The US Treasury is responsible for the International Monetary Affairs Assistant Minister of Charles Collyns Monday (November 7) said the US would later in the week the Asia-Pacific Economic Cooperation organization , "APEC summit to continue to put pressure on China to push China to speed up RMB appreciation speed.

Collyns says, China must perform last week in G20 summit (G20) commitment, faster to based on the market interest rates formation mechanism. He said: "we want to see China to allow exchange rate marketization and avoid the exchange rate of the imbalance of long-term sincerity." He said that China and other countries have implemented a massive intervention, to suppress a stronger currency.

G20 leaders in last week's summit emphasized on currency reform, at the same time, China's promise at the conference to "greater exchange rate flexibility". However, about growth flexibility is equal to currency appreciation that, the current controversy still. The Chinese commerce minister Chen deming in summit to tell a reporter, the Hong Kong market of recent offshore RMB selling pressures show that market cognitive is changing, the market may not think that the yuan is undervalued.

RMB appreciation of the employment effects

According to a study from China, if the yuan has risen by 10% real exchange rate, will cause China manufacturing job cuts of 4.1% to 5.3%. The study of 456 Chinese manufacturing data was analyzed. The report estimates that if the yuan has risen by 10% real exchange rate, the industry will reduce the salary of about 4%. The real exchange rate appreciation is the economics, a term refers to the after inflation adjusted, and RMB against a basket of currencies of appreciation.

Economists say, yuan appreciation will bring China exports to the dollar and the euro price is more expensive, so sharp appreciation in the yuan, China export enterprise by slashing jobs and salaries to compete for business. In addition, the report also points out, is generally regarded as the protection of the state-owned enterprise by the government, it could be more than private enterprise mass of job cuts.

Economists say, state-owned enterprise than the private competitors profit margins to low, this means that if the yuan rose by 10%, the state-owned enterprise is more likely to be forced out of the export market. They say, although 10% of appreciation looks like is not very big, but will make net employment rate is quite a big blow.

Since 2010 June gaze at the end of China dollar exchange rate system. Since then, the yuan has risen about 10% against the dollar. But according to the Bank for International Settlements (Bank for International Settlements) estimates, from June 2010 through September, the reference to a basket of currencies rise only about 5%. In the same period, a weaker dollar.

Many economists say, however, China still needs to bite the bullet to let the yuan rise, so that Chinese economy can reduce the reliance on exports, and more on domestic demand. However, any long-term appreciation may to short-term job cuts for cost.



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