China Enhances Steps To Deflect Yuan Risk
Even as a U.S. Treasury Department team was in China lobbying for a flexible yuan, the central bank was fortifying its defense of the exchange-rate mechanism, absorbing massive amounts of financial-system liquidity.
Six Treasury officials spent two days last week huddled in "technical" yuan talks with Chinese officials, against a backdrop of worry in the U.S. that China is suppressing its currency to keep exports cheap. Chinese monetary officials last month have also gathered with counterparts from Japan and South Korea, two other countries who argue they have been pinched by a low-riding yuan.
Yet, rather than revalue the currency, as the foreign experts desire and which might relieve pressure on the domestic monetary system, Chinese officials have stepped up efforts to deflect the risks faced by leaving the exchange rate unchanged. Specifically, China's central bank in recent weeks has quietly broadened the scope of a nearly one-year-old program designed to keep the rigid exchange-rate system from overheating the economy. Other cooling efforts have been aimed at cutting loan growth.
Suppressing the yuan has costs for China. Rigidity in the yuan against a flood of bets that it can only rise may already be triggering a problematic chain of events. Too much investment may breed extra-fast growth, which then takes a toll, for instance, in the form of poor lending decisions by cash-heavy banks. Hyperinflation also is possible. (See related article.)
"The central bank has been draining money from the market to absorb the extra money supply, caused by strong demand for the yuan. Speculation of a revaluation in the yuan has caused a big amount of hot money to flow into China, lifting China's money supply," said a debt trader at China Merchants Securities Co. in Shanghai.
Since the yuan's exchange rate is virtually fixed, China's money supply needs to expand at the same rapid pace as the net sum of inflows. Those include foreign investment, valued at more than $50 billion last year, plus repatriated trade receipts of around $5 billion and other inflows like so-called hot money, valued at possibly $40 billion last year, according to analysts.
To reduce chances that increasing amounts of money will lead to economic overheating, the central bank regularly absorbs yuan from the banking system. So long as the central bank is holding onto the money, the funds can't be lent or otherwise make their way into the economy.
Numbers on investment into China for this year aren't available. But the central bank has redoubled efforts to soak up record amounts of money supply. In fact, data from the central bank and market participants suggest that in January and February it absorbed yuan valued at a net $13.9 billion from the banking system, more than it did in all of 2003, when around a net $9.1 billion was absorbed.
The central bank also has started to hold funds as long as 12 months, twice as long as in the past. To ensure banks are willing to part with the cash and its mop-up effort succeeds, the central bank is paying higher interest rates on the bills it exchanges with banks. The totality of these actions means the central bank's commitment to keep the yuan in place is rising fast -- at least in terms of the program's cost.
Yu Jiang, an analyst at Shanghai Securities, says choking money supply is preferable to raising interest rates to cool the economy. "A higher interest rate could result in higher pressure on the yuan revaluation," by making deposits in China look even more appealing, he said.
Pressure is certainly mounting on Beijing to simply allow the yuan to rise after 10 years of locking it to the dollar at 8.3 yuan.
As demonstrated by its mission to Beijing, if not the secretive nature of the talks, the U.S. government has been particularly adamant that China needs to introduce flexibility to its exchange-rate system. U.S. manufacturers have crusaded with those in many other countries to loudly complain that China is artificially capping the yuan's exchange rate in order to keep its export prices low.
China's message is somewhat cryptic. For instance, it remains unclear exactly what central bank Gov. Zhou Xiaochuan meant when Xinhua news agency quoted him in early February as saying China will pursue a "stable and healthy" foreign-exchange policy.
Many investment banks are betting on a revaluation, and rumors of an imminent change are continuing. Goldman Sachs & Co. has among the most aggressive calls on the timing, that the yuan will rise 2.5% by the end of March to 8.07 yuan and thereafter be managed in a trade-weighted basket system. One reason: the difficult task of keeping money-supply growth under control.
Actions in the open-market operations suggest the central bank's priority is to prevent overheating. The highly technical sterilization program chokes the overheating impact at its source: money-supply growth in the banking system.
The central bank on Tuesdays sells three-, six- and now 12-month bills to commercial banks. Market participants expect the central bank to remain aggressive with these sales, if only to ensure that money removed from the banking system last year with bill sales doesn't get recycled back into the economy when the bills mature.
For each of the next several weeks, about 15 billion yuan ($1.8 billion) in bills will expire from past mop-up actions. Just to stay even and keep hold of the money locked up in central-bank coffers, the central bank must sell bills of at least that amount each week plus more to soak up any new fund inflows.
Crunch time will arrive in the final week of April, when expiring bills are set to equal about 35 billion yuan.
中国加大力度防范人民币汇率风险
就在美国财政部代表团上周游说中国放宽人民币汇率管制的同时，中国央行仍在一如既往地吸收金融系统的大量资金，以捍卫现行的人民币汇率机制。
在美国方面担心中国通过管制人民币汇率而使出口价格更为低廉的背景下，上周美国财政部的6位官员与中国官员就人民币问题展开了为期两天的技术性探讨。此外中国货币当局的官员上个月还与日本和韩国同行进行了类似的探讨，这两个国家也都表示因人民币汇率较低而身受其害。
然而，中国官员并未如外国专家所期待的那样重估人民币币值，而是不断采取措施来转移维持汇率不变所带来的风险。特别是对于一年多来为防止人民币汇率不变导致经济过热而实施的某些项目，中国央行近几周已悄然扩大了其实施范围。同时，央行还采取了一系列抑制贷款增长的冷却措施。 压制人民币汇率对于中国来说的确要耗费成本。在众多力量打赌人民币会升值的情况下，压制人民币汇率也许已经在逐渐引发一些连锁问题。过多的投资可能会进一步刺激已经过快的经济增长，例如资金充裕的银行会降低贷款标准，作出一些不明智的贷款决定。恶性通货膨胀也有可能出现。
招商证券(China Merchants Securities Co.)驻上海的一位债券交易员说，央行一直在从市场吸收资金，以消化因市场对人民币的旺盛需求而导致的过量资金供应，有关人民币将重新估值的传言已经导致大量游资流入中国，这在很大程度上扩大了中国的货币供给。 由于人民币汇率实际上是固定的，因此中国的货币供应量应与快速流入的外资保持同步增长。这些流入的资金包括外商投资、汇回国内的外贸收入以及游资等，据分析师称，去年外商投资额超过了500亿美元，汇回国内的外贸收入大约在50亿美元左右，游资流入量大约为400亿美元。
为防止货币供应量不断增长导致经济过热，中国央行会定期从银行系统抽取资金。只要央行控制住货币供给，资金就不会流入经济领域。 中国今年的外商投资数字尚不得而知。但是随著货币供应量达到创纪录水平，央行今年已经加大了资金吸收力度。
事实上，来自央行和市场参与人士的数据显示，1月和2月份，央行已经从银行系统净抽取了相当于139亿美元的人民币资金，超过2003年91亿美元左右的全年水平。
央行持有资金的期限也从过去的6个月延长至12个月。为使银行乐于放弃现金、保证央行吸收资金的计划顺利实施，央行提供的央行票据利率正在节节攀升。这些举措均意味著央行保持人民币汇率不变的代价也越来越高，至少从该项目的财务成本上来看是这样。
上海证券公司(Shanghai Securities)的分析师于疆(Yu Jiang, 音译)说，与加息相比，抑制货币供给仍然是央行给经济降温时的首选。加息只会使人民币存款更具吸引力，从而给人民币重估带来更大压力。
10年来中国一直保持人民币与美元的钉住汇率机制，将人民币维持在8.3元兑1美元的水平，而眼下中国政府面临的人民币升值压力无疑是越来越大。
美国政府在要求中国引入更灵活外汇机制的问题上态度始终非常强硬，这从其派代表团来北京商谈此事上就可以看出，虽然谈判的具体内容尚未对外公布。美国制造商已经伙同其他很多国家的同行共同对中国人为控制汇率表示了严重不满，他们称中国为保持出口价格上的竞争优势人为压低了人民币汇率。
中国的态度从某种程度上讲有些隐晦。例如，央行行长周小川2月初在接受新华社(Xinhua News Agency)采访时的讲话就让人很难揣测。周小川表示，中国将继续保持"稳定和健康"的外汇政策。
很多投资银行都打赌中国会重估人民币币值，甚至有传言称重估币值已经为期不远。高盛(Goldman Sachs & Co.)则是最激进的公司之一，它预计人民币将在3月底升值2.5%、达到8.07元兑1美元，并且随后会改为与贸易加权基础上的一篮子货币相挂钩，其理由是，控制货币供应量增长对中国而言是一项艰巨的任务。
公开市场操作动向表明央行目前的首要目的是防止经济过热。这种具有较高技术性的市场操作可以从根源上抑制经济过热：限制银行体系的货币供给增长。
中国央行每周二早间向商业银行出售3个月、6个月及目前的12个月期票据。市场人士预计，单单为了确保去年购买这类票据的资金在票据到期时不再重返银行体系，央行就仍需保持较大的发售力度。
未来几周中每周都将有大约人民币150亿元（合18亿美元）的票据到期。仅仅为了让这部分资金继续锁在央行的保险箱内，央行就要出售至少同等数额的票据，此外还要吸收新的资金流入。
紧要关头将出现在4月份最后一周，届时将有人民币350亿元（合42亿美元）的票据到期。
