'Dangerous Scenario': Strong Dollar To Take Down Weak China

危险来临：强势美元将拿下虚弱中国

Just hours after the Federal Open MarketCommittee announced the end of its bond-buying program, Xinhua News Agencyissued an article explaining how China’s economy was put at risk by thelong-awaited move. Beijing, among emerging market capitals, is especiallynervous about the Fed’s exit from the six-year, $3.9 trillion effort.

Ma Guangyuan, an independent Beijing-basedeconomist, told Xinhua, the official media outlet, that two things are certainin the wake of Wednesday’s announcement by the Fed: the dollar will go higherand dollars will flow from emerging markets back home.

At first glance, China should be relativelyimmune from a strengthening greenback. After all, the renminbi is essentiallytied to the dollar as the People’s Bank of China , the central bank, makes surethe Chinese currency trades near a mid-point it fixes every trading day.

在联邦公开市场委员会公布结束其债券购买前的几个小时，新华社发表了一篇文章解释了中国经济如何被这个期待已久的举措置于危险境地。北京比其他的新兴经济体对美联储退出6年3.9万亿宽松刺激更加忧虑。

马光远，一位独立的北京经济学家，告诉官方媒体新华社，美联储周三的公告将会伴随而来的两件事是：美元汇率将走强，美元将会从新兴经济体回流美国。

乍看上去，中国应该相对而言对走强的绿钞是有免疫力。别忘了央行中国人民银行会确保中国货币每个交易日内在其制定的基准点附近只能小幅波动，人民币汇率实质上是紧盯美元的。

Consequently, there should be no rush outof the yuan, as the renminbi is informally known, into safe-haven Americanmoney. Yet China is only theoretically immune from the crises that ravishedEast Asia in 1997 and Russia in 1998, both triggered by a strong buck.

因此元（人民币的正式称谓）不会陷入回流避险美元的洪流中。然而强势美元在1997年东亚、1998年俄罗斯引发的金融危机中，中国只是理论上不受影响。

For one thing, the link between the Chineseand American currencies costs China dearly: a rising dollar pushes the renminbihigher and the Chinese economy lower. Net exports, dependent on a cheap currency,are now the main prop for China’s growth as consumption is falling andinvestment stagnating. A strengthening renminbi will not affect sales to theU.S., China’s most important customer, but it will price Chinese manufacturersout of their newest markets, where margins are already thin.

As a result of the stronger currency,Beijing will essentially have three choices to create growth. First, it canimplement structural reform, something it has been reluctant to do and which inany event will not produce results in the short-term. Second, Chinesetechnocrats can resort to even more state stimulus, but that stratagem hasalready lost much of its effectiveness. Third, the central bank can engineer adecline in the yuan, something it did in the beginning of this year.

首先，中国与美国货币的紧盯让中国付出沉重代价：上升的美元让人民币汇率走强、中国经济被打压。在内需不振、投资停滞的时候，中国增长的主要支柱就是有赖于廉价货币的净出口。汇率走强的人民币不会影响对美国--中国最重要的客户的销售，但却会让中国制造商本来就已经利润微薄的产品在其他新兴市场上价格过高。

作为强势货币的后果，中国要保持增长基本上只有三个选项。首先，可以考虑结构改革，这是之前不情愿而且也不太可能在短期内产生效果。其次，中国专家可以可以考虑刺激全国性措施，这招业已越来越不灵了。第三，央行可以谋划元的走弱，正如今年年初所做的那样。

Another round of depreciating the currency,however, is probably the last thing Chinese leaders should be thinking about atthis particular time. As Ma Guangyuan, the economist, told Xinhua, the end ofthe Fed’s bond-buying will surely suck money out of emerging economies. Chinais close to the top of the list of countries bound to be hurt.

In the first months of this year Beijingcrushed speculators betting on a rising yuan by borrowing dollars, the “carrytrade” as it is called. Yet now the general flow of currency is inthe other direction. In Q3, outflows triggered a surprising drop in thecountry’s foreign currency reserves of $100 billion.

不过，此时再发动新一轮的货币贬值或许应该是中国领导人迫不得已去考虑的最后一个选项。正如经济学家马光远对新华社所说的，美联储不再购买债券肯定会使得资金从新兴经济体回流。而中国几乎肯定会是首当其冲的受害者。

在今年的头几个月里，面对升值压力北京通过借入美元打压套息交易投机者。不过现在资金的综合流向发生了逆转。在第三季度，资金外流引发该国的外汇储备出乎意料的下降了1000亿美金。

And there is a lot more money to flow out.Chinese borrowers have gorged on cheap greenbacks in the past half decade, manyof them from Hong Kong. Some believe China’s share of the global carry tradeapproaches $2 trillion, and perhaps half of recent lending to emerging marketshas been to the country’s ravenous borrowers. Worryingly, about four-fifths ofsuch loans to China are for maturities of less than a year. At higherrates—perhaps coming next year—some of these loans may end up looking as bad bets, and banks might be unwilling to roll them over.

还有更大量的资金即将流出。中国的借贷人在过去的6年里吞下了巨量的廉价美金，这些资金有许多是来自香港。有人认为中国占全球套息交易额度达到2万亿美元，可能占最近流向新兴市场的一半左右资金流向了该国饥渴的借贷人。让人忧虑的是，大约五分之四借给中国的贷款其到期日短于一年，在明年利息提高之后，这些借贷可能会以套利失败告终，银行也很可能不会延期。

As Citigroup C -0.11%’sGuilermo Mondino and David Lubin note, the combination of increasing short-termU.S. rates and a “more volatile” yuan could create “a dangerous scenario” of “arather large capital outflow from China.”

The majority of analysts are not especiallyconcerned about “fickle” money, however. “China is somewhat of a unique casegiven the degree of state control over the system, and so we don’t think afinancial crisis is likely,” notes Julian Evans-Pritchard of CapitalEconomics to CNN Money.

花旗集团（Citigroup）的吉列尔莫·蒙迪诺（Guilermo Mondino）和大卫·鲁宾（DavidLubin）指出，短期美国利率上升和“更加不稳定”的人民币这两件事的组合将会导致“一个危险的情况”即“中国相当巨量的资本流出”。

不过大部分的分析家并不是特别的担心“反复无常”的资金。CNN财经负责资本经济的Julian Evans-Pritchard 指出：“中国是个特例，国家对金融系统的控制程度是空前的，因此我们并不认为会发生金融危机。”

It is true Beijing maintains a tightlycontrolled financial system, including a high currency wall, but China’scurrency regulators are usually no match for inventive, deceptive, anddetermined speculators. September’s import and export numbers reveal how porousthe country’s borders are. During that month exports were up an astounding 15.3%.The number, however, was undoubtedly inaccurate as there was a surge of salesto Hong Kong. China reported it exported $37.6 billion to Hong Kong, but HongKong said it imported only $24.1 billion from China.

北京虽然对金融系统控制牢固，有一堵高大的货币长城，但是中国的金融监管者与那些非凡的、狡黠的、意志坚定的投机者无法相提并论。9月份的进出口数据就可以看得出来该国的监管漏洞百出。9月的出口令人震惊的增加了15.3%，这个数字毫无疑问是不准确的，里边包括了对香港出口的激增。中国的报告称其对香港的出口数字是376美元，而香港称自中国的进口额是241美元。

The difference is largely attributed tospeculators sending cash into the People’s Republic, perhaps to take advantageof an anticipated rise in Shanghai stocks when the Shanghai and Hong Kongmarkets are linked. September’s suspicious export number brought to mind thefictitious figures of last spring, a sign of another boutof hot money inflows involving Hong Kong.

差值大部分可以归结于看好沪港通而将资金汇入人民共和国的投机者。九月份可疑的出口数字让我们记起去年春季的虚幻数字，一个热钱类似的经由香港流入的信号。

And on the other side of the ledger,September imports were up 7.0%. Consensus estimates for themonth had imports down 2.7%. The difference? Undoubtedly,hot money flowing out, perhaps disguised by paperwork for goods allegedlycoming from South Korea.

而在另一方面，九月份的出口数字上升了7.0%。舆论认为该月份的进口实际上下降了2.7%。差额哪去了？毫无疑问，是热钱在流出，也许是通过与韩国的虚假货物贸易来掩饰。

The Federal Open Market Committee onWednesday pledged to keep interest rates near zero “for a considerable time.”When speculators want to exit China—either when the Fed raises rates or beforethen—they will take their cash out as they please. Beijing, it is now clear,cannot enforce its currency rules.

联邦公开市场委员会周三保证，将“在相当长的时间内“维持利息接近于0。当美联储加息时或之前，如果投机者想退出中国，他们将会如愿以偿的将资金流出。北京现在应该明白，她是无法控制的。