RMB exchange rate stability helps emerging market economies recover

--Visiting Argentine director of International Strategy Institute Haulhe Castro Xinhua Buenos Aires, February 22 (Xinhua News agency reporter Song Jieyun Feng Junyang), director of the Argentine Institute of International Strategic Studies, China experts Haulhe Castro said that the stability of the RMB exchange rate can not only make China's economy recover smoothly,　　Emerging market countries will also benefit from continuing to effectively boost China's market demand and boost their economic recovery. In an interview with Xinhua news agency, Haulhe Castro said that some Western countries have pressured the Chinese government to appreciate the renminbi in a short period of time, claiming it would reduce China's trade surplus and make the world economy more "balanced".　　This is in fact the western countries in the attempt to pass the value of the renminbi to pass the financial crisis costs.　　He said that China has played an active role in the global response to the financial crisis and played a role as a responsible power, and some developed economies have managed to shirk their responsibilities and obligations and take various means to pass on the cost of the crisis. The Argentine economist warns that the prospect of a recovery in the US economy is still uncertain and that the sovereign debt crisis in some EU Member states is more worrisome.　　Under such circumstances, China's economic stability is of great significance to the steady recovery of the world economy and the avoidance of secondary dip. He noted that the Chinese economy rebounded rapidly last year as the Chinese government unveiled a series of positive measures to deal with the crisis. But in the process of recovery, the basis of China's economic growth needs to be further consolidated and strengthened. In this critical period, China particularly needs to maintain the stability of its economic and financial policies.　　If investors and speculators misread the direction of China's economic policy, there is likely to be a devastating "butterfly effect" on the Chinese economy. He warned that if the current situation, the trend of a sharp appreciation of the renminbi, will lead to a large number of international hot money and domestic liquidity into China's capital markets and real estate market, rapidly blowing China's virtual economy bubble.　　If China's financial markets are volatile, the world economy will be in crisis again, and emerging markets will be the first to suffer. He said some Western economists accuse the renminbi of being undervalued, saying the renminbi could expand exports to China after appreciating it, but they did not see the real impetus for China's increasing imports from sustained economic growth and rising living standards.　　In this sense, it is a short-sighted act for Western countries to exert pressure on RMB appreciation, which is a long-term strategic action to help China's sustained and steady economic growth and continuously raise the income level and consumption demand of Chinese people. He stressed that primary products such as energy products, agricultural products and minerals accounted for a high proportion of exports from emerging market countries.　　The biggest concern of emerging market countries is not the renminbi, but the steady growth of China's economy and the growing demand for its markets. For example, he said that in recent years Argentina's exports to China have increased, and China has become Argentina's largest destination for agricultural exports. The main reason for China's continued growth of soybeans from Argentina is not peopleCurrency to Argentinian peso exchange rate rise, but the Chinese people's living standards continue to improve, meat products consumption increased year by year, so need to import a large number of soy products as animal husbandry feed. If the renminbi appreciates substantially, he said, it could spur global commodity prices to soar in the short term, with a new "bull market" that will increase export earnings in emerging markets in the short term. But it is likely to lead to a relapse in China's economic recovery, resulting in a fall in real demand, triggering a double-dip in the world economy and a burst of commodity price bubbles, which will be an unbearable consequence for emerging market countries.　　Therefore, in the current situation, the renminbi exchange rate to maintain basic stability for emerging market countries is undoubtedly the most favorable. Haulhe Castro that governments have absolute autonomy over exchange rates, other countries have no right to intervene, and that no exchange rate policy is absolutely perfect. In Latin America, the exchange rate policy varies widely. Countries such as Brazil, Chile and Uruguay have little or no interference in their currency exchange rates, while Argentina and other countries have managed fluctuations that allow exchange rates to float freely within a certain range, and the central bank will intervene decisively if there is a trend of significant appreciation or devaluation in the short term.　　These exchange rate policies have their own advantages and limitations, but Latin American countries in the exchange rate policy of mutual respect and coordination, and jointly safeguard regional economic and financial market stability. He stressed that in today's interconnected and interdependent economies and financial markets, countries can coordinate their exchange-rate policies, but not unreasonably accuse and rudely intervene in other countries ' exchange rate policies.