李迅雷：高估的美元在走弱，人民币该如何应对

Core Viewpoint - The article argues that the common belief that the renminbi (RMB) will depreciate significantly upon achieving free convertibility is misguided. Instead, it suggests that the RMB is undervalued and should be accelerated in its internationalization process, especially in the context of a weakening US dollar [1]. Group 1: Currency Valuation - The concept of Purchasing Power Parity (PPP) is introduced as a measure of currency valuation, comparing market exchange rates with PPP rates to assess actual purchasing power [2]. - A table shows that most currencies, including the RMB, are undervalued compared to their PPP rates, indicating a significant discrepancy between market rates and actual value [3]. - The article highlights that developed countries' currencies are closer to their PPP rates, while developing countries, including China, show a larger gap, suggesting a general undervaluation of their currencies [3]. Group 2: Factors Contributing to RMB Undervaluation - The article identifies weak liquidity as a primary reason for the RMB's long-term undervaluation, drawing parallels with historical examples of currency valuation based on circulation and liquidity [6][7]. - It notes that the RMB's market share in international payments is low, at only 2.89%, which is disproportionate to China's economic standing as the second-largest economy [8][9]. - The geographical concentration of RMB payments, primarily in Hong Kong, limits its global usage, further contributing to its undervaluation [12]. Group 3: Global Currency Dynamics - The article discusses the low percentage of global reserves held in RMB, which peaked at approximately $337.26 billion in 2021 but has since declined to about $249.68 billion, representing only 2.2% of global reserves [12][15]. - It contrasts the RMB's status with the US dollar, which dominates global reserves, holding around 60% of the total, indicating a significant disparity in global currency trust and usage [15]. - The article emphasizes that the RMB's low liquidity, limited circulation area, and small global holding scale explain the substantial gap between its market exchange rate and PPP [15]. Group 4: Future of RMB Internationalization - The article posits that accelerating the RMB's internationalization could enhance its status as a global reserve currency, despite concerns about potential capital outflows upon liberalization [33][37]. - It suggests that increasing the RMB's global demand through financial market openness and improving its credit rating could help balance its supply and demand, ultimately leading to a more favorable exchange rate [37][38]. - The article concludes that reforming the RMB's exchange rate system is essential to align with China's economic development and address structural issues [38].