1/5 HUANG Yiping, Chairman of CF40 Academic Committee and Vice-chairman of NSD at Peking University, said the RMB XR has been increasingly flexible, and XR level is grounded in fundamentals. it is suspicious to label China as a #currency #manipulator.
mp.weixin.qq.com/s/_SJO9IlZK0-y…
2/5 Huang said, we must realize there is an outdated concept of #XR, which I think is #Trump’s understanding - #currency #depreciation is good for #economy, as a weaker currency is conducive to #export #competitiveness. In fact, this notion is no longer the case in nowadays.
3/5 As with increasing levels of capital account liberalization among countries, XR impacts on economy through financial channels, depreciation anticipation would lead to further #depreciation, and thus facilitating capital outflow, which would adversely impact on the economy.
4/5 Huang said, "in current China, impact of #financial channels is greater than that of trade channels, so is the case in the US. So I doubt #Trump’s support for a weaker #dollar will be good for the US, as they heavily depend on capital market and financial services industry."
5/5 Huang suggested, China should: 1. prepare for the worst, and avoid financial war escalating to a higher level; 2. move to a clean floating XR; 3. focus on our own reform and opening-up tasks, esp. implementing competitive neutrality internally, and expand openness externally.
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