Chapter 661 Asymmetric Market and Demand

On the phone, Wei Xiaofan also mentioned another change that seems a bit novel now, but in fact it has been going on for a long time throughout the 1980s.

That is the current mainland China, which has completely stopped the direct use of foreign currencies such as US dollars.

If foreigners want to use money in China, they can only choose to exchange foreign currencies such as U.S. dollars for foreign exchange certificates to buy various commodities specially for them.

For example, friendship stores, cultural relics stores, duty-free shops, hotels, etc. have all stopped accepting foreign currency directly. Foreigners who want to buy things in these places can only go to the complicated exchange of foreign exchange certificates before buying things. .

Even later, the wages of many Chinese employees of foreign-funded enterprises were originally paid according to the standards of the head office such as US dollars and Japanese yen. Foreign exchange certificates are then issued to the staff.

If employees of foreign companies want to buy grain, oil, rice and salt, they have to exchange foreign exchange certificates into RMB before they can use them in their daily lives.

At the beginning, Chinese people wanted to enter these foreign stores and hotels, and buy imported products that could not be bought with RMB, such as radios, cameras, watches, bicycles, suits, cigarettes, perfumes, leather bags...etc. However, to use foreign exchange certificates, it must be led by foreigners or Chinese employees working in foreign-funded enterprises.

It wasn't until the deepening of the reform and opening up that these places open to the outside world also needed more turnover, and then it gradually became that as long as you have foreign exchange certificates, you can go in and shop.

This strategy is actually unimaginable in later generations.

But this is what really happened in this era. The reason is that Huaguo is extremely short of foreign exchange, so this method was thought of to increase foreign exchange reserves.

In fact, as soon as this strategy came out, many foreigners in big cities became popular.

Usually they only need to bring people into friendship stores and other places to buy things, and then they can get benefits.

It is not so surprising that some girls even voluntarily sacrifice themselves because of this.

Since 1840, the backbone of Huaguo was broken

Women sacrificed themselves for foreigners

No reason needed.

Foreign exchange certificates were formally issued on April 1 this year, making it mandatory to use them, and they will not be completely abolished until 1995.

In 15 years, of course, not all the time. In fact, after 1992, the foreign exchange certificates were basically unusable, and no fool would use them again, even foreigners.

Another example is now, it was announced in April, but it was not until the beginning of September that this order was fully implemented.

Including the last time Yin Jun went to the cultural relics store in Shanghai in July, he used US dollars instead of foreign exchange certificates.

Because everyone is not a fool, if you get US dollars, it is your own credit. If you use foreign exchange certificates, all the credit goes to the bank, and your side is just a trading institution, and there is no credit.

Only now, when there is really no way to prevaricate, they can only let Wei Xiaofan use foreign exchange certificates.

alright.

Now comes the problem.

Why do everyone hate using foreign exchange certificates so much?

Normally, even if it is a currency exchange coupon, it is nothing, just like we buy food coupons from automatic food coupon vending machines abroad, it is just a value coupon exchanged at an equivalent value.

But Huaguo's current foreign exchange certificates are not just as simple as exchanging foreign currency.

Foreign exchange certificates have an unbelievably cheating exchange rate.

For a while, around 2017, the price of foreign exchange certificates rose again as a collectible.

Yin Jun, who had nothing to do, went to check the past and present of the foreign exchange certificate.

Bai Dushang said that the dual-track currency system established by the State Administration of Foreign Exchange in 1981, on the one hand, the official exchange rate is 1:5.7, and on the other hand, the exchange rate in the international market is 1:8.7.

But this figure is very inaccurate.

Because in the past three years, the exchange rate of US dollar to RMB in China has been around 1:1.5, that is, one US dollar is exchanged for about 1 yuan and 50 cents. This is Yin Jun's personal experience.

In just one year, it is impossible for the renminbi to suddenly depreciate sharply to the point where 1 US dollar is exchanged for 5 yuan and 70 cents.

Therefore, Yin Jun prefers a chart of the exchange rate trend of the US dollar and RMB from 1949 to 2014 produced by Goldman Sachs Huaguo in 2014.

From 1949 to 1980, the exchange rate generally fluctuated between 1.5 and 2, which is similar to Yin Jun's actual experience.

According to the trend above, in 1981, the RMB exchange rate that could actually be exchanged in China, the RMB only depreciated slightly. It is 1:1.7.

However, such an exchange rate is completely contrary to the international exchange rate trend.

In foreign countries, it takes 8.7 yuan to exchange for 1 US dollar.

In China, however, 1 U.S. dollar can only be exchanged for 1.7 yuan, and the purchasing power has dropped significantly.

To put it simply, foreigners who came to China were slaughtered, and they bought things and services at high prices in China.

This matter originally seemed to have nothing to do with the Chinese people, at least it had nothing to do with the vast majority of the Chinese people.

Because foreign exchange certificates are used by foreigners, and you Chinese do not have US dollars, what foreign exchange certificates do you exchange for? Except for a very small number of people, who can have the money to exchange foreign exchange certificates, to buy and consume luxury goods?

but!

Chinese people don't need foreign exchange certificates, but they will slowly and urgently need US dollars.

For example, in the upsurge of studying abroad in the 1980s, more than one million college students and public officials flew to the territories of the United States, Britain, Japan and other countries.

These people must be exchanging dollars and other currencies.

Since the U.S. dollar is already a common currency in the world, no matter which country you go to, you usually exchange it into U.S. dollars. When you go to other countries, you can basically use it directly, or you can just exchange it into the local currency when you go there.

Even the registration fee for students to apply for TOEFL must be in US dollars, which stumps too many poor students.

I won't list them all here.

Anyway, this is enough to show that the people have an urgent need for dollars.

As for the U.S. dollar, until around 2005, before the renminbi and the U.S. dollar announced a floating exchange rate, basically individuals could not exchange foreign currencies including the U.S. dollar at will.

Even if you are an international student, you can only exchange a small part of the US dollar with the school admission notice, let alone the standard 2,000 US dollar exchange amount when you go abroad for a private passport.

Throughout the 1980s, if you needed U.S. dollars, you could only go to the bank to exchange them for U.S. dollars through the foreign exchange certificates in your hand.

However, after such coming and going, the renminbi of the people has become worthless, and they all have to pay a price much higher than the official exchange rate to buy foreign exchange certificates in other people's hands.

okay.

Foreigners buy foreign exchange certificates with US dollars, marks, etc., and they are severely slaughtered by the government. Now you use foreign exchange certificates to exchange dollars, but you are severely punished by middlemen, also known as scalpers. Kill with a knife.

Many people's life savings have shrunk by a large amount during such exchanges.

But there is no way to do this. If there is demand, there will naturally be a market.

Everyone knows that going abroad is very difficult, and there is always nothing wrong with bringing more money with you.

Even if the parents are not rich, they have to buy foreign exchange certificates at high prices to exchange for dollars.

With such an urgent need, it is not only scalpers who make money, but also those foreigners.

What's more, and more profitable is the Huaguo People's Bank, the only bank that issues foreign exchange certificates.

Because the more foreign exchange certificates the people need, the more U.S. dollars must be exchanged for foreign exchange certificates, and if the U.S. dollars are converted into foreign exchange certificates, they will eat a big bite.

I don't know if it will be a bit convoluted when I say this.

But as long as you understand that foreign exchange certificates are an important means for banks to crazily accumulate foreign exchange reserves, that's it.

You said that Chinese people are so smart, did they take advantage of their loopholes?

For example, why should I let your bank make such a fortune, can't I just deal with foreigners?

Foreigners can earn a little more if they directly exchange U.S. dollars for U.S. dollars. If we directly exchange U.S. dollars for U.S. dollars, we can lose a little less. Isn’t that good? is it not OK?

sure!

But there is one thing, when foreigners come to China, they must declare how much cash they bring. Once it is found out that they have concealed it, they will be severely punished.

Besides, most foreigners are not used to using cash, and they don’t have much cash on them. If they want to use money, they usually go to the bank to get as much as they need. Many banks in Huaguo have business relationships with foreign banks, which is very convenient. .

When they withdraw money, the bank will naturally convert the US dollars into foreign exchange certificates, and then give them to them.

During this process, they have no way of accessing their own dollars.

Such a way of doing things, if it is 40 years later, there will definitely be a sense of collapse, but it is like this now, you can only adapt if you don’t like it.

Therefore, even the powerful scalpers get more foreign exchange certificates instead of US dollars.

In this way, it is only ordinary people who need dollars that increase the cost, not others.

The scalpers made a lot of money, and it was only after 2006, when the renminbi continued to appreciate and the scalpers exchanged for dollars, did they gradually disappear at the gates of major banks.

Yin Jun obviously doesn't like such a policy. On the contrary, he thinks it's putting the cart before the horse.

But at this stage, in order to seize every opportunity for development, it seems necessary to do so.

Not only the common people are poor and fearful, but even the country is also poor and fearful! !