How Sterilization Ability Infulunce Renminbi Anchor Effect

In recent years, global economic is more and more imbalance. Developed countries pin this imbalance on the export policy of china, and force Renminbi appreciate. China worried about the appreciation make its export competitiveness disadvantage and then influences its economic development. So China is afraid about Renminbi appreciation. From the respect of sterilization ability,the present paper figured out that Reminbi appreciation can bring Asian country currency appreciate together. Then Renminbi appreciation will not be a disadvantage of the export competitiveness. China needn’t afraid of Reminbi appreciation.Frist, the present paper analysed the relationship of sterilization ability and economic scale and figured out the large the economy scale, the stronger the sterilization ability.Because the larger the economy scale, the larger the demand of currency. When international reserve cause currency supply increase,it can absorb partial currency. So the inflation pressure will be low and the sterilization ability will be strong. Based on Fisher equation, the present paper build the theoretical model of sterilization ability and economy scale, and then used the panel data among1993to2010to do analysis. We found that the larger the scale of economy, the stronger the sterilization ability.Used the above conclusion,we analysed the reaction of small Asian country when Reminbi appreciate. If Reminbi appreciate while others not, the small country can get advantage of export competitiveness. But the international payments surplus and appreciation anticipate will attract large scale of foreign capital. The supply of currency increase and then CPI move up because of their weak sterilization ability. The fluctuation of macro-econony would influence output,so follow the currency anchor is the best strategyIn the end,the present paper fingered out that Reminbi can prevent the currency of East Asian country competitively depreciation, it also can bring East Asian currency appreciate together. Reminbi has become the "implicit anchor" of East Asia currency. China should make Reminbi appreciate steadily. Meanwhile, we should develop our real economy to improve our sterilization ability, and then enhance the role of Reminbi in the East Asia to make Reminbi internationalization.