Xiang Songzuo: A Huge Increase In Export Will Be A Disaster

At the academic seminar held yesterday by the Shenzhen banking regulatory bureau, deputy director of the Institute of International Monetary Studies, Renmin University of China

Xiang Songzuo said that since 2004, he has opposed the appreciation of the renminbi. Before the industrialization and urbanization of China were completed, it would be too early to let the RMB float against the US dollar, which would easily lead to the Chinese economy being controlled by the US monetary policy.

He said that the ultimate goal of the United States in demanding China to appreciate the renminbi is to devalue the renminbi and profit from it first.

If the renminbi appreciates significantly, "exports will be faced with a disaster. Unemployment and social stability will follow. If China allows the renminbi to slowly appreciate, the hot money will go on and on, and China's economic bubble will intensify. The direct consequence of the bubble will be the polarization of income distribution and wealth, and the further imbalance of the economic structure. China's industrialization and urbanization process will be disrupted or even interrupted."

He believes that the internationalization of the RMB should be gradual and progressive. First, it will turn the renminbi into an important international trade settlement currency, and then become an international financial settlement currency. Finally, it will become the United States dollar and euro.