Compared with the Sino-US Trade War, Tungsten Export Should Pay More Attention to Exchange Rate

With US President Trump signing a presidential memorandum against China at the White House on March 22, announcing that, based on the results of the 301 survey, high tariffs will be imposed on goods imported from China on a large scale, restrictions on Chinese-funded investment in the United States and a series of actions taken against China in the WTO, the outpost war of Sino-US trade war has begun.

For Trump's trade war, enterprises engaged in tungsten products export can take a break, but more attention should be paid to the RMB exchange rate trend against the US dollar, because the currency war between China and the United States is about to begin, and China's tungsten supply to the world is mostly settled in US dollars, exchange rate fluctuations may be the biggest factor affecting the tungsten products export industry.

On March 26, China officially opened crude oil futures, which is a major strategic counterattack, which directly shakes the dominance of the dollar in the world currency. This time, China will actively strive for the right to price Crude oil. Now Saudi Arabia, Iraq, Russia, Iran, Venezuela and other major oil exporters all want to enter the Chinese market and expand their export share. Naturally, they want to participate in China's crude oil futures. It is a rare and excellent opportunity to increase our voice in the international trade of crude oil.

In the past, Americans have been using the US dollar to grab the wool of the world. They have been making waves in the world for the hegemony of the US dollar. They have repeatedly invaded other sovereign countries. It is said that in 2003, the US invaded Iraq with unnecessary weapons of mass destruction and overwhelmed Saddam Hussein because Saddam Hussein used the euro to settle oil. In addition, in order to combat the euro, the United States also used investment banks to trigger the Greek debt crisis, support Britain's exit from Europe and so on, resulting in the breakdown of the euro from the inside, and no longer be able to fight against the dollar.

This time, the RMB will directly face the challenge of the US dollar. RMB crude oil futures are only the first step. With the Fed's interest rate increase, more capital will be attracted to return. Correspondingly, if the RMB depreciates sharply, it is likely to trigger a large-scale capital outflow. Therefore, the central bank's interest rate increase channel has also been opened.

Some experts also said that China would not engage in trade wars by devaluing the RMB or selling US debt. Indeed, in the short run, the appreciation of the RMB will have an impact on many export enterprises. However, the Sino-US trade war is both a challenge and an opportunity. The trade war will force China to continue deepening reform and opening up and accelerate the transformation and upgrading of industrial structure. In the future, our country's policy makers will still respond to the trade war with the policy of expanding domestic demand.

Our tungsten export enterprises should pay more attention to the trend of exchange rate, because the monetary confrontation between China and the United States has moved onto the stage. We can no longer confine ourselves to the trade surplus and deficit between China and the United States. The bigger chess game is the internationalization of RMB. To challenge the hegemony of the US dollar and become the world currency, this process is very difficult. It is inevitable to maintain the stability and appreciation of the RMB. It may sacrifice some of the existing export trade advantage industries, but only if we give up can we get it. This is also the only way for the rise of the Chinese nation. (China Tungsten Online: Weiping)

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