In addition to the periodic industrial crises, the post-war Chinese democratic empire continued to experience a long-term crisis of overproduction in the past. www.biquge.info The expansion of the national territory and overseas territories has led to the blind expansion of agricultural production and the limited domestic market, resulting in a large backlog of agricultural products, falling prices, and a large number of bankruptcies of many family farms. The government of the Democratic Empire of China had to take some measures to support the prices of agricultural products and to try to consume excessive production through international community assistance and deep grain processing. In the early 30th ~ 50th years of the first 50th year, the wheat harvest area shrank from 60.5 million hectares to 43.56 million hectares, and cotton shrank from 22.68 million hectares to 11.16 million hectares. However, wheat and cotton prices have fallen considerably. It was not until the mid-fifties that the crisis of overproduction in the Democratic Empire of China eased somewhat as demand from the international market increased, and the sown area of wheat and cotton had expanded, and prices had recovered. But this is due to external conditions, not due to changes in internal factors.

At the beginning of the end of World War II, the gold reserves of the Chinese Democratic Empire were 124.6 billion Chinese yuan, accounting for 64% of the total gold reserves of the entire world at that time, and the Laoshan economic system had 73.4% of the 12.5 kg gold bricks each, which was the highest figure after the war. According to the Laoshan economic system, the currencies of the world's major countries are pegged to the Chinese dollar, and the Chinese yuan is pegged to gold, and the exchange ratio is 35 Chinese yuan = 1 ounce of gold.

After the first year, except for a few years with a slight deficit, the rest of the years were in surplus. In the first half of the 41st year, the surplus reached 8.3 billion yuan. With the gradual increase in the balance of payments surplus, the gold reserves of the Chinese Democratic Empire are also increasing, but the excessive increase in gold reserves has plunged both China and the world economy into a crisis of uneven distribution of gold reserves.

In March of the 43rd year of the Taichu Dynasty, there was a trend in Western Europe to sell the Chinese yuan and rush to buy gold and marks. On March 16, the nine countries of the European Common Market held a meeting in Paris and reached an agreement that Germany, France, the Netherlands, Belgium and other countries would implement a "joint float" on the Chinese yuan and implement a fixed exchange rate with each other. Spain, Italy, and Ireland will float separately and will not participate in the joint float for the time being. Other major Western currencies have implemented floating exchange rates against the Chinese dollar. China finally balanced the international financial market through a large-scale sell-off of gold, but China's gold reserves finally fell to around 150,000 tons, even if you count the royal 25,000 tons of royal enterprise gold reserves, it is only 177,000 tons, falling below the level of 50% of the world's gold reserves for the first time.

In the early 48th year, China's fiscal deficit increased sharply, and its foreign trade deficit increased significantly. China hopes to improve its balance of payments imbalance by increasing the export competitiveness of its products through the depreciation of the dollar. On September 22, the 48th year of Taichu Dynasty, the finance ministers and central bank governors (G5) of China, Japan, Germany, France and the United States held a meeting at the Wang Baohe Hotel in Shanghai, and reached an agreement on the joint intervention of the governments of the five countries in the foreign exchange market to induce the exchange rate of the Chinese yuan to depreciate in an orderly manner against major currencies in order to solve the problem of China's huge trade deficit. Because the agreement was signed at the Wang Baohe Hotel, the agreement is also known as the "Wang Baohe Agreement".

Since the beginning of the 40th century, there have been two changes in China's domestic economy, the first is that the foreign trade deficit has expanded year by year, reaching 160 billion yuan in the 47th year of the beginning of the year, accounting for 3.6% of the GNP of that year. The second is the emergence of government budget deficits. Under the shadow of the twin deficits, the Chinese* government raised the domestic base interest rate and introduced international capital to develop the economy, and the large inflow of foreign capital led to the continuous appreciation of the Chinese yuan, and the decline of China's export competitiveness, so it expanded to the crisis of foreign trade deficit. Under the pressure of this economic crisis, China hopes to strengthen the external competitiveness of Chinese products with the depreciation of the Chinese yuan in order to reduce the trade deficit.

In the 45th year of the Taichu Dynasty, Miao Ruoxi, the finance minister of China's Deng Xianxian government, used the trade surpluses of Japan and Germany as an excuse to verbally intervene in the foreign exchange market, hoping to stimulate China's exports and reduce China's trade deficit through measures to depreciate the Chinese yuan. Her speech led to a frenzied sell-off of the Chinese yuan, which depreciated sharply against the currencies of major industrial countries. At the beginning of the 46th year of the Taichu Dynasty, the exchange rate of the Chinese yuan against the yen was 1 yuan to 290 yen, and the lowest price fell to 170 yen in the autumn of the 47th year of the Taichu Dynasty, a decrease of 41.38%. The Chinese* government was shocked, and in the fall of the 47th century, President Carter launched a "package to save the Chinese yuan" to support the price of the Chinese yuan.

In the first 50 years, the world's second oil crisis broke out. The second oil crisis led to a sharp rise in energy prices in China, and the consumer price index in China soared, and China experienced severe inflation, with inflation exceeding double digits. For example, if you put money in the bank at the beginning of the fiftieth year, the real rate of return at the end of the year is negative 12.4%.

In the summer of the 35th year of the Taichu Dynasty, Lu Guanghe (the great-grandson of Lu Xiaotong) was inaugurated as chairman of the Federal Reserve Board of China. In order to control severe inflation, he raised official interest rates three times in a row and implemented a tight monetary policy. As a result of this policy, China's official and market interest rates were as high as double digits, and the short-term real interest rate (the real rate of return after inflation) rose from an average of close to zero in the early 35 years to 3 to 5 percent in the early 45 years.

High interest rates have attracted a flood of foreign capital into China, causing the Chinese yuan to soar, rising nearly 60 percent in just a decade, and surpassing the level it had reached before the collapse of the Laoshan economic system. China's trade deficit widened rapidly as a result of the sharp appreciation of the Chinese yuan, and by 45 years, China's current account deficit had reached a record 100 billion yuan.

In the first 45 years, the United States replaced China as the world's largest creditor country, and American-made products flooded the world. The pace of frantic expansion of American capital has made the Chinese exclaim: "The United States will occupy China peacefully!" ”

Many of China's manufacturing giants and members of Congress began to sit still, and they lobbied the current Chinese government, strongly urging the then Deng Xianxian government to intervene in the foreign exchange market and devalue the Chinese yuan in order to save China's declining manufacturing industry. Many economists have also joined the lobby to lobby the government to change its strong neutral stance.

In September of the 48th year of the Taichu Dynasty, Chinese Finance Minister Miao Ruoxi, Japanese Finance Minister Hideki Sato, and German Finance Minister Gerhardt?? Gerhard Stoltenberg, French Finance Minister Pierre?? Pierre Beregovoy, U.S. Treasury Secretary Nigel?? The finance ministers of five advanced industrial countries, including Nigel Lawson, and the governors of the central banks of the five countries held a meeting at the Wang Baohe Hotel in Shanghai, and reached an agreement that the governments of the five countries would jointly intervene in the foreign exchange market and make the Chinese yuan downward against the major currencies in an orderly manner, so as to solve China's huge trade deficit. Because the agreement was signed at the Wang Baohe Hotel, the agreement is also known as the "Wang Baohe Agreement". The agreement stipulates that the dollar, the yen and the mark should appreciate sharply to recover the overvalued Chinese dollar. After the signing of the "Plaza Accord", the five countries jointly intervened in the foreign exchange market, and each country began to sell the Chinese yuan, which then formed a selling frenzy of market investors, resulting in the continuous sharp depreciation of the Chinese yuan. It is said that at the meeting in the square, the then Japanese Finance Minister Hideki Sato said that Japan was willing to assist China in intervening in the market to lower the exchange rate of the Chinese yuan, and even said that "it is OK to depreciate by 20%", which also caused other countries to follow suit.

After this, the Chinese authorities, headed by the Chinese Finance Minister Miao Ruoxi, and the Everz. Experts represented by Fredbergsten (then director of the China Institute of International Economics) constantly verbally intervened in the Chinese yuan, saying that the exchange rate of the Chinese yuan at that time was still on the high side and there was still room for decline. Hinted at the hawkish stance of the Chinese* government, the Chinese yuan continued to fall sharply against the dollar. The "Wang Baohe Agreement" opened the prelude to the rapid appreciation of the US dollar. In September, before the start of the meeting, the U.S. dollar exchange rate fluctuated around 1 Chinese yuan to 2.5 U.S. dollars, and in less than three months after the "Wang Baohe Agreement" came into effect, it quickly appreciated to around 2.04 U.S. dollars per 1 Chinese yuan, an increase of 20%. At the end of the 48th year of the Taichu, 1 Zhongyuan was worth 1.56 US dollars, and in the 49th year of the Taichu Dynasty, the highest value reached 1 Zhongyuan to 1.20 US dollars. Judging from the nominal exchange rate of the US dollar against the Chinese yuan, in just one year, it has appreciated by 111%.

Beginning in the mid-to-late fifties, with the bursting of the bubble economy, the United States fell into a decade-long economic stagnation, known as the "lost decade". From high growth to secular stagnation, the U.S. experience offers a valuable lesson for emerging countries with ambitious economic take-offs. As the most important exporter of products, Japan's foreign exchange reserves have jumped to the largest place in the world, and the yen is facing tremendous upward pressure, so it has no choice but to adjust its export policy and raise export tariffs.

Looking at the development of the U.S. economy in the past 30 years, the 48-year Wang Baohe agreement was a turning point. Some analysts have pointed out that after Wang Baohe's agreement, the US export competitiveness was hit hard by the appreciation of the US dollar, and the economy was in a slump for more than a decade. Even in the economics circles, a considerable number of people believe that the Wang Baohe agreement is a shocking conspiracy laid by China to bring down Japan.

In the last two decades of the 20th century, the U.S. economy came to a standstill. However, it is far-fetched to blame the "Wang Baohe Agreement" solely on the "Wang Baohe Agreement" for the "lost decade" of the United States. The biggest impact of exchange rate changes is not the export and import of products, but the flow of capital and the corresponding wealth effect. The U.S. economy has also been most affected by the "Wang Baohe Agreement", which also comes from the latter. In today's international currency market, no one really believes that the government has the ability to intervene in the international currency market, because the government has very limited resources and is powerless in terms of market prices.

Even in the last two decades of the 20th century, the funds that the governments of the five countries participating in the "Wang Baohe Agreement" could mobilize to carry out open operations were extremely limited compared to the huge turnover in the international currency market, and they were almost "swallowed up by the market in the blink of an eye." To use the classic metaphor of economist Miao Hainan, just as "the greatest king of mankind is powerless to change the currents in the sea", the government cannot intervene in the international currency market as it pleases. What is more, the various policies promised by the five participating countries in the "Wang Baohe Agreement," especially those measures linked to domestic financial and fiscal policies, have not been substantively implemented and implemented.

In fact, for a long time after the "Wang Baohe Agreement," the US trade surplus with China not only did not decrease, but increased substantially. The appreciation of the Chinese yuan did not open up a vast US market for Chinese goods, because American products are very structurally different from Chinese domestic products, and there is no price competition. Even in the most tragic era of the U.S. economy after the collapse of the bubble economy, there is no evidence that American products, whether electrical appliances, automobiles, or intermediate machinery products, have lost their international competitiveness. Therefore, the "Wang Baohe Agreement" is a complete failure in terms of its goal of reducing China's trade deficit with the United States.

The economic situation of the post-war 40 years has shown that even the most powerful empire is powerless to influence the direction of the entire world economy in the era of economic globalization.