According to the China Glass Network, in light of the domestic and international economic and financial conditions, as well as China's balance of payments, the People's Bank of China has decided to further advance the reform of the RMB exchange rate mechanism and increase its flexibility. This move has had a positive impact both domestically and internationally. Experts and scholars interviewed by this reporter noted that enhancing the RMB's exchange rate flexibility is beneficial for promoting economic restructuring and achieving comprehensive, coordinated, and sustainable development.
During the global financial crisis, China appropriately reduced the volatility of the renminbi to cope with the challenges. This strategy aligned with China’s national interests and helped stabilize and recover its economy. Li Daokui, a member of the Monetary Policy Committee of the People's Bank of China and a professor at Tsinghua University, emphasized that the current reform of the RMB exchange rate mechanism is being advanced at the right time. He stated that from a national perspective, this decision is appropriate. With China's economy showing a strong recovery trend, the focus now is on transforming the development model and accelerating structural reforms. Meanwhile, the global economy is slowly recovering, but a double bottom is unlikely. In this context, it is an ideal opportunity to continue advancing the RMB exchange rate reform.
It is important to note that during the height of the international financial crisis, many countries saw their currencies depreciate against the U.S. dollar, while the RMB remained relatively stable. This stability has been a significant contribution to global economic recovery. Li Daokui added that the country's exchange rate policy during the crisis has received recognition from major world economies.
Ding Zhijie, a professor at the University of International Business and Economics, highlighted that the relative stability of the RMB played a crucial role in mitigating the effects of the financial crisis. He pointed out that with the evolving domestic and international economic situation, the external conditions for further reforming the RMB exchange rate mechanism have been established.
In today’s global monetary system, where major currencies are subject to floating exchange rates, export companies must adapt to fluctuations between their local currency and other currencies. Li Daokui believes that China’s imports and exports are becoming more balanced. In 2009, the ratio of China’s current account surplus to GDP dropped significantly, and this proportion has continued to decline this year. The balance of payments is now closer to equilibrium, meaning there is no foundation for large exchange rate swings. This should not have a severe impact on export companies. However, in the long term, businesses need to be proactive—adjusting product structures, improving technical management, and leveraging their competitive advantages to develop globally competitive products.
Ba Shusong, deputy director of the Financial Research Institute at the State Council Development Research Center, noted that with the global economy gradually recovering and China’s economic stabilization, export enterprises now have greater expansion potential. He emphasized that demand is a key factor, and while exchange rates are one influencing factor, the ability of enterprises to adapt should not be underestimated. For example, after the 2005 exchange rate reform, many believed that export enterprises would suffer, but in reality, they adapted and maintained a positive growth trajectory.
Zhao Xijun, a professor at the School of Finance at Renmin University of China, stressed that enterprises should actively respond to exchange rate fluctuations in line with the goals of economic restructuring. First, they should adjust production capacity, avoiding the repetition of high-energy, low-value product lines. Second, companies should focus on industries supported by the government, such as high-tech sectors. Third, they must look beyond domestic markets and resources, as exchange rate flexibility will affect all aspects of their operations, including raw materials, products, and costs. Finally, they should manage the risks associated with exchange rate fluctuations, especially for those engaged in cross-border trade. Before any payment or settlement, they should assess the potential impact of exchange rate changes on costs and take appropriate measures.
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