* / 1 1980 2005 25 2004 1980 37% 2006 1 2002 2004 2005 2007 2009 enhanced-ppp 2005 30% Bosworth 2004 Coudert and Couharde 2005 Frankel 2006 Subramanian * 100871 tangxiang_pku@ 163. com 1 108 2006
2012 10 2010 Coudert and Couharde 2005 Goldstein and Lardy 2006 2005 36% 36% Cline and Williamson 2007 Penn World Table 6. 3 1 = 100 Krugman 2009 Bergsten 2010 2008 2010 20 0. 20 0. 25 / 109
2007 2007 20% 30% 24% 44% 30% 55% 40% 120% 2005 race to the bottom / Process and Production Methods PPMs 2007 90 2010 A B A B A B B A B A A B A B 2010 1 1 110 2010
2012 10 Chan 2003 90 10 1993 40% 2008 1 2005 I II III 2 p 1 p 2 p 3 p 4 4 p w ω w ω I w 1 111
2 p 1 p 2 p n p II ω I I p p w w p 1 p 2 p n I p p III ω ω ω w p ω ω w p ω 1% w p 4% 3% 1% = 4% - 3% w p ω w p ω w p 90 II III I I II III 2% 20% 70% 112
2012 10 1 2 2004 2001 2003 6. 1% 20. 6% 14. 5% 2006 20 0. 20 0. 25 / 0. 38 0. 45 / 2 3 4 4 2004 100% 4-5 8-9 100% 100% 3 3 4 5 2004 7 1 1 2004 6 4 2 3 4 5 2004 5 20 2008 11 11 8 2004 7 16 113
2007 50% 69. 5% 42 2007 53% 1 2008 2008 1 2005 410 1 1 1. 69. 47 2. 91. 7 3. 34. 5 a. 65 b. 71. 03 c. 14. 53 4. d. 11. 2 e. 54. 64 2008 216. 4 412. 07 / 1 114 2007 5 19
2012 10 2005 70 2005 37% 80% 70 17 10 7 30 50% 25% 30% 2000 2006 17. 5% 21% 19. 25% 3. 5% 15. 75% 48% 50 2004 12 40% 1 1 223 / 2005 280 / Ax + y = x A i j a ij j i x y 1 1 A x y 1 1 2009 12 8 500 2005 2 21 2005 2 21 115
j p 1 p 2 p n l j t j d j r j j j p j = a 1j p 1 + a 2j p 2 + + a nj p n + l j + t j + d j + r j 2 w q t q d q r t j d j r j 2 p j = a 1j p 1 + a 2j p 2 + + a nj p n + l j w + t j q t + d j q d + r j q r 3 p 1 p 2 p n w q t q d q r 1 3 1 = a 1j + a 2j + + a nj + l j + t j + d j + r j 4 3 p = A'p + lw + tq t + dq d + rq r 5 A A l t d r I p = I - A' -1 lw + tq t + dq d + rq r 6 2007 135 6 135 50% 1 2007 7 A 134 6 p = I - A' -1 lw + tq t + dq d + rq r + gq g 7 g A 7 q g 1 134 97 2 7 A 96 l 96 3 2007 68% w q t q d q r q g 68% 0. 5% I w q t q d q r q g 7 2 2. 56% 76% 2007 1 2 3 116 2007 47% 2011 8 55. 2% 37
2012 10 y 2. 55% 1. 9% 11% 1. 3% II w q t q d q r ω t d r r r 7 2 w q t q d q r 7. 3% 82% I II 6. 8% 6 2005 1 2 57% 1 2 57% 114% 2 1 2 I II 9. 7% 25. 4% 2 4. 5% 7. 2% I II 18. 6% 37. 3% III ω ω ω ω 1 ω ω 2% 2 w p 6% 7% 4% 5% 24% 44% 20% 30% 2002 123 1997 124 3 2002 2 2 5% 10% A 105% 110% 3 1 2 2007 2007 2002 1997 2002-2007 2001 117
2 2007 135 1 1 1 2% 1. 0256 1. 0731 1. 0333 1. 0968 1. 0611 1. 1864 1. 2368 1 1. 0731 1 1. 0968 1 1. 1864 1. 2615 0. 9751 1 0. 9678 1 0. 9424 1 1. 0200. 0293 1. 0796 1. 7227 1. 8296 1. 7923 2. 0054 2. 0913 1. 7568 1. 8239 1. 0100 1. 0587 1. 7796 1. 9534 2. 0234 1. 0144 1. 0626 1. 1255 1. 1958 1. 1470 1. 2848 1. 3402 1. 0196 1. 0601 1. 0739 1. 1308 1. 0979 1. 2099 1. 2550 1. 0255 1. 0176 1. 0447 1. 0185 1. 1693 1. 1920 1. 1106 1. 0358 1. 1522 1. 0131 1. 0397 1. 0542 2 2 1. 0801 1. 2540 1. 1112 1. 3730 1. 4411 1 1. 2540 1 1. 3730 1. 4700 0. 9258 1 0. 8999 1 1. 0200 2. 7400 3. 1755 2. 8685 3. 5348 3. 7080 1. 0241 1. 1540 1. 8118 2. 1667 2. 2590 1. 3021 1. 5136 1. 3341 1. 6514 1. 7339 1. 1779 1. 3429 1. 2083 1. 4570 1. 5217 1. 0425 1. 0717 1. 4077 1. 4366 1. 0862 1. 2109 1. 0955 1. 1121 3 1997 2002 2007 1 2002 1997 2007 1 1 5% 2% 2% 2% 1. 052 1. 225 1. 311 1. 051 1. 259 1. 372 1. 105 1. 350 1. 416 1 1. 225 1. 338 1 1. 259 1. 399 1 1. 350 1. 444 0. 950 1 1. 020 0. 952 1 1. 020 0. 905 1 1. 020 1. 043 1. 034 1. 089 1. 071 1. 071 1. 243 1. 125 1. 112 1. 201 1. 062 1. 073 1. 175 2 2 10% 1. 077 1. 359 1. 466 1. 082 1. 472 1. 628 1. 235 2. 050 2. 202 1 1. 359 1. 495 1 1. 472 1. 660 1 2. 050 2. 246 0. 928 1 1. 020 0. 925 1 1. 020 0. 809 1 1. 020 1. 059 1. 049 1. 198 1. 132 1. 137 1. 560 1. 159 1. 151 1. 455 1. 109 1. 135 1. 391 118
2012 10 40% 120% 30% 55% 2005 30% 40% 20% 3 2007 7% 2007 19% 44% 15% 21% 5% 11% 1 2005 2004 12 2004 11 2007 3 2006 6 2006 1979 2005 2 2008 2010 SSRN http / / papers. ssrn. com / sol3 / papers. cfm abstract_id = 1523083 2010 4 13 1 119
2009-4 2002 2008 12 2008 6 2007 http / / www. caogen. com / blog / Infor _ detail. aspx ID = 18&articleId = 282 2011 2 26 Bergsten C. Fred. 2010 Correcting the Chinese Exchange Rate An Action Plan Testimony before the Committee on Ways and Means US House of Representatives March 24. Bosworth Barry 2004 Valuing the Renminbi Paper presented to the Tokyo Club Research Meeting February. Chan Anita 2003 A Race to the Bottom Globalization and China s Labour Standards China Perspectives 46 41 49. Cline William R. and John Williamson 2007 Estimates of the Equilibrium Exchange Rate of the Renminbi Is There a Consensus and If Not Why Not Paper presented at the Conference on China s Exchange Rate Policy Peterson Institute Washington DC October. Coudert V. and C. Couharde 2005 Real Equilibrium Exchange Rate in China CEPII Working Paper No. 2005-01 Paris. Frankel Jeffrey 2006 On the Yuan The Choice between Adjustment under a Fixed Exchange Rate and Adjustment under a Flexible Rate CESifo Economic Studies. Goldstein Morris and Nicholas Lardy 2006 China s Exchange Rate Policy Dilemma American Economic Review 96 2 May 422 426. Krugman Paul 2009 The Chinese Disconnect New York Times October 22. Subramanian Arvind 2010 New PPP-based Estimates of Renminbi Undervaluation and Policy Implications Policy Brief 10 8 Washington Peterson Institute. The RMB Undervaluation Puzzle An Input-Output Analysis Tang Xiang School of Economics Peking University Abstract The RMB undervaluation puzzle refers to two related facts 1 that the RMB real exchange rate has been depreciating along with China s strong economic growth 2 that most Western researchers agree that the RMB is seriously undervalued in recent years. We propose that this puzzle is mainly caused by an inter-regional race to the bottom in China which reduces average input usage and labor cost thus seriously depressing the general price and wage level through three types of price multiplier effects. We extend the standard input-output model to simulate the price-level effect of racing to the bottom in two key sectors road transportation and coal mining using actual input-output data. The results show that quantitatively our model can fully explain the RMB undervaluation puzzle. The implication is that in order for the RMB real exchange rate to reach and remain at a proper level inter-regional race to the bottom in China must be effectively tackled which entails a radical overhaul of China s economic system and the transition of its development model. Key Words RMB Real Exchange Rate Race to the Bottom Input-output Model JEL Classification F31 L51 D57 120