Research on the Countermeasures of virtual currency

3. We should strengthen the flexibility of the exchange rate and further improve the market mechanism for the formation of the exchange rate. We should expand the floating range of the exchange rate, use the market mechanism to adjust the supply and demand of the foreign exchange market, get rid of passively issuing a large number of additional base currencies in order to maintain the stability of the exchange rate, and avoid the monetization of the pressure of RMB appreciation. We should speed up the transformation from the compulsory foreign exchange settlement and sale system to the voluntary foreign exchange settlement and sale system, relax the restrictions on the foreign exchange trading needs of enterprises and indivials, support domestic enterprises to go out, and graally ease the pressure of RMB appreciation. In the basket of currencies referenced by RMB exchange rate, we should appropriately rece the composition of US dollar, increase the proportion of euro, pound sterling, yen and other currencies, and link the future market-based equilibrium exchange rate with the world's diversified economies.

4. Before the design of this coin recognizer, we used a lot of information about this aspect for reference, and decided to design a composite coin recognizer after research. This kind of recognizer has the advantages of simple structure, low cost, high recognition accuracy and can be widely used in various fields. Therefore, this kind of recognizer will occupy a large market, and there will be a lot of room for development
the principle of compound coin recognizer: the compound coin recognizer is mainly composed of plate capacitance sensor, inctance coil sensor, detection circuit and single chip microcomputer control circuit. The variable gap flat-panel capacitance sensor can identify the authenticity by checking the thickness of coins. When coins enter the flat-panel capacitance sensor through the slot, the capacitance of the sensor will change. The sensor can also detect the material of coins, but this is only an additional function. The change of capacitance is converted into voltage signal by AC bridge equipped with capacitance sensor, and then the signal is amplified into rectification circuit by amplifying circuit to change AC into DC. Then, the interference signal is filtered through the active low-pass circuit, and then input into the AD converter after passing through the voltage comparator to convert the analog signal into digital signal and send it to the single-chip microcomputer control circuit. You can identify counterfeit coins.

5. Exchange rate is a tool; Double edged sword;, From the current situation of China's national economic development, there is a lot of room for RMB appreciation; But at the same time, it will have a serious negative impact on the growth of China's foreign trade export, not concive to easing the pressure of domestic employment, resulting in the loss of the rights and interests of foreign exchange net assets. The negative impact of appreciation is obviously stronger than its positive effect, We should take measures to alleviate it.
key words: positive effects and negative effects of exchange rate appreciation.
in today's world economic integration, exchange rate plays an important role in the allocation of resources in the world. China's economy is an important member of the world economic stage, and changes in the exchange rate of the people's currency will affect the nerves of Asian countries and even the whole world, All kinds of signs show that there is a lot of room for RMB appreciation.
first, the background analysis of RMB exchange rate appreciation.
first, from the current situation of China's national economic development, a strong economy is bound to create a strong currency, Especially in the current situation of global economic slowdown, China is still outstanding, maintaining a high growth rate of 8%, which is the economic basis for the sustained strength of RMB; Double surplus;, Foreign exchange revenue is greater than expenditure, foreign exchange market supply is greater than demand, foreign exchange reserves reach 340 billion U.S. dollars, showing a steady growth trend. In the current balance of payments situation, there is no reason for RMB devaluation; 9·11" The event further worsened the already depressed world economy, challenged the idea of the United States as the safest investment place in the world, while China maintained its attraction to international capital with its good economic development situation, stable political environment and huge market potential, Fourth, from the perspective of domestic price level, since the macroeconomic deflation situation, prices have continued to fall. With the sharp decline of tariffs after China's accession to the WTO, China's foreign exchange rate will continue to rise, Low prices and low inflation rate are important factors in the medium and long term to support the stability and strength of RMB exchange rate, The positive effects of RMB exchange rate appreciation are as follows:
(1) it is concive to enhancing the confidence of all sectors of society in China's economy and currency. The pursuit of profit and risk aversion are the fundamental reasons for international capital flows. Whether foreign investors invest in China is not only a matter of profit margin, Risk aversion is another important factor. Since the collapse of the Bretton Woods system, the current international credit and monetary system has great instability. Both countries and indivials have the objective need to avoid risks. Rational expectation has also become an important factor affecting international capital flow. At present, RMB can not compete with the US dollar and Japanese yen on the international stage, so it is necessary to avoid risks, According to the asset portfolio theory and rational expectation theory, the signal that RMB appreciation will send to the whole world is that the country's comprehensive strength will be enhanced and the economic situation will be favorable. This will help to enhance investor confidence, improve people's expectation of government behavior and economic operation, and make it easier to refinance, By 2002, China's foreign debt balance was as high as 170.4 billion US dollars. Every 1% depreciation of RMB will increase the foreign debt by 1.7 billion US dollars. On the contrary, every 1% increase of RMB will bring China billions of US dollars in foreign exchange surplus. In addition, China's medium and long-term debt is as high as more than 80%, and now it has entered the peak of debt repayment, The moderate appreciation of RMB is of great positive significance in alleviating the current debt repayment pressure.
(3) it is concive to establishing the image of China as a responsible big country. From the situation of neighboring countries, the economy of Japan and South Korea continues to be in the doldrums. The economic development speed of the formerly vigorous four little dragons in Asia is slow, and they have not yet completely come out of the shadow of the financial crisis, It will easily lead to a new round of competitive devaluation of Asian currencies and international & quot; Currency war& quot; Exchange rate war Moreover, this practice of "beggar thy neighbor" can easily lead to retaliation from trade opponents, resulting in the failure of the anti-mping policy, At present, China's RMB exchange rate management system is managed under the current account, but the capital account has not yet been opened. This is mainly to avoid exchange rate risk in the international market, At present, RMB has become a hard currency in the surrounding areas. After the deregulation of capital projects and becoming a freely convertible currency, RMB is expected to become a strong regional currency.
Third, the negative effect of RMB exchange rate appreciation
exchange rate is a & quot; Double edged sword;, The impact of its changes is often two-sided. The appreciation of RMB exchange rate will also bring negative effects:
(1) it will have a serious negative impact on the growth of China's foreign trade exports. The appreciation of RMB will increase the foreign currency prices of China's exports, directly weaken the price competitive advantage of China's exports, and affect China's transfer effect and relative comparative advantage ring the depreciation of the US dollar, From the perspective of international division of labor, China, as a developing country, is dominated by manufacturing instry. This trade structure is vulnerable to changes in the exchange rate level. From the perspective of division of proction factors, compared with the developed countries' participation in international division of labor with capital and technology advantages, China's trade structure is highly vulnerable to changes in the exchange rate level, As a developing country, China has the advantage of labor cost. As a dominant enterprise in China, the procts of labor-intensive enterprises are of low grade and low added value. If RMB appreciation, the proction cost and labor cost of exporters will increase correspondingly, The decline of export profits will seriously affect the enthusiasm of exporters. The appreciation of RMB will cause serious damage to China's advantageous instries.
(2) it is not concive to attracting foreign investment and upgrading the processing trade instry, Because this kind of investment has become relatively expensive. At present, the operation of foreign enterprises in China has graally entered a mature development period, and the demand for foreign capital profits to be remitted is also increasing year by year. The appreciation of RMB will increase the foreign exchange earnings of profits, and may increase the scale of capital outflow, which will exert pressure on the balance of international payments, (3) the appreciation of RMB will increase the risk of domestic enterprises. China has always adopted the exchange rate system of RMB pegged to the US dollar. If RMB appreciation, it will increase the cost of foreign exchange risk management of enterprises, From the financial point of view, it mainly refers to the adjustment of the assets and liabilities to change the strength and currency of the net risk position, so as to realize the management of foreign exchange risk, In the first half of this year, China's foreign exchange reserves increased to 346.5 billion US dollars. If the RMB appreciation, it will increase the real depreciation of the US dollar, which will lead to the serious loss of China's foreign exchange net assets; Shrinkage & quot In addition, the appreciation of RMB will also slow down the growth of China's foreign exchange reserves, which may be detrimental to the normal progress of China's financial reform. In addition, the appreciation of RMB will further increase the actual amount of non-performing assets (measured in US dollars) of banks, which is detrimental to the reform and structural adjustment of the whole banking instry, The appreciation of RMB will affect the process of economic growth at a certain stage, and will graally offset the import growth caused by the appreciation of currency. Once China's economic growth is frustrated by the appreciation of RMB, and the economic growth is much lower than the economic growth potential, China's economy will eventually face the pressure of deflation, Many new employment opportunities are also provided by domestic export enterprises and foreign-funded enterprises. The impact of RMB appreciation on export instries and foreign direct investment will eventually be reflected in employment, which will inevitably have a certain impact on the improvement of the current employment environment, Due to the rapid increase of national wealth expressed in US dollars, the stock market and real estate reached a climax; The bubble economy " With the development of the economy, the polarization will continue to expand, which may cause a blow to the economic development. The economy will further slow down, and the government will face all kinds of difficulties. Finally, because of these considerations, the currency will depreciate again. If the currency appreciates and depreciates again, people will lose confidence in the government's ability to manage the economy.
it can be seen that the negative impact of the current appreciation of RMB presents two major characteristics: one is a wide range, and the other is a wide range, Appreciation will affect the stable development of international trade, attracting foreign investment, employment, price and financial reform; Second, the intensity is relatively strong, the negative impact of appreciation is directly related to the national economy and the people's livelihood, and the intensity is obviously stronger than its positive effect. Therefore, in the face of the pressure of RMB appreciation, we should be more cautious, study comprehensively, and actively respond to it.
Fourth, we should take measures to ease the pressure of appreciation, At the same time, measures should be taken to ease the pressure of appreciation.
(1) improve the basis of RMB exchange rate decision. The basis of RMB exchange rate decision should be graally transferred to the current special case, taking into account other factors, especially the situation of capital flow. Improve the formation mechanism of RMB exchange rate, In the inter enterprise foreign exchange market, major foreign trade enterprises should be allowed to enter the foreign exchange market, the main body of foreign exchange trading should be expanded, and the scale of foreign exchange trading should be increased, so that the whole supply and demand of foreign exchange can be effectively cleared, and the price can also flexibly guide and regulate the supply and demand

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the meaning of active fiscal policy
the active fiscal policy proposed and implemented by our government has its specific economic and social background and policy meaning
first, the positive fiscal policy is in terms of the comparative significance of the size of the policy role. Since the reform and opening up, e to a variety of reasons, the proportion of China's fiscal revenue in GDP and the proportion of central fiscal revenue in the total fiscal revenue have been declining, resulting in the weakening of the national fiscal macro-control ability and the dilemma of "food finance". In the face of the new situation and problems of insufficient demand, weak investment and economic growth after China's successful "soft landing", especially in the face of the impact and impact of the Asian financial crisis, China's fiscal policy must get out of the dilemma of weakening regulatory function as soon as possible, and play a more direct and positive role in promoting and stimulating economic growth. This is the main meaning of "more active" or active fiscal policy
secondly, active fiscal policy is in terms of the urgent needs of China's structural adjustment and social stability. With the deepening of reform and opening up and the continuous improvement of marketization, structural contradictions in China's social and economic life have become increasingly prominent, which has become a serious obstacle to expanding domestic demand, opening up the market and promoting sustained, rapid and healthy economic development under the new situation. As the most important means of structural adjustment, fiscal policy should obviously play a more active role in China's structural optimization and adjustment. In addition, e to the widening gap of social income distribution, the increasing number of laid-off and unemployed people in the reform of state-owned enterprises, and the emerging problem of urban poverty, fiscal policy, as the only means of social redistribution, must also play a key regulatory role in promoting social equity and ensuring social stability. This can not be replaced by market mechanism and other policy means. The change of the situation and the urgent objective needs make China's fiscal policy have to go to the front stage and give full play to its e positive role< Thirdly, active fiscal policy is not a type of policy, but a choice of policy measures. The economic theories at home and abroad show that the fiscal policy under the condition of modern market economy can be divided into three types: expansionary fiscal policy, tightening fiscal policy and neutral fiscal policy. For example, the "Roosevelt's New Deal" of the United States in the 1930s and its expansionary fiscal policy, which has been carried out for at least 10 years, are the examples; Japan's expansionary fiscal policy since the 1960s has its own characteristics and orientation. However, the active fiscal policy implemented in China is only a response to the changing new situation, new problems and unexpected external factors under the general direction of moderately tight fiscal policy, not a policy type< The nature and characteristics of active fiscal policy. Active fiscal policy is a kind of periodic or temporary moderate expansion policy, which is adopted within the limits of policy environment under the special circumstances of insufficient demand, weak investment, export and economic growth, and the aggravation of the impact of the Asian financial crisis. It can also be said that this is a conditional policy choice under the condition that the domestic economy has urgent needs and the policy implementation is realistic. The so-called objective need here is the need to expand domestic demand in order to maintain moderate economic growth. It is a policy choice that must be made under the condition that the implementation and operation of monetary policy are partially blocked and its ability and effect of stimulating demand are limited. And the so-called policy environment allows, that is to say, although the national fiscal revenue and expenditure situation is relatively severe, but in the case of banks having more "deposit gap", rich funds, and enterprises being cautious in lending e to the strengthening of constraint mechanism, finance can achieve the purpose of expanding demand and stimulating economy by implementing the active fiscal policy focusing on the moderately expanded national debt policy. Once this policy environment changes, the choice of fiscal policy needs to be considered separately< (2) policy orientation. In view of China's actual situation, under the circumstances that the transformation of government functions has not yet been fully completed, the transformation of enterprise mechanism has not yet been completed, and the institutional and structural contradictions are still very prominent, it is not appropriate and impossible to implement the fiscal policy of comprehensive expansion, but can only implement it, which is concive to increasing investment, opening up the market, expanding domestic demand, and adjusting and optimizing the structure, The financial policy to promote the deepening of the system reform is to implement the directional financial policy. In view of this, China's active fiscal policy has chosen to adjust the structure, improve the investment environment, enhance the economic growth momentum and instrial driving effect as the purpose, and focus on the construction of social infrastructure< (3) the complexity of policy. Expanding domestic demand is multi-faceted and multi-level. Therefore, the application of active fiscal policy, as far as it is concerned, is not limited to expanding financial investment in infrastructure. Instead, it takes expanding demand as the main purpose and pays attention to the comprehensive use of multiple policy means, which reflects the policy complexity. In short, in addition to issuing 100 billion yuan of treasury bonds to state-owned commercial banks for infrastructure construction, 270 billion yuan of special treasury bonds were also issued to improve the capital adequacy ratio of state-owned commercial banks; By adjusting the expenditure structure of the central government, 18 billion yuan will be set aside for the basic living security of laid-off workers in state-owned enterprises, the timely and full payment of pensions for retirees and flood relief, that is, through the transfer expenditure of finance, consumption and investment will be stimulated; We have increased the export tax rebate rate of some procts in batches, adjusted the tax policy for imported equipment, reced the tariff rate, and exempted the foreign investment projects and domestic investment projects encouraged by the state from tariff and import increment tax within the specified scope, so as to promote and enhance the demand for foreign trade and economic cooperation< [edit this paragraph] the policy orientation of active fiscal policy
the reasonable determination and timely adjustment of fiscal policy principles or policy orientation have a decisive impact on the realization of policy objectives and the quality of policy effects. In this regard, China's active fiscal policy and appropriate monetary policy should pay attention to and strive to achieve the following "balance" or "combination":
first, in the choice of policy priorities, we should combine increasing investment scale with stimulating and expanding final consumption demand. Under the condition of traditional planned economy -- seller's market -- shortage economy, we have always been used to putting the emphasis of stimulating economy on investment and proction, that is, on increasing proct supply, because the constraint of supply is always the main aspect of contradiction. However, under the condition of market economy buyer's market, the focus of stimulation is consumer demand, and effective demand is the main aspect restricting the development of national economy. It is true that stimulating investment and proction is also increasing demand, but it is only intermediate demand. How much effect it can play on economic growth and whether it can improve economic efficiency depend on the final demand. Under the new situation, the orientation of fiscal and monetary policy that is concive to expanding domestic demand must organically combine increasing investment and proction with stimulating final consumption
Second, in terms of the strength of policy, we should combine the appropriate expansion of the total amount with the adjustment and optimization of the structure. Because the nature of the current problem is neither a simple economic crisis of overproction and economic depression, nor a simple shortage of aggregate demand, but in the transition period of economic system and economic development (growth) mode, when the economy has successfully achieved a soft landing and there is a situation of high growth and low inflation, it is mainly e to the "analgesia" of the transition The transitional difficulties are caused by institutional and structural obstacles. It is precisely because of this characteristic and nature, that is, under the circumstances that the system transition has not been completed, the structural contradiction is very prominent, and the macro-control system adapting to the market economy is not perfect, if we unilaterally emphasize and implement the overall loose aggregate expansion policy, it is likely to ince a new round of inflation and aggravate the difficulties of structural adjustment, which will not help the current economic coordination Effective growth, but also for the follow-up sustained and healthy economic development, instrial structure optimization, as well as on this basis to solve the employment problem, cause more trouble and delay obstacles
thirdly, we should combine supporting state-owned economy with encouraging the development of non-state-owned economy. The reason is that the development of non-state-owned economy has great influence and significance on expanding domestic demand and realizing the goal of economic growth, no matter from its development needs, development possibilities and great potential, or from its great role in promoting economic growth, increasing national taxes and solving employment problems. However, from the actual situation, there are many practical obstacles and difficulties in the development of non-state-owned economy. There are some policy problems to be solved urgently in finance, taxation, credit and other aspects
fourthly, considering the policy effect, we should combine the current policy effect of expanding domestic demand with the long-term policy effect. Since insufficient demand will be an important factor restricting China's follow-up economic development, the solution of the problem can not only focus on the immediate and ignore the long-term. In the analysis and estimation of policy orientation and policy effect, we must consider the short-term and long-term, current and future as a whole< Since an active fiscal policy is not a long-term policy choice, there must be a problem of policy adjustment or policy transformation, which we must prepare in advance. The key to the problem lies in whether factors and conditions can be found to replace the "pull" or "push" of the current fiscal policy. That is to say, we should graally change the situation of promoting economic growth by focusing on the implementation of positive fiscal policy, and replace it with other forces, so as to create conditions for the "fade out" and transformation of positive fiscal policy. In my opinion, in the medium and long term, such factors or pulling forces are as follows:
1. Market and consumption substitution. That is to say, the focus of the current fiscal and monetary policies should be on further developing the market and stimulating the final consumption demand, and graally recing the dependence of economic growth on expanding the scale of government investment. There are many alternative measures in this regard, such as orderly promotion of bank consumer credit; We should appropriately increase the proportion of fiscal expenditure to stimulate consumer demand, especially the amount of fiscal transfer expenditure to low-income people; We should rece the burden of farmers, increase the income of rural areas and farmers, and lay a foundation for opening up a huge rural market
2. Private and enterprise investment substitution. Social funds flow and transform each other forever. In order to achieve the target of economic growth, in addition to the provision of some social public goods and services, which mainly depends on the national financial investment, the increase of private and enterprise investment can provide timely support for the government's investment for the purpose of stimulating economic growth

7. At present, the appreciation of RMB is generally related to the US dollar, that is, the appreciation or depreciation of RMB relative to the US dollar has a direct impact on import and export. Economically speaking, there may be the following reasons:
first, the exchange rate of RMB has not been adjusted for nearly 10 years since 1994, and China's economy and national strength have undergone profound changes in these 10 years
Second, since the 1990s, some authoritative international institutions and trading partners have always believed that RMB is undervalued to varying degrees
thirdly, according to the theory of international economics, excessive foreign exchange surplus itself indicates that foreign currency pricing is too high, local currency pricing is too low, and local currency has appreciation pressure
fourthly, since 2001, the currencies of the world's major currencies, including those of Southeast Asian countries, have all appreciated significantly against the US dollar. Only the exchange rate of RMB against the US dollar has not been adjusted, that is, RMB has actually depreciated significantly with the US dollar against other currencies. Not to mention whether the RMB was over depreciated or underpriced in the 1990s, in recent years, the currencies of other countries have greatly appreciated against the US dollar. Only if the exchange rate of RMB against the US dollar remains unchanged can we judge that the value of RMB against the US dollar may be undervalued< (3) International Political Analysis
the issue of RMB exchange rate is not only an economic issue, but also an international political issue. Some scholars especially pointed out that there are other reasons behind the frequent calls for RMB appreciation in some western countries. Some are out of jealousy, some are to shift the blame from the domestic authorities, and some are to win the votes of the domestic manufacturing instry. For example, western countries simply associate the value of RMB with the decline of their manufacturing instry, trying to force RMB appreciation. It is not China, but the invisible hand of global competition that causes the decrease of employment opportunities in the United States. There are no more than the following reasons for the foreign clamour for RMB appreciation: first, the RMB exchange rate is too low. Some people suggest that the exchange rate of RMB should be set at about 4.2 yuan per US dollar. Second, China's foreign exchange reserves are too high. Since China's accession to the WTO, there has been no surge in imports. On the contrary, the trade surplus has increased significantly. Third, China's massive export of cheap goods has caused world deflation. Some people think that in recent years, China's massive export of cheap procts has led to deflation in Japan, Europe and the United States. China should make the RMB appreciate and take corresponding responsibility in the world economy

the reason why the U.S. puts pressure on RMB appreciation is that China's "pegging to the U.S. dollar exchange rate" policy fails to give full play to the positive effect of the depreciation of the U.S. dollar, but only "greatly enhances the export competitiveness of Chinese enterprises and stimulates the export of Chinese procts", especially when the U.S. dollar depreciated in 2002, However, the US foreign trade deficit reached a historical peak of 435.2 billion US dollars, and the trade deficit with China reached 103.1 billion US dollars. In fact, the reason for the sharp increase of US foreign trade deficit does not lie in China's RMB exchange rate policy itself, but in the comprehensive effect of many factors, such as the adjustment of US instrial structure, the expansion of foreign direct investment, the growth of personal consumption expenditure, and the J-curve effect of us dollar depreciation

as an extension of military hegemony and economic hegemony, the United States, relying on its dominant position in the international monetary system, arbitrarily and compulsorily carries out its policies according to its own will, continuously gains hegemonic profits and maintains its status as a "financial hegemonic country". By devaluing the US dollar, the United States can not only rece its foreign debt burden, but also stimulate the export of its procts and pass on various economic crises, becoming the main form of its exploitation of other countries. The fundamental purpose of the RMB exchange rate dispute is that the United States hopes to block the large-scale entry of Chinese goods into the United States through the appreciation of RMB. Pressure on RMB appreciation, together with the U.S. anti-mping policy against China, constitutes the new content of the Bush administration's adjustment of economic and trade policy toward China

in recent years, the discussion on "sub yuan" has become more and more hot, and who can become the leading sub yuan in the future has become an increasingly sensitive topic. Japan's economy has been sluggish for a decade, so the possibility of the yen playing a leading role in Asia is diminishing. Due to the rapid economic growth, China has graally become the "locomotive" of Asian economic development and the "engine" of world economic development. Therefore, the value of RMB has become increasingly obvious, and a "RMB zone" has begun to form in China's neighboring countries, which leads to Japan's worry. Under the background of Japan's US $5 billion surplus with China in 2002, Japanese finance minister masaro Yanchuan proposed a motion to ask the group of seven countries to pass "a document similar to the" Plaza Agreement "against the Japanese yen in 1985" to force the appreciation of the RMB and push the global voice of suppressing the appreciation of the RMB to the peak. The purpose is to defeat the challenge of the RMB against the Japanese yen through the appreciation of the RMB, Ensure the future dominance of the yen

in recent years, China's foreign economic frictions have become increasingly fierce, but more of them are only limited to micro economic frictions. After China's entry into WTO, China is in the stage of system adjustment. More and more attention has been paid to the institutional factors in China's economic development. The United States, Japan, Europe and other countries put pressure on RMB appreciation, which makes the share of institutional economic friction in China's foreign economic friction begin to increase< (4) the objective function of RMB appreciation

1. Strengthen the ability of economic self circulation

when the change of exchange rate reflects the supply and demand of foreign currency, enterprises and families can adjust their strategies in time to make more effective use of foreign currency. Moreover, if domestic enterprises take advantage of the cost advantage brought by favorable exchange rate for a long time, the easier it is to earn profits by exporting low-end procts, the less motivation domestic enterprises have to invest in proct R & D. This is not concive to the long-term development of the country's competitiveness< In order to maintain the fixed exchange rate of RMB against the US dollar, the people's Bank of China must buy US dollars from the market and put in RMB. This makes it difficult for the central bank to keep the money supply within the target range. In order to offset the impact of foreign exchange, the people's Bank of China must carry out the so-called "local and foreign currency hedging operation", that is, to buy US dollars and sell government bonds or central bank bills through open market operation, so as to recover funds from the market. Appropriately expanding the fluctuation range of RMB can increase the freedom of monetary policy

3. It is consistent with easing the current concern of "overheating economy"

under the fixed exchange rate, the pressure of appreciation will be transformed into inflationary pressure, which is caused by the increase of money supply caused by foreign exchange. However, the practice of issuing central bank bills to collect foreign exchange is not rable, and will lead to the rise of the government's financial burden. Expanding the floating range of RMB will ease the pressure from appreciation to inflation: RMB appreciation will exert downward pressure on domestic prices, because: 1) the decrease of foreign exchange accounts leads to the decrease of money supply; 2) Currency appreciation will lower import prices, which may depress domestic prices

what is the real purpose of RMB appreciation? The decision made by the central government will not be made for a certain reason, unless the pressure of this reason is so great that the government can not avoid or block it. In my opinion, there are three reasons:
first, to resolve the expectations and pressures of various countries and funds on RMB appreciation
Second, graally get rid of the mode of pegging to the US dollar and prepare for RMB to become a hard currency
thirdly, we should take this opportunity to narrow the exchange rate gap between the Hong Kong dollar and the RMB and strive to reach 1:1. Then, at an appropriate time, the RMB, the Hong Kong dollar and the Australian dollar will merge to form a single currency

RMB is pegged to the US dollar. RMB has been in the trend of appreciation in the past 10 years. The appreciation of RMB is reflected in the form of the decline of RMB exchange rate, that is, the amount of RMB converted from 1 US dollar has decreased. The average exchange rate of RMB was 8.6212 in 1994, 8.3490 in 1995, 8.3143 in 1996 and 8.2770 in 2003 (National Bureau of statistics, 2004). The exchange rate of RMB has dropped by 4.1% in recent 10 years. Since 2001, the RMB exchange rate has been relatively stable at 8.2770 for three consecutive years. From January to May 2004, the RMB exchange rate is still 8.2770 on average. Since 2003, the RMB is once again facing the pressure of appreciation. The international calls for RMB appreciation have been increasing. The United States, the European Union and Japan have been pressing for RMB appreciation. Some theorists at home and abroad have estimated the "range of RMB appreciation" based on various models. The high estimate is more than 50%, and the low estimate is more than 15%

the reason for RMB appreciation comes from the internal power of China's economic system and external pressure. Internal factors include balance of payments, foreign exchange reserves, price level and inflation, economic growth and interest rate. Since 1994, China's current account balance of payments has been in surplus. China's foreign exchange reserves reached 286.4 billion US dollars in 2002, an increase of 5.55 times over 1994. From the perspective of PPP, China's price level is only 21% of that of the United States (World Bank, 2002). From the difference of inflation rate, the average inflation rate of the United States since 1998 is 2.23%, and the average inflation rate (CPI) of China in the same period is - 0.3%, which is 2.53% lower than that of the United States. From 1978 to 2003, China's GDP grew by 9.3% annually. In the past 25 years, China's economic growth is undoubtedly the fastest in the world. From the difference of interest rates between China and the United States, the interbank offered rate in China was 2.7% at the end of 2002, and the federal funds rate in the United States was 1.25%. China's short-term interest rate is 1.5 percentage points higher than that of the United States. In China, the RMB deposit rate is also 1.4 percentage points higher than the US dollar deposit rate. In addition, since the first half of 2002, the U.S. dollar has weakened, and the RMB has depreciated along with the U.S. dollar, which deviates from the trend of RMB appreciation. With the rapid growth of China's relative labor proctivity (from 1993 to 1999, the growth rate of labor proctivity of China's manufacturing instry was at least 1.5 percentage points higher than that of the United States manufacturing instry in the same period), on the contrary, with the devaluation of the US dollar, the trade deficit of the countries with trade deficit became larger and larger, which constituted the external pressure of RMB appreciation<

countermeasures:

first, ease the pressure of RMB exchange rate appreciation

the pressure of exchange rate appreciation comes from many aspects, and the rapid growth of exports, capital inflows and foreign exchange reserves are all important factors. However, at present, China's economic growth is highly dependent on foreign trade, so it is not easy to rece the pressure of RMB appreciation from foreign trade. However, among China's foreign trade partners, China has the largest surplus with the United States and the greatest pressure from the United States. Therefore, we can rece our dependence on the U.S. market by adjusting the geographical structure of foreign trade. In view of the pressure brought by capital inflow, while continuing to encourage the inflow of foreign capital, our enterprises can moderately consider entering other countries' markets by means of foreign direct investment. In view of the pressure brought about by the rapid growth of foreign exchange reserves, we can take measures to appropriately control the growth rate. In addition, QDII system can also be considered. Through these measures, the pressure of RMB appreciation can be alleviated to a certain extent, which is graal

8. Currently, China has possessed the initial conditions of capital account opening----rapid economic growth, a higher savings rate, a frequent account surplus, plenteous foreign exchanges reserves, stable financial circumstances, lower banks’ nonperforming loans, more foreign direct investments, developing domestic capital markets as well as the least external debts. It should be recognized that the liberalization of capital account can lead to some risks, such as the Asian financial crisis of 1990s, while it can bring many benefits. Therefore, in the process of advancing capital account convertibility, China should pay close attention to national and worldwide economic developments to ensure that measures taken to put forward capital account convertibility be appropriate to our stage of economic development, the market growth degree, enterprise bearing capabilities, financial supervision level and international financial environment. Meanwhile, China should constantly better and reinforce macro-prudential regulation, further improve the statistical monitoring and warning system of cross-order capital flows in order to effectively prevent the negative impact of capital flow and maintain national economic and financial security.