Ye Xiuliang: China responds to the way of trade war

Ye Xiuliang

In the article "China must block financial hidden dangers during the trade war" issued by the "Lianhe Morning Post" on August 6. The author has explained that China's number one financial danger during the trade war is due to the existence of the last President of the People's Bank of China in recent years.The original exchange system design, after consumption of a large amount of foreign exchange reserves from 2015 to 2017, still cannot prevent Andrarr from Andrarrrrrrrrhives;Financial turmoil.

Recently, the renminbi and Chinese stock markets have reached a record low, which also stems from the deviation of this exchange system design.

Beijing Yimeng urged the current leadership to correct this major deviation and hidden dangers in order to effectively control the exchange rate of RMB, avoid excessive decline in the stock market, and follow up a more serious vicious cycle: the most effective measure is to seal the channels that are mainly abused as capital escape (Including other channels described earlier), as well as the Hong Kong RMB futures market (see below) with administrative or economic means (see below) to ensure that China has sufficient capital control capabilities (that is, a certain short -term capital account itemNon -free exchange).

The article also explained that the "ternary paradox and Andrdquo; and the explanation of this capital control ability (that is, the main loopholes of the capital) in international macroeconomics.Rotating and looseness to support the stock market, bond market and economic growth, it will not cause the above -mentioned Andrarrrr; the stock market to fell on Andrarr; the capital to escape the vicious cycle of Andrarrrrrrrrrhivet;This trade war stands invincible.

Other financial hidden dangers and feasible measures

Other mistakes of the last tranquility and China Securities Regulatory Supervisor allowed shadow banks to develop rapidly without rigorous demonstration, and mistakenly promote the excessive development of stock index futures and financing securities and securities securities.Hidden dangers; deleveraging will definitely cause considerable debt defaults and stock prices.

Although deleveraging must be done in the long run, it will now assist in triggering the above -mentioned and other vicious cycles, and worsening the economy.As mentioned earlier, as long as the vulnerability of capital escapes is sealed to ensure China's certain capital control capabilities, the pedestrian can support the stock market, bond market and economic growth without worrying about the exchange rate of the RMB exchange rate. Even if the leverage is too high now, it is too high, Not to cause problems immediately.Of course, after the war, China should still restart leverage.

China is not suitable for restarting stock index futures now, and it should be abolished the Hong Kong RMB futures market that is very harmful (administrative means or the following economic means: through a highly high proportionThe article has explained that China has very little benefits to the two futures markets, but it is extremely troublesome.

The reasoning of the last session of the Securities Regulatory Supervisor and the PICC is also quite biased (without discussing the macro risks involved in the macro risk, high -leverage futures trading can induce panic, capital escape, drive the current exchange rate and the stock price to a severe high or low level, and ordinary investment for ordinary investmentThe possible harm).

Taking Singapore as an example, after the internationalization of Xinyuan that year, it was decided not to set up Singapore's stock index futures and Xinyuan forward exchange market to speculate on speculators.These two decisions played a role in protecting Singapore when the Asian financial turmoil and other external financial crises.

The affected country in Asia's financial turmoil has set up the two markets in accordance with the mentality of people and me because of the rigorous discipline, and it is even severely damaged.The last session and the securities regulatory supervisor also made the same mistake. From 2015 to 2017, it assisted in the loss of large amounts of foreign exchange reserves in China, and the exchange rate and stock price plummeted.The current pedestrian and securities regulators should be learned.

Although the RMB and the stock market have fallen a lot, it is also these adjustments that make it more secure. The lower RMB will also help increase China's export competitiveness and offset the impact of US tariffs on China exports, making China more able to fightA long -lasting battle.

On the contrary, although Meihui (He and the United States) is now strong, its negative impact (such as weakening the competitiveness of US exports) will gradually emerge with time, and the more the trade war is, the more difficult it is to defeat the United States.

Therefore, China can slightly help its exchange rates and stock prices stabilize to avoid unnecessary vicious circulation, but it should also be optimistic about the adjustment of earlier exchange rates and stock prices under the premise of blocking capital evasion.

During the trade war, China must implement economic stimulus measures, such as the expansion of the above currency or multiple fiscal stimuli (provided not to cause structural wealth) to avoid serious economic recession and the vicious cycle of its triggered (such as urgent asset prices, such as urgent asset pricesThe banks caused by the fall and the subsequent financial storm).

In terms of housing market, the government should not let go of the premium house price measures to stimulate the housing market and economy. Otherwise, housing prices will rise sharply at any time, and the housing market bubble is more dangerous and difficult to deal with.

On the contrary, the government can provide a large number of Andrdquo;

Due to its considerable profits, in addition to fiscal pressure, local governments can also have the enthusiasm for promoting due to profit sharing (in the past, it was not successful to ignore this enthusiasm).Because it can be far below the dream of private house prices, when the Chinese citizens can resist the suffering of the trade war, they can really feel the government's good intentions and care, so that they will vow to accompany the government to complete this long -term war.In order to accelerate progress to timely stimulating the economy, and avoiding the government from investing a lot of funds.

The government can consider the pre -sale of building flowers in overseas developers. For example, after the acquisition of 20 % of the households, after completing the foundation project with this batch of funds, applying for a mortgage bank for 2030 % to complete the second phase of the project, and then ask the bank to ask for the bankThe next batch of money is issued until the real estate is completed and the end of the end is collected.Due to the great demand for rational price houses, this measure is sufficient to support China's economic growth during the trade war, and it can also solve the problem of high housing prices in the long run.

Finally, according to the "stagnant effect andrdquo; (HysterEsis Effect) theory in international macroeconomics, the establishment and failure of each enterprise involves a large one -time investment cost (SUNK COST): such as developing and selling outlines, establishing brands, The cost of establishing a relationship with suppliers.

When the enterprise closed down due to the high exchange rate or tariffs, even if the exchange rate or tariff finally fell back to the original level, these companies would not reopen their jobs (unless the exchange rate and tariffs fell to the one -time investment cost that the enterprise believed to be re -invested)Even related countries may permanently lose these enterprises and industries.

Therefore, during the trade war, the Chinese government should set up a specialized department to evaluate whether the long -term damaged enterprises are worth existence.If it is, it is advisable to help these enterprises avoid closure or assist them in transformation, so as not to permanently lose these industries after the trade war, and it also increases the short -term and long -term employment difficulties of the people.

Of course, the depreciation of the aforementioned RMB can also help these industries the impact of tariffs on tariffs.On the contrary, under the double blow of tariffs and rising exchange rates in some US companies or industries, it is more likely to have a lag effect and disappear permanently.

What is the victory and what is defeat

Fortunately, no matter how tragic the trade war is, it is not a nuclear war that is a real gun and a real bullet that is enough to destroy human civilization.If you can use this tragic trade war, let humans (especially Chinese and American people) realize that such Andrdquo; and the terrible of Xiu Xidde trap, so as to think about what kind of co -governance method or system is the system.Design to prevent the hegemonic battle that is enough to destroy human civilization, it is not a good thing.

In addition, according to Germany and Japan's experience in World War II, Andrdquo; although good, if it is used, it has also caused the German -Japanese nationals to suffer from war.Those who can use the US national strength to implement the ambition of hegemony, and it is difficult to protect China.

If China only tried to replace the United States hegemony after the battle of the terrible and lasting National Games, it still could not escape the trap.This Andrdquo; in fact, it will only cause the future defeat of China and humans. Therefore, China's purpose should be: Since this wounded and lasting trade war should not be avoided, it is necessary to pass through the war after the war." Of course, the depreciation of the aforementioned RMB can also help these industries the impact of tariffs on tariffs.On the contrary, under the double blow of tariffs and rising exchange rates in some US companies or industries, it is more likely to have a lag effect and disappear permanently.

What is the victory and what is defeat

If China only tried to replace the United States hegemony after the battle of the terrible and lasting National Games, it still could not escape the trap.This Andrdquo; in fact, it will only cause the future defeat of China and humans. Therefore, China's purpose should be: Since this wounded and lasting trade war should not be avoided, it is necessaryGoverning design, taking back the permanent peace between China and the United States and human beings. If successful, it will be the first time that human beings can crack the wisdom of Xishidde trap.

The author is an associate professor at the Department of Economics of Nanyang University of Technology in Singapore

If China only tried to replace the United States hegemony after the battle of the National Games in the tragic and lasting national Games, then it would still not be able to escape the trap of Xunxida, and the battle that was enough to destroy humans would be only a matter of time. Then this Andrdquo; in factIt will only cause the defeat of China and humans in the future.