Luo Zhiheng: The European Energy Crisis brings three pressures such as exchange rates to China

Zhongxin Jingwei September 19th. Question: The European Energy Crisis has brought three stress such as exchange rates to China

Author Luo Zhiheng Chief Economist and Dean of the Institute of Research

The European energy crisis is difficult to return, which is essentially the product of imbalance in internal energy structure and external geopolitical games. It cannot be fundamentally reversed in the short term. Recently, Europe has introduced four major measures to restrict prices, levy huge profits, reduction in demand, and increase supply.

The economic recession and financial risks caused by the European energy crisis will also have a spillover effect on China, causing three major adverse effects of external demand, depreciation of exchange rates, and asset prices.

First, China's exports are facing structural pressure. In the global high inflation environment, benefiting from domestic supply and stability policy, the advantages of China's production cost support the toughness of exports. The production of energy -intensive products in European energy crisis has driven the growth of Chinese chemical intermediate products and electricity equipment orders. In the short term, the limited production of EU production has driven the demand for Chinese industrial products, and the export of middle products such as chemical, metal products, and glass that facilitate high energy consumption; in the long run, the European energy crisis may cause long -term economic recession, economic demand has slowed down. Great downward pressure on consumer goods and capital products with higher proportion, impacting China's exports.

Second, the depreciation of the European currency will cause the US dollar index to rise again, and the renminbi will still have a depreciation pressure. Under the impact of the energy crisis, the expectations of the European and American economic cycles and currency cycles have continued to increase. The euro and pounds are the first and third largest heavy currencies in the US dollar index. The weakening of European currencies has promoted the continued strengthening of the US dollar index. The depreciation of the exchange rate of emerging markets and the intensification of financial risks, and the RMB exchange rate has experienced two rapid depreciation during the year. In the future, the RMB exchange rate trend depends on the three aspects: one is the strength of the US dollar index, the other is the domestic economic recovery situation, and the third is the policy intervention that maintains the stability of exchange rates.

Third, the export and exchange rate pressures make the capital market expect to be sluggish, and the price of domestic equity assets still has a downlink risk. First, the European energy crisis increases the risk of global stagnation in a macro. The slowdown in exports and domestic demand has weakened the fundamentals.

The European Energy Crisis revealed that we must coordinate development and safety, and carry out "double carbon" operations. In the context of the unstable global energy system, China should coordinate development and safety, do a good job of primary products to maintain stable prices, and ensure the safety of energy supply. In 2022, extreme weather such as high temperature in the summer in China brought challenges to power production and operation. Policy emergency measures such as "letting electricity in the people" avoided the impact of people's livelihood, but it still caused certain restrictions on domestic industrial production and supply chain.

First, the development of energy trade with me and strengthen natural gas energy reserves. Under the background of the European Energy Crisis, global natural gas imports are more intense. To maintain economic and trade relations with LPG exporting countries, sign large -scale long -term procurement agreements, at the same time, the development of economic and trade relations with Russia, properly expand the import of natural gas to Russia. Build a Sino -Russian natural gas pipeline. In addition, China's natural gas consumption has risen year by year, but natural gas reserves are slightly insufficient. In the future, it still needs to continue to improve the ability of natural gas reserves and regulation.

Second, the "double carbon" operation and energy consumption dual control are carried out in a real thing. China's industry and energy structure determines that China ’s carbon peak carbon neutrality is a relatively long process. It cannot be achieved in one battle. It cannot be used for short -term and long -term targets.

Third, the development and safety of the development of new energy need to take into account energy security. It is necessary to dialectically treat the relationship between development and energy consumption, and reduce energy consumption through technological innovation in development. (Zhongxin Jingwei APP)

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