Chapter 1707 Who Will Pay the Bill

In fact, the higher-ups have now discovered that saying that China is a big manufacturing country is not a compliment at all.

If you are doing high-value-added precision manufacturing, then the profits will be very high. Such manufacturing powers, like Germany, the United States, island countries, etc., will become developed countries.

As for China, the so-called big manufacturing country mostly relies on cheap labor to become the world's factory. This is an export-oriented economy.

To put it simply, China's foreign trade is mainly aimed at earning foreign exchange through export.

This model can quickly improve technology and efficiency and enhance international competitiveness, but at the same time it also has a great risk, that is, excessive dependence on the international market.

Once the international market changes, it will have a serious impact on this economic development model, or even hit it. The price paid for this kind of economic development is very high.

Developed countries are all domestic demand-oriented economies, and they pursue high consumption, high wages and high investment.

China's foreign exchange earning has indeed earned a lot of foreign exchange, and then? Part of it is used for foreign exchange reserves, and the other part is mainly to buy foreign bonds.

The bonds issued by foreign countries are all to promote their own consumption. That is to say, when you buy other people's bonds, it is equivalent to giving money to others and letting them live a profligate life.

How much money can you earn from bonds is just to keep your value. But people use your money to stimulate the domestic demand economy, and they have already earned more.

Huaxia cannot rely on cheap labor as a means of competition, and cannot use damage to the environment as a means of development. Such development is very unsound.

Just like China has the largest foreign exchange reserves in the world, this seems to enhance the country's ability to resist risks, but it also has a huge disadvantage, that is, it is easy to be kidnapped by foreign exchange, especially the US dollar.

Selling the US dollar will affect the financial market, China's stock market, and the RMB exchange rate. Then the result is that you can only buy foreign exchange, but not sell it, which is equivalent to helping the United States stabilize the exchange rate of the US dollar.

The economic strength of the United States and the United Kingdom and the prosperity of the financial market have a lot to do with the status of their currencies in the world. But this position is not static.

Just like back then, didn't Soros also lead people to attack the exchange rate of the British pound, and then made a lot of money. It was also that time that the U.S. dollar replaced the British pound and became the number one currency in the foreign exchange market.

The upper echelons of Huaxia have actually noticed this,

Now they are gradually reducing the production of these low-value-added products, such as clothing and leather shoes in the past. They are indeed very competitive internationally, but with the EU's anti-dumping fine, won't they be greatly affected?

At this time, Huaxia is also doing import substitution, that is to say, it is developing related technologies for products that Huaxia has to import, so as not to be restricted by foreign countries.

Just like China is the largest pen-making country in the world, such a little guy that produces ballpoint pen balls must be imported from abroad.

Among them, the island countries have the best technology, followed by Germany and Switzerland. It seems like a worthless little thing, but after forming a quantity, it is a huge profit.

This also directly reflects that there is still a big gap between Huaxia and the world's advanced in some high-tech materials.

Is it because China lacks some scientific research talents? Of course not, Huaxia's talents are definitely very sufficient.

But many talents are doing other things, such as focusing on military technology and so on. This is of course true. If the military strength is not strong, it will never become a powerful country.

But the military-civilian combination has done too badly. Many technologies can be used directly for civilian use, which can not only improve people's livelihood, but also create profits, so that more funds can support the development and innovation of technologies.

Whether the export-oriented economy is good or not is very good, but the export-oriented economy relies on the economic advantages of the country. If this advantage is technology, it will be perfect. Even if it is capital, it will be better, but if it is just cheap labor, what do you think you can be proud of? of?

Isn't it right that the country develops and people don't earn more? Only when people's living conditions are better, that is what people expect.

Huaxia has always said that the development models of other countries can only be used as a reference and must not be copied. This is a truth that everyone understands.

Because the national conditions of each country are different, no one can develop according to the model of others. Just like Thailand at the beginning, if it develops according to other people's model, how big are the hidden dangers and how miserable are the results?

Even without Feng Yu's participation, if Soros takes the lead, the economy of Thailand and others will be severely hit, and a series of countries closely related to its economy will be implicated.

Huaxia is worried that this will happen, so it has increased its foreign exchange reserves, but not too much.

In fact, the higher-ups have also discovered that too many foreign exchange reserves have serious disadvantages, and improving the status of the country's currency in the world is the most correct way at this time.

China has too many U.S. national debts, which is equivalent to binding its own economy to the U.S., so the depreciation of the U.S. dollar will stimulate the appreciation of the RMB, which will shrink the U.S. debt in China’s hands.

For example, if the exchange rate changes from 1:8 to 1:7, then the United States originally owed China 800 million RMB, but now it only needs to pay back 700 million RMB. If the debt is paid, it will also cause inflation in China.

What to do if you don't want to lose money, continue to buy US dollars, increase the exchange rate of the US dollar, and let Huaxia continue to increase its foreign exchange reserves in US dollars. Then the cost of Huaxia's products exported abroad will rise and its competitiveness will decline.

The main reason is that the United States owes China too much money, and China has too much foreign exchange investment in the United States.

This exchange rate change will have a serious impact on Huaxia's property. If you look at the yen, the exchange rate is very low. Does it mean that the economy of the island country is not good?

RMB appreciation is already a trend. At this time, we should try our best to avoid losses and make this trend slower and more reasonable.

Currency must be consistent with purchasing power, especially combined with the country's economy, which is fundamental.

Of course, many issues may be considered one-sidedly by Feng Yu. After all, he doesn't know much about some upper-level political dynamics, but China's trade surplus is too strong, and a large amount of international hot money is pouring into China. This is definitely not a good thing.

In particular, this trade surplus is mostly obtained by relying on export subsidies. Many enterprises rely on this export subsidy to make profits. Can such enterprises be said to be developing well?

Huaxia's exports are severely restricted by international technical barriers, and there are more and more anti-dumping cases against Huaxia, which will bring a lot of losses to Huaxia.

This time the economic crisis in the United States wants China and other countries to pay for it, so Feng Yu has to find a way to make the United States pay for this idea!

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