How much do you think it should be depreciated?" asked Dean Zhu.

Looking at the glint of hope in Dean Zhu's eyes, Fang Chen gritted his teeth fiercely and said: "In one step, the exchange rate of Huaxia will be devalued to the actual value of Huaxia currency, only in this way can we better promote our enterprises to export products, open up sales, obtain abundant funds to develop the economy, and plug in the wings of economic development. ”

"I think it will have to be depreciated by at least 40% or more......"

Listening to Fang Chen's words, Dean Zhu looked at the rockery in the distance through the window, and sighed silently in his heart, it seems that the exchange rate of Huaxia is indeed the time for a big depreciation.

He was aware of the problem of the inflated exchange rate of China a long time ago, and he also promoted the depreciation of the exchange rate of China many times in the position of the Economic Commission, but he has not been able to make up his mind and depreciate the exchange rate of China to its actual value, as Fang Chen said.

However, he agrees with Fang Chen's conclusion that the so-called depreciation is more than 40%.

Deep down in his heart, his judgment of the inflated degree of the Huaxia exchange rate was similar to Fang Chen's, and even more radical, believing that it was appropriate to depreciate by half.

But this is really too bold, and the depreciation of the exchange rate to such an extent is equivalent to saying that the paper wealth of the people of the whole country in foreign exchange has shrunk by half in an instant.

And after so much depreciation, in a foreign exchange-anchored monetary policy like Huaxia, does it mean that a large amount of money needs to be printed to enter the market?

Printing large amounts of money will undoubtedly cause inflation.

This is extremely unfavorable to China's current policy of low wages and high state subsidies, and it can even be said that it is a complete overthrow of this economic policy that has been in place for more than 40 years.

Under the large amount of inflation, it is necessary to let the income of ordinary people rise by a large margin, otherwise there will be chaos.

This is the reason why these people know that the exchange rate of China is inflated, but they are not determined to depreciate it in place.

But the more he thought about it, the more Dean Zhu was biased towards Fang Chen's opinion, and gradually made a decision.

Of course, this kind of thing can't be completely just listened to Fang Chen, he has to hold a meeting with the people below to study, and after coming to a specific conclusion, he can report to the cabinet and the elders, and even Taizong, so as to decide how much and when the Huaxia exchange rate will depreciate.

"Regarding the depreciation of the exchange rate, I will discuss it carefully at a meeting, but when it comes to concrete implementation, it should be after next year, and we must always pass the price barrier. Dean Zhu smiled bitterly.

As soon as he heard the words "price break", Fang Chen couldn't help but gasp and looked at Dean Zhu with sympathy.

To be honest, when the exchange rate depreciation and the price break came together, Dean Zhu himself felt a headache.

Because China has always been a planned economy before, and now it wants to change it to a market economy, and the most difficult thing is the price reform.

Although since the early days of reform and opening up, the country has implemented a dual-track price system, allowing unplanned means of production to be freely bought and sold at market prices.

However, how to thoroughly merge the two and transform the planned economy into a market economy is still a severe test for China, and this test is called the price barrier.

If you are not careful, it will bring a huge crisis to the country.

In 1948, the Federal Republic of Germany liberalized prices, and within a month the price of food tripled, and there were large-scale mass demonstrations.

In 1980, Poland liberalized food prices and rose prices, resulting in a general strike of workers in Gdansk, the forced resignation of Gelek, and the rise of Solidarity.

Why is there always a large price increase during the transition from controlled prices to free prices?

This is because, during the period of price control, there is a large amount of hidden inflation lurking. This type of inflation generally does not manifest itself as an increase in prices. Once prices are liberalized, these implicit inflations will be released, and prices will rise sharply.

In 1988, although there were still different opinions from the top, in the end it was Taizong who made a decision and resolutely decided to speed up the price breakthrough, and the long-term pain was better than the short-term pain.

In April, the government affairs hall issued a notice that the price subsidies for pork, fresh eggs, sugar, and vegetables were changed from hidden subsidies to open subsidies.

The subsidy for each employee in the municipality is 10 yuan, and the subsidy in other cities is less.

As a result, the price of pork has increased by 50%-60% and the price of fresh vegetables by 31.7%.

In addition, with the opening of price control, the prices of famous cigarettes and liquor, coal, crude oil, electricity, cotton, color televisions, and so on have increased by a relatively large margin.

The rising price momentum has already created psychological expectations among the masses, and by August, there was a shocking panic buying behavior in various places.

From straw paper to batteries, from clothing to shoes and hats, from color TVs to refrigerators, panicked residents are eager to exchange all their banknotes for things they can see and touch, and to buy everything they need for generations.

Someone in Jiangcheng bought 200 kilograms of salt, a citizen in Jinling bought 500 boxes of matches at once, and a lady in Yangcheng carried back 10 boxes of laundry detergent.

The chaotic order made the store afraid to open the door, and could only pay with one hand and deliver the goods in one hand.

And outside the crack in the door, there was a long line. In the rush to buy the queue, there was crowding, name-calling, and in some places there were small riots.

Under the sweep of the rush to buy, the savings of domestic residents, which totaled only 400 billion yuan, decreased by 30 billion yuan in just two or three months.

We have no choice but to declare that we have failed to break through the price barrier, not to adjust prices in the next six months, to start savings for value preservation, so that the interest on deposits for more than three years will not be lower than or even slightly higher than the rate of price increases, resolutely reduce the scale of capital construction, control the issuance of currency, do a good job in the purchase of grain, cotton, and oil, ensure market supply, and rectify market order.

After these measures were implemented one by one, the rush to buy caused by the price barrier finally subsided.

However, in recent years, the state has opened up a lot of means of production that were originally under economic control, especially after Taizong's southern tour, the relationship between supply and demand and the political environment have become relaxed, and the price reform, which has entered the difficult situation since 1988, suddenly accelerated in 1992.

By the end of 1991, there were 737 prices for means of production and transportation managed by the State Price Bureau and the relevant departments of the State Council, and 648 were liberalized in 1992.

At the same time, the purchase prices of agricultural products and other industrial products have also been liberalized in a big way, and at the end of 1991, there were 60 kinds of agricultural products under the management of the state, and in 1992 there were 50 kinds of agricultural products.

At the end of the year, 844 counties and cities across the country will liberalize grain prices and abolish the grain capital and grain stamp system that has been in place for decades.

For a long time, the grain sold by state-run grain stores to urban workers was lower than the price purchased by the state from the peasants, and the difference was subsidized by the government.

In 1991, more than 40 billion yuan was subsidized for grain prices. Among them, the city subsidy is more than 20 billion yuan, and the average subsidy per citizen is 130-150 yuan, and with this money, you can buy 100 kilograms of rice, which is the ration for nearly a year.

The theoretical circles have already calculated this account and suggested that grain prices should be relaxed.

But the risk of liberalizing food prices is simply too great.

But at this time, Dean Zhu's eyes became brighter and brighter, as if there was a light blooming from it!

In any case, this step will have to be taken sooner or later, and if it is not taken, there will be no vitality in domestic economic development, and a real market economy will not be realized.

"Why don't you speak slowly?" Fang Chen asked cautiously and timidly.

He can't care about it now, what he just said is better to actively depreciate than to passively, and it is better to depreciate now than to depreciate in the future.

In the face of such a big crisis and big trouble, it is nothing to slap yourself in the face.

Although the price barrier in the previous life was successful, it is undeniable that the price barrier will lead to a certain inflation, and the depreciation of the exchange rate will also lead to inflation......

"I can't wait!" Dean Zhu said in a deep voice.

But when he turned his head and saw Fang Chen's timid appearance, Dean Zhu couldn't help laughing, "It turns out that there are still things you are afraid of." ”

Listening to Fang Chen's rhetoric about sniping at the pound at every turn and depreciating the Chinese exchange rate just now, and then looking at Fang Chen's now, there is really a strong sense of dramatic contrast.

"In addition, you don't have to worry, I will not carry out drastic economic reforms like Russia, I didn't just say, first the price barrier, if the breakthrough is successful, the market inflation is not large, then continue the monetary reform. If there is a lot of inflation in the market, then find a way to get rid of the inflation, and then carry out monetary reform. Dean Zhu waved his hand and said proudly.

Seeing this, Fang Chen was silent for a moment, he naturally knew how much pressure Dean Zhu would have to bear if he wanted to do this.

But perhaps it is these Chinese backbones who dare to take risks, have the courage to dedicate, swallow mountains and rivers, and dare to change the sun and the moon to a new face, that have supported Huaxia to the present, and it has become more and more vibrant and prosperous.

"In addition to the depreciation of the exchange rate, my next suggestion to you is to join the General Agreement on Tariffs and Trade as soon as possible, and I judge that the next eight years will be the best opportunity for China to join the General Agreement on Tariffs and Trade, and I will also try my best to use my personal connections to promote the success of China's resumption of GATT. ”

Fang Chen was completely out of the way now, not only giving Dean Zhu advice, but even planning to use his personal relationship.

In the face of the huge pressure generated by the price barrier and the depreciation of the exchange rate, Dean Zhu can face the pressure head-on and make a decision without fear of life and death.

The General Agreement on Tariffs and Trade (GATT) is the predecessor of the WTO and the WTO.

In the past life, if we wanted to select the most important thing to promote China's economic development, it would be to join the WTO.