| Since the end of 2002, clamor and dispute about the value of RMB having been aroused.In February 2003, a proposition that RMB should appreciate was released by MasajuroShiokawa, Finance Minister of Japan, at the G-7 Finance Ministers Meeting. Before attendingthe meeting, Masajuro Shiokawa declared in various kinds of occasions that he will submit acopy of plan similar to "Plaza Accord" in 1985 against Japanese yen, forcing RMB toappreciate. The Asia trip of John Snow, Finance Minister of U.S., in September 2003, pushed theoppression to the summit. What needs to be paid attention is, the pressure that internationalcommunity causes RMB to appreciate has not disappeared with each passing day. Recently,American Secretary of State Rice Anne has also exerted pressure on China frequently. As a matter of fact, the exchange rate of RMB is underestimated. And at the same time,the exchange rate system of China, which pegs RMB to U.S. dollar, is not fit for the futuredevelopment of China. That can be said to be the two common understandings of the flaws ofexchange rate system by most economists. It is essential to reform the system. However, thechoice of exchange rate system of one country is a question concerning the overall situation.Any fault of it will cause the calamitous consequence. In order to prevent the low-pricedJapanese goods from exporting outside in 1985, U.S., France, Germany and Britain tookcorresponding means to force Japan to sign "Plaza Accord". It is generally acknowledged asthe root trouble which causes Japan's economic recession, and can be seen as a lesson. The appreciation of nominal rate of RMB must be cautious, and avoid acting hastily. Inorder to gain the time for reform, the task of top priority is how to " reduce pressure " forRMB effectively while do not adjust exchange rate temporarily. How to "reduce pressure"? Firstly, we should know where the pressure comes from. Theorigin of the exchange rate battle is mainly a trade question: U.S. hopes to solve the Americangreat amount of adverse balance problem to China through adjustment of RMB. We know thatbecause of the statistics of the export of American side, U.S. ignores the transit trade andover-evaluating the import from China. And, U.S.'s huge adverse balance is the result of sortsof discriminatory control of exports to China by U.S. government. Although like this, it is anirrefutable fact that there is huge trade surplus under China's current account. The tradesurplus has accumulated and formed the huge foreign exchange reserve for many years. Tothe end of 2004, China's foreign exchange reserve is up to 609.9 billion dollars. The hugeforeign exchange reserve suggests that China's outside economic is out of balance, and thereason of it is the exchange rate of RMB is underestimated. The source of trouble is the over-large foreign exchange reserve, so how to reduce thequantity of it or slow down its growth rate for the moment? The direct method is to "use themoney". Firstly, in September of 2003,China raised individual carrying standard of theforeign currency when going abroad. Then, since November of 2003, China procurementgroup has gone to U.S. three times to purchase products which value 10 billion dollars. Moreover, In December of 2003, China supplemented the Bank of China and the ChineseConstruction Bank with 45 billion dollars from international reserves. If the measures above should be called as act of "increase expenditure", then the decreaseof the export rebate rate can be regarded as "dam" act to reduce the export. In October of 2003,State Administration of Taxation issued "notice about adjusting the export rebate rate ",stipulating that the average level of current export rebate rate will be reduced by about 3percentage points . We know, export tax rebate system is a kind of tax system which exempt the indirect taxthat should pay in domestic according to the tax law if the goods export abroad, thus make theexport commodities enter the international market and participate in the internationalcompetition without tax. Diff...
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