Renminbi to remain stable as China's development model shifts, experts say

The central parity rate of the renminbi was set at 7.0796 against the US dollar in the interbank foreign exchange market on Wednesday, a 30-basis-point appreciation from Tuesday's 7.0826, which had already strengthened 21 pips the previous day.

Experts expect the renminbi's central parity rate against the dollar to remain relatively strong in the short term. They said the RMB is likely to remain generally stable, continuing its pattern of moving inversely to the US dollar with relatively limited fluctuations.

The spot exchange rate of the RMB against the US dollar rose to as high as 7.0850 on Tuesday, while the offshore RMB also broke through the 7.09 level, hitting a 13-month high in both the onshore and offshore markets.

Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, said the renminbi's central parity rate has recently continued to adjust toward a stronger position. This may be related to the stronger-than-expected domestic economic performance since the beginning of the year and the significant decline in the US dollar. Although the renminbi has appreciated against the dollar, it has not fully matched the extent of the dollar's weakness. Additionally, China's exports have exceeded expectations this year while domestic capital markets have strengthened since July, which has boosted settlement demand and lifted market confidence in the renminbi, Wang said.

Sheng Songcheng, adjunct professor of economics and finance at China Europe International Business School and president of the China Chief Economist Forum Research Institute, said on Friday that there is a solid foundation for the renminbi to appreciate steadily over the medium to long term. This outlook is supported by multiple factors, including China's entry into a new stage of "two-way investment", the accelerated diversification of trading partners, and rising labor productivity.

Sheng emphasized that China is shifting from a development model focused mainly on bringing in foreign investment to one that balances both "bringing in" and "going global". Against the backdrop of expanding two-way investment, maintaining moderate stability in the renminbi, or even allowing it to appreciate steadily over the medium to long term, will provide support for Chinese companies' overseas expansion, the internationalization of the renminbi, and the development of global trade and economic relations.

He stressed that China remains committed to maintaining the stability of the renminbi at a reasonable and balanced level, avoiding excessive rapid or sharp appreciation that could temporarily hurt exports, while allowing the market to play a decisive role in exchange-rate formation and balancing both internal and external stability.