Currently, the U.S. and European monetary authorities continue to expand the already released mobile signal; the Japanese central bank resorted to a zero interest rate policy; Korea, Brazil, Thailand, Singapore and other countries are brewing or take market operations affect the currency exchange rates; accused of some developed economies emerging economies, their currencies undervalued. For a time, the international financial markets jittery, people worry about “currency war” may be this open.

In the current backdrop, the so-called “currency war” refers to the countries competing to keep their exchange rates to allow the export sector a competitive advantage, to protect or expand their international market share in related industries. Understandably, this strategy is the extreme nature of trade protectionism and financial unilateralism in the world economic recovery remains weak, the same as in quenching thirst with poison, no one will be the winner.

First, in the current round of financial crisis, monetary easing in Europe and America, to include the “quantitative easing” policy, including the means of injecting massive liquidity to the market. This became the continuing depreciation of the dollar and other currencies of the important reasons. It can be predicted, as long as this policy is not reversed in Europe and America, the relevant national currency relative to the upward pressure will continue to exist devalued currency does not help solve the underlying problem.

Secondly, the “currency war” the crucial point is that countries give up the principle of cooperation and coordination, expand the exchange rate depreciation competition. Thus, the exchange rate down to win by a country’s short-term export advantage will quickly be offset by similar policies in other countries.

In addition, the current European and American economies are still struggling with economic weakness, rising unemployment, public finance imbalances and other issues, shrinking demand for imports and exports power increase. The decision may enter the international trade of high incidence of disputes. In this sensitive time, open the “currency war”, may stimulate some countries, import quotas and higher tariffs compressed, triggering a trade war, damage to the interests of all.

Human history is littered with “currency war” painful lesson. The thirties of last century the global economic crisis, a number of major economic powers to abandon the gold standard, from the narrow interests of the purposes of “beggar thy neighbor” policy of currency depreciation, exacerbated the crisis devastating poison the international economic and trade relations, and ultimately induce a second World War II.

Current global financial crisis, the international community, through the summit of the Group of Twenty and other platforms, launched an unprecedented large-scale international cooperation. Period, the States not only enhance the coordination of economic stimulus and effectiveness, but also for international financial reform and other deep-seated problems and reached broad consensus, and thus effectively stabilize financial markets and enhance market confidence and greatly ease the impact of the crisis . Both positive and negative experience tells us that the global economic crisis, protectionism will only lead to division and turmoil, only a united international community to cooperate to find a way out of the economic downturn.

We are not without concern that, with the crisis receded, trade protection in some countries tend to become more intense. International Monetary Fund (IMF), President Kahn has pointed out that the financial crisis in some countries show a strong willingness to cooperate has now weakened, some countries try to solve international problems by acting alone approach is to face the global economic recovery, the real threat.

States intervention in the exchange rate started the thirties of last century, when the crisis is not such a vicious war on the exchange rate, not yet reached the “war” level. However, some European and American economies abandoned the spirit of cooperation has frequently threatened to impose sanctions fiery speech has become, if not reined in, can easily lead to unexpected. At this critical moment, all responsible countries should promptly abandon protectionist attitude, to return to international coordination and cooperation in the multilateral framework, the only way to promote global economic recovery.

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