China's exchange rates are a domestic problem
Do not be fooled. Financial pressure for an appreciation of the renminbi may have eased, but the case for currency reform remains as strong as ever. Not because George W. Bush, US president, is about to visit China, although Beijing would be unwise to ignore the growing tide of protectionism in its largest export market. Rather, because China's fixed exchange rate is complicating domestic economic management.
Economics textbooks tell us that undervalued exchange rates eventually result in inflation, because inflows of foreign capital add to the domestic money supply. But in China, indications are that speculation against the renminbi has eased in recent months.
Admittedly, China's broad money supply growth has picked up sharply since early this year, but the acceleration is at least partly deliberate. Rather than strengthening, price pressures in China have eased, with inflation falling below 1 per cent in September. This has given the People's Bank of China room to boost liquidity to help reverse a slowdown in gross domestic product growth that it believed was too sharp.
Unfortunately for the PBoC, there are bears lurking in Goldilocks' land. The easy liquidity is as much a consequence of the fixed exchange rate as a deliberate policy by the authorities to boost domestic growth. The most obvious proof is the PBoC's March decision to cut interest rates on excess reserves, a move that pulled down China's interbank interest rates to record lows. Aimed at deterring currency speculators from holding renminbi, this change also clearly loosened domestic monetary conditions. The central bank's move, combined with rising US rates, did squeeze speculative capital inflows. But China's foreign exchange reserves have continued to surge, rising by almost $160bn (￡92bn, �136bn) in the first nine months of 2005 alone. Why? Because China has a new motor of reserve accumulation: an epic current account surplus. In the first half of 2005, the surplus rose to $67bn (equivalent to 8.2 per cent of gross domestic product), up from less than $8bn (1 per cent of GDP) the preceding year.
Arguably, some of the rise in the current account surplus will be temporary, being reversed by further tightening by the US Federal Reserve. But higher international interest rates will not be all negative for China's current account balance, increasing, for example, the return on that massive stock of reserves. And interest rates will have no impact on the main contributor to the current account imbalance, the surging trade surplus. Foreign exchange accumulation from merchandise trade alone is likely to be bigger in 2005-06 than the increase in reserves driven by all non-trade and foreign direct investment flows in 2003-04.
Of course, the central bank will try to ensure that much of this foreign exchange never makes its way into the domestic economy. But monetary policy-making anywhere is more tightrope walking than scientific process. This is particularly true in China, where policy instruments are blunted by an economic structure that is still somewhere between plan and market. The incessant rise in foreign exchange reserves makes China's monetary ???-policy balancing act even more difficult than usual, with the result that ? ? ? - domestic liquidity is likely to be overly generous.
You may ask why any of this matters when the consumer price index is about 1 per cent. Indeed, many experts believe the real risk in China is deflation rather than inflation, a context that makes a policy of low interest rates and high money supply look responsible rather than reckless.
The debate about the sustainability of China's growth, however, has always been as much about over-investment as inflation. And while there is much talk about corporate profit margins being squeezed and banks becoming more prudent, there has been no fundamental change to ensure that all the liquidity entering the market will not simply flow into investment once again. Consider that there are already signs of an upturn in investment on the back of the easier liquidity of the past few months. Exchange rate appreciation will not resolve these imbalances quickly or completely. But nor is it the ineffective tool often assumed. A more expensive currency would put a cap on the external imbalance, and begin to shift the motor of GDP growth from exports to domestic consumption. So while China's leaders may well want to be seen to ignore a hectoring Mr Bush, they should still be preparing to allow the currency to appreciate further.
Paul Cavey is China economist and Bill Belchere is chief Asia economist atMacquarie Securities 中国汇率其实是国内问题
别犯傻了。虽然人民币升值的金融压力可能已经减轻，但货币改革的理由仍与以往一样充足。原因不是美国总统乔治? W ?布什 (George W. Bush) 即将访问中国，北京忽视其最大出口市场中日益高涨的贸易保护主义浪潮是不明智的。相反，原因是中国的固定汇率正在使国内经济管理复杂化。
经济学教科书告诉我们，低估的汇率最终会导致通货膨胀，因为外国资本的流入，会增加国内的货币供应。但在中国，有迹象显示，对人民币的投机已在近几个月降温。
诚然，自今年初以来，中国的广义货币供应增长急剧上升，但这种加速至少在一定程度上是有意而为的。中国的价格压力不是增大了，而是减轻了， 9 月的通胀率跌至 1% 以下。这让中国人民银行 (PBoC) 有了增加流动的空间，可以有助于抑制国内生产总值 (GDP) 增长的减速，因为人民银行认为 GDP 减速过快。
不幸的是，对中国人民银行而言，美中也有不足。宽松的流动性，既是固定汇率制度的后果，同样也是当局有意促进国内经济增长政策的后果。最明显的证据是，由于储备金过多，人民银行于 3 月份作出了降低利率的决定，此举将中国的银行间利率降至历史新低。这一改变的目的，是为了阻止货币投机者持有人民币，同时也明显放松了国内的货币环境。央行此举，加上不断攀升的美国利率，确实减少了投机资本的流入。但中国的外汇储备一直在持续猛增，仅 2005 年前 9 个月，就增加了近 1600 亿美元。为什么？因为中国有了积累储备的新动力：大规模的经常账户盈余。 2005 年上半年，经常账户盈余从上一年的不到 80 亿美元 ( 相当于 GDP 的 1%) ，升至 670 亿美元 (GDP 的 8.2%) 。
按理说，经常账户盈余的部分增长是暂时的，美联储 (Fed) 进一步紧缩银根正在使这部分增量反转。但世界各国利率的升高，对中国经常账户盈余并非只有坏处，比如，它可以增加庞大外汇储备的回报。而且利率对激增的贸易顺差也没有影响，这是导致经常账户失衡的主要因素。光是 2005 至 2006 年间通过商品贸易积累的外汇，就很可能超过 2003 至 2004 年所有非贸易，以及外国直接投资带动的外汇储备增量。
当然，央行会努力确保其中大部分外汇绝不渗入国内经济。但任何地方在制定货币政策时，都更多地像在走钢丝，而非科学的决策过程。在中国尤其如此，中国的经济结构仍介于计划经济与市场经济之间，这削弱了其政策工具的效力。外汇储备的不断增长，使中国比往常更难平衡其货币政策，结果可能造成国内货币流动性过大。
你可能会问，消费价格指数仅有 1% 左右，这有什要紧呢？确实，许多专家认为，中国面临的真正风险是通缩而非通胀，在这种情况下，低利率和高货币供应政策似乎是负责的政策，并非轻率之举。
但关于中国经济可持续增长的争论，总是纠缠在过度投资和通胀这两个问题上。虽然有很多关于企业利润缩水、银行变得日益谨慎的言论，但却并未发生根本改变，来确保进入市场的流动性，不会再次流入投资领域。鉴于过去几个月流动性变宽松，投资已出现增长迹象，人民币汇率升值不会迅速、完全消除上述不平衡。但它也不是人们通常认为的无效工具。货币升值将为外部不平衡设置上限，并开始将 GDP 的增长动力从出口转向国内消费。因此，虽然中国领导人也许想让人知道，他们不怕恃强凌弱的布什先生，但他们还是应该做好准备，允许人民币进一步升值。
保罗?凯维是中国问题经济学家，比尔?贝尔彻是麦格理证券 (Macquarie Securities) 首席亚洲经济学家。
