还是不要把宝押在这上面吧。
中国官方最近也是这么暗示的，中国央行的官员和其他部门的决策者们希望能止住所谓人民币大幅升值的时机已经成熟的说法。过去几年来，随著中国的出口产品流向世界各地，上述说法也甚嚣尘上，上周再次引起了人们的关注，当时美国财政部长斯诺(John Snow)表示，中国现在应停止干预市场，让基本面因素来决定人民币汇率。鉴于中国拥有巨额贸易顺差和外资流入，让市场决定必然导致人民币升值。
但是，尽管政治压力不断加大，北京依然不为所动。事实上，就在斯诺表示希望中国能够采取更灵活的外汇政策时，中国财政部门的专家却在讨论另外一个问题：如何提高对出口企业的退税，而这将使中国的出口商品更具竞争力。出口退税是将生产过程中徵收的增值税返还给出口企业。长期以来，中国一直实行这一刺激出口增长的补贴政策。
出口退税政策一直是个热门话题，近来，围绕这一话题的讨论更是到了白热化的程度。 由于人民币实行与美元挂钩的汇率制度，一旦美元升值或贬值，人民币也会随之波动。最近随著美元贬值，美国制造商原本希望其出口产品的竞争力能有所提高，但这一愿望并未充分实现，原因是人民币也随美元同步下跌，中国出口产品的竞争力也相应提高了。
结果，美国制造商的不满情绪日甚一日，对中国惯于操纵人民币汇率的指责也漫天飞扬。但目前北京对这种批评还是置若罔闻。就在这种敏感的时候，北京还在考虑扶持出口企业的新办法，这本身就足以说明，中国无意将作为其重要经济支柱的出口业置于危险境地，同时也表明，中国对眼下如火如荼的人民币汇率之争并不重视。
中国国家信息中心(State Information Center)资深经济学家王远鸿说，调整人民币汇率不符合中国的利益，中国政府当然要把本国利益放在首位。
中国政府的这种立场很容易理解。对中国来说，人民币升值的好处很有限。最显而易见的好处就是，这将降低中国公司购买外国资产和进行海外扩张的成本，还会降低中国外债总额，并使中国公司得以以较低价格进口外国技术。
然而，人民币升值对中国来说弊大于利。人民币升值将导致其购买力提高，从而导致严重的通货紧缩，而中国刚刚摆脱过去几年物价大幅下跌的状况。这可能会使中国公司更难以实现赢利，最终还会加重国有银行面临的问题，这些银行的坏帐总额已达5,000亿美元，到了不堪重负的地步。
同时，人民币升值还将导致中国外汇储备增速放缓，从而有可能推迟金融改革。尽管中国央行拥有3,160亿美元的储备，但央行官员和政府部门的经济学家认为，外汇储备还需要进一步增长，政府才能毫无顾虑地放开利率和汇率。
中国官员最担心的恐怕莫过于人民币升值可能会影响出口和外国直接投资，最终影响到就业。尽管中国经济增长率在8%左右，但是中国经济学家称，这一数字容易产生误导，因为实际上中国有些行业的增长几乎陷入停滞，除了建筑和房地产等很少几个行业外，目前很多新增就业机会都是由本国出口企业和外资企业提供的。
汇丰控股(HSBC Holdings)驻香港经济学家瞿宏斌(音译)说，在一个拥有13亿人口、失业率已达两位数的国家，创造就业机会对中国领导人的重要性可想而知。他说，只有在其他国家保证帮助中国解决因人民币升值而产生的就业问题时，中国才会调整人民币汇率。
虽然人民币升值对在美国从事制造业的中国公司可能有利，但是也有不利的一面，即：人民币升值会导致中国出口产品价格上升，从而对众多在华美国公司造成打击，其中一些企业是中国最大的出口商。随著在华美国公司生产的产品价格上升，近些年来一直大量购买中国产品的美国消费者的利益将受到损害。
在华拥有30亿美元投资的摩托罗拉公司(Motorola Inc.)的例子可以说明上述连锁反应的后果。摩托罗拉去年在华销售额为57亿美元，其中26亿美元来自出口，而其中又有很大一部分来自美国市场。摩托罗拉公司发言人玛丽?兰博(Mary Lamb)不愿对人民币升值对公司的影响发表看法，但她承认，这会导致美国消费者购买的中国产品价格上扬。
政府部门的经济学家说，即便中国屈从于美国的压力，允许人民币微幅升值，中国肯定还会采取其他措施，来抵消升值造成的影响。一个最简单的办法就是提高出口退税。
尽管这一做法是否有违世界贸易组织(WTO)的规定还不能肯定，但官方已开始有所行动。本月初，中国官方媒体援引财政部长的话报导说，财政部正在研究有关措施，上调出口退税比例（目前为10%），同时还在加快发放拖欠的240亿美元的退税款。
国家信息中心的王远鸿说，人民币大幅升值不仅会损害中国，而且会损害世界经济，从长远来说，也将损害美国的利益。
