You have been asked to interpret for a Mandarin-speaking economist. He is giving a speech at an international conference on currency depreciation in Shenzhen, China.
Listen to Speech
Transcript and reference translation
大家好。近期，人民币汇率有所升值。往前看，既有支持人民币升值的因素，也有支持人民币贬值的因素。未来可能推动人民币贬值的四大因素不能忽视。Hi everyone. Recently, the RMB exchange rate has appreciated. Moving forward, there will be elements which will support the appreciation of the RMB, while there will also be elements that support its depreciation. There are four elements that may drive the RMB to depreciate in the future that cannot be overlooked.
一是美联储退出量化宽松货币政策。今年一季度，市场对美国通胀回升、美联储货币政策收紧的预期较高，10年期美国国债收益率一度触及1.78%的疫情以来高点，美元指数也升至93.4。二季度以来，美国经济数据总体仍较为强劲，通胀数据远超预期。4月，美国消费者物价指数同比升4.2%，高于3.6%的市场预期，创2008年9月以来新高；环比升0.8%，高于预期的0.2%，创近10年来新高。美4月份工业品价格指数同比涨幅更是达到6.2%。以5年期通胀保护债券收益率衡量的通胀预期超过2.8%，创下2005年以来最高点。若未来通胀持续超预期，美联储很可能收紧货币政策，资金从新兴市场大幅回流美国，包括中国在内的新兴市场货币将面临明显贬值压力，需要警惕。First is that the Federal Reserve System will start tapering. In the first quarter of this year, it was expected by the market that US inflation would recover and the Fed would enact a monetary tightening policy. The yield on the ten-year US Treasury bond hit a post-epidemic high point of 1.78% and the US Dollar Index also rose to 93.4%. Since the second quarter, aggregate data for the US economy was fairly strong and inflation data far exceeded expectations. In April, the US Consumer Price Index rose 4.2% over the same period, which was higher than the market forecast of 3.6%, and set a new high since September 2008. The link relative ratio rose 0.8%, which was higher than the forecast of 0.2%, and set a new ten-year high. In April, the year-on-year increase of the US Industrial Product Price Index even reached 6.2%. Inflation expectations measured by the five-year Treasury Inflation-Protected Securities yield exceeded 2.8%, setting the highest point since 2005. If inflation continues to exceed expectations in the future, the Fed is likely to tighten monetary policy, and funds will flow back from emerging markets to the US. The currencies of emerging markets, including China, will face significant depreciation pressures, and need to be vigilant.
二是美国经济强劲复苏带动美元走强。一方面，美国疫苗接种较为迅速，市场普遍预期美国疫情将在年内得到有效控制，部分州已宣布将于近期完全解除疫情期间的防疫措施，重新开放经济，这支持一季度以来美经济指标不断走强。另一方面，拜登政府上台后，已推动国会通过了1.9万亿美元的刺激法案，近日又宣布了6万亿美元的经济刺激计划，这将对美国本已较为强劲的疫后经济复苏提供新的催化剂，带动美元指数走强，对包括人民币在内的新兴经济体货币带来贬值压力。Second is that the strong recovery of the US economy has driven the rise of the US dollar. On the one hand, the US vaccination rollout has been fairly fast. The market generally expects that the US epidemic will be effectively controlled within this year. Some states have announced that they will completely lift the epidemic prevention measures in the near future and reopen the economy. This supports the continuous strengthening of US economic indicators since the first quarter. On the other hand, since it took office, the Biden administration has pushed Congress to pass a stimulus bill of $1.9 trillion US dollars, and recently announced a six-trillion-dollar economic stimulus plan. This will provide a new catalyst for the already relatively strong post-epidemic economic recovery in the US and drive the strengthening of the US dollar index. Emerging-economy currencies like the RMB have brought depreciation pressures.
三是全球疫情逐渐得到控制和供给能力恢复。2020年新冠肺炎疫情暴发后，全球供给能力受损。中国率先控制住疫情并实现复工复产，经济快速恢复，出口表现强劲，今年以来延续了恢复发展态势。一季度GDP同比增长18.3%，1至4月，出口同比增速为44%，贸易顺差1579亿美元，同比增长174%。目前，欧美等经济体疫苗接种进度较快，正在计划解除国内禁令并重启开放。前期一度失控的印度疫情也得到控制，新增病例数从高位回落。未来，随着疫苗接种率进一步提升，各国可能会先后形成有效免疫屏障，这将推动全球经济快速恢复，供给能力明显增强，形成对中国出口和人民币汇率贬值的压力。Third is that the global pandemic has gradually been controlled and supply capacity has recovered. After the outbreak of COVID-19, global supply capacity has been impaired. Since taking the lead in controlling the epidemic and resuming work and production, China’s economy has recovered rapidly, and exports have performed strongly. This year, China has continued its recovery and development trend. In the first quarter, its GDP grew by 18.3% year-on-year. From January to April, its exports grew by 44% year-on-year, and its trade surplus was $157.9 billion US dollars, a year-on-year increase of 174%. At present, vaccination efforts in Europe, the US and other economies are progressing rapidly, and plans are being made to lift domestic prohibitions and reopen. The epidemic in India, which was out of control in the previous period, has also been contained, and the number of new cases has fallen from previously high levels. In the future, as vaccination rates continue to increase, countries may successively form effective immune barriers, which will promote the rapid recovery of the global economy, significantly increase supply capacity, and put pressure on China’s exports and the devaluation of the RMB exchange rate.
四是美国资产泡沫可能破裂，全球避险情绪升温。受美国大规模量化宽松政策、疫苗接种、经济复苏等因素影响，美股疫情后表现反而亮眼，道琼斯、纳斯达克、标普三大股指较疫情暴发以来的低点反弹超70%以上，屡创历史新高，市盈率已远远高于历史平均中位数。股市繁荣过分依赖宽松货币政策，明显超过经济表现，缺少坚实的经济基本面支撑。未来，美联储退出宽松货币政策，有可能刺破资产泡沫，引发美资产价格大幅调整，刺激全球市场避险情绪升温，资金回流美国救市，推升美元指数，拉低非美货币。Fourth is the possibility of the US asset bubble bursting and global risk aversion rising. Affected by the large-scale quantitative easing policy, vaccination, economic recovery and other factors, the performance of US stocks after the epidemic has been remarkable. The three major stock indexes of the Dow Jones, Nasdaq, and S&P have rebounded by more than 70% from their lows since the outbreak. They have repeatedly hit record highs, and the P/E ratio has been far higher than the historical average median. The prosperity of the stock market relies too much on loose monetary policy, which obviously exceeds economic performance, and lacks solid economic fundamentals. In the future, the Fed may start tapering, which could break asset bubbles, trigger a sharp adjustment in US asset prices, stimulate risk aversion in the global market, return funds to the US to rescue the market, push up the US dollar index, and pull down non-US currencies.
Adapted for educational purposes from 未来可能推动人民币贬值的四大因素不能忽视.