Influenced jointly by internal dynamics of Chineseeconomy and external pressures, RMB hasappreciated constantly in recent years. Theinternal influences mainly include China's pricelevel, the situations of inflation and economicgrowth, as well as interest rate level, while the external influences mainly come from thepressures exerted by developed countries, Japan and America in particular. The appreciationof RMB will not only increase its purchasing power and expand domestic consumers' demandsfor imported goods, but also alleviate the cost burden of imported energies and raw materials.However, it may affect the stability of the domestic financial market and raise the cost ofexported products, which would reduce the competitive power of Chinese products in theglobal market.
