Financial Risks Behind The Growth Of Textile And Clothing Trade

< p > China's April a href= "//www.sjfzxm.com/news/index_c.asp" > Import and export < /a > data are again significantly higher than market expectations, of which exports grew by 14.7% over the same period, and imports increased by 16.8% year-on-year.

This data is once again questioned by the market, as in the previous March export data, the market generally believed that this was the result of some companies taking tax rebates and foreign capital to avoid capital control, and a series of recent government policies are responding to these trade speculation as a result of the inflow of trade channels.

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< p > before the trade figures were released in April, the safe not only tightened the lower limit of foreign exchange positions of financial institutions, but also strengthened the examination of abnormal capital inflows.

One of the notices said that the import and export enterprises would seriously warn against the serious mismatch between capital flow and goods logistics.

These actions to combat foreign arbitrage are designed to ease the pressure of capital inflow caused by the appreciation of the renminbi.

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< p > the main factor to attract capital inflow is the continued appreciation of RMB.

Taking into account the implementation of the loose monetary policy of the United States and Japan and the reduction of interest rates by eurozone and Australia, international capital flows into China can carry out double risk free arbitrage of interest rates and exchange rates.

Since the middle of February this year, the RMB has appreciated 1.44% against the US dollar. Meanwhile, in the first 3 months of this year, the foreign exchange account has increased by 1 trillion and 200 billion yuan, which is 2.5 times the increment of last year. However, the accumulative trade surplus and foreign direct investment are only 460 billion yuan, accounting for only about 38% of the newly increased foreign exchange.

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< p > it is necessary to reflect on the policy of maintaining the appreciation of the RMB exchange rate. First of all, the result of this policy is that the export enterprises have been attacked by the exchange rate appreciation and wage promotion. Especially, the depreciation of the Japanese yen has a great impact on China's exports. Secondly, it is attracting a href= "http: //www.sjfzxm.com/news/index_s.asp" > international capital < /a > inflow, strengthening China's liquidity, promoting inflation and asset bubbles.

These two trends pose a threat to China's economic stability.

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In this case, why do we maintain the strength of the renminbi and raise the RMB exchange rate through the middle price? One argument is to promote the internationalization of RMB, but it is logical to pursue the long-term goal with the risk of national economy becoming more risky. P

Therefore, one view is that the main purpose of maintaining the strength of the renminbi is to maintain the stability of RMB assets.

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In 2012 P, China maintained the "double balance of payments" situation, and asset prices were facing enormous devaluation pressure. If this expectation led to the trend of capital outflow, a trend of conformity would be formed, which would constitute a fatal blow to asset prices.

Taking into account the excessive leverage of Chinese government and enterprises, asset devaluation will inevitably lead to debt crisis and financial bad debts, and then fight against demand. Banks will be reluctant to lend. This credit chain reaction will make China face a great depression crisis.

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Therefore, asset price stability is a prerequisite for China's economic stability and pformation. Asset devaluation is like opening Pandora's box, and fragile economic structure will be dealt a fatal blow to the market expectation deterioration.

However, in view of the signs of bubbles in China's property market prices, they can neither fall nor continue to rise. The best way is to freeze, limit purchases and fiscal policies to combat speculative demand, while supporting liquidity.

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< p > if China has a double deficit situation, the liquidity of foreign exchange will turn to passive contraction, which is obviously not conducive to stabilizing asset prices.

In particular, the direct implementation of loose monetary policy in passive contraction may result in debt being out of control and asset price bubbles.

Therefore, the second best choice to maintain stability is to stabilize the assets with strong Renminbi.

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< p > however, the current situation shows that the strong RMB a href= "//www.sjfzxm.com/news/index_q.asp" policy < /a > can temporarily prevent capital outflow, but has attracted a large number of speculative capital inflows.

It is reported that the central bank may restart the open market operation, hedging the impact of the continued growth of foreign exchange.

China's financial policy is faced with difficulties in raising interest rates or cutting interest rates, so it can only be put into the pool.

In view of the fragility of the real economy, China's monetary policy is getting smaller and smaller. Obviously, China does not need to continue to invest more resources in order to get a fragile stability.

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