How Far Is The Internationalization Of RMB?

The British government has recently confirmed that it plans to issue Renminbi bonds in the coming weeks or months, and will use the proceeds from the issuance of treasury bonds as the foreign exchange reserve of the British government.

This means that Britain will become the first foreign government to issue RMB bonds, and the renminbi will be included in the UK's foreign exchange reserves for the first time.

George Osborne, British Chancellor of the exchequer, said at a media meeting on the day that the move is a "confidence statement" that the United Kingdom will become the world's major reserve currency.

In fact, more and more countries and regions choose RMB to realize the functions of currency settlement, investment, valuation and even reserve. RMB is gaining more and more recognition in the global market, and the pace of RMB internationalization is steadily advancing.

Growth comes from market confidence

Data show that the UK is the fastest growing Renminbi payment market in Europe. From July last year to July this year, the amount of payments increased by two times.

In 2013, London's foreign exchange pactions averaged $25 billion 300 million a day, an increase of 50% over the previous year.

"As China becomes more and more integrated into the world economy, the recognition of RMB by the international community is increasing.

The peculiarity of Britain is that London has the largest financial center and foreign exchange trading center.

The UK intends to issue Renminbi bonds, which can be seen as a huge improvement in the recognition of RMB by the international financial community and an important symbol of the internationalization of RMB.

Zhao Xijun, vice president of the school of Finance and finance, Renmin University of China, told reporters that at present, China has reached a monetary cooperation agreement with several countries, creating favorable conditions for the internationalization of RMB.

At the same time, many enterprises in China, especially financial institutions, have been investing more and more overseas, and have also expanded the influence of RMB to a certain extent.

It is understood that in recent years, China's banking industry has stepped up its pace of "going global". Through cross-border RMB settlement experiments, establishing branches abroad, and working with interbank banks, the RMB has been steadily moving towards internationalization.

Data from the global Interbank Financial Telecommunication Association show that in August this year, the amount of RMB settlement accounted for 1.57%, and continued to consolidate the position of global payment currency in seventh place.

The RMB internationalization report 2014 released by Renmin University of China in July this year is expected to become the third largest international currency after the US dollar and the euro in 2020.

Generally speaking, if a sovereign currency becomes an international currency, it must go through the trilogy of international trade settlement currency, investment currency and reserve currency.

Central bank governor Zhou Xiaochuan said earlier this year about the internationalization of the RMB, pointing out that the internationalization of RMB has not been carried out for a long time, and that the proportion of Renminbi used is relatively small. Although the growth rate is very high, the proportion actually used in international trade and investment is relatively low.

"If the RMB is really internationalized, there are still a lot of homework done."

Zhou Xiaochuan believes that we need to steadily and steadily achieve the convertibility of RMB capital account, which will make a more substantial improvement in the international ease of use of RMB and the confidence in RMB.

In promoting the use of Renminbi, we did not advance speed, rhythm and time.

However, more efforts should be made to promote the use of RMB, but create conditions to create conditions gradually from policy, strength and confidence so that the renminbi can be selected for use.

It should be said that in recent years, the smooth operation of the macro-economy, stable exchange rate and currency value, and the accelerated settlement and convenience network have made RMB gradually recognized and accepted by the whole world, and the demand for RMB has been increasing.

"Internationalization of RMB is fundamentally a process of market choice. The government and the central bank constantly create conditions to make money better accepted and chosen for the market through institutional arrangements."

Cao Honghui, vice president of China Development Bank Research Institute, said.

In recent years, the use of RMB in foreign trade has been increasing.

Central bank data show that cross-border settlement in 2013 reached 5 trillion and 160 billion yuan, a significant increase of 61% over the same period last year.

The establishment of the Shanghai free trade zone also provided a new impetus for the internationalization of RMB.

At the same time, due to the increasing proportion of RMB in international trade, the scale of settlement is increasing day by day, and the asset pool of offshore renminbi has been expanding.

It is understood that following China's Hongkong and Singapore, China's Taiwan, London, Frankfurt and Seoul have also launched offshore RMB center construction.

In February 2013, the people's Bank of China authorized the ICBC (601398, Ba Ba) Singapore branch as the clearing bank of RMB business, becoming the first RMB clearing bank designated outside China.

As of June this year, Singapore's RMB deposits reached 254 billion yuan, an increase of 84% over last year.

Singapore's first RMB on the 22 th of this month

At the summit, Liang Xinsong, assistant director of the Singapore monetary authority, said that with the diversification of Renminbi products, pipelines and services, the RMB will accelerate internationalization in the next five to ten years.

At present, the renminbi is actively moving out of the world through domestic and foreign trade.

"But from the point of view of international currency, the largest amount of currency settlement is in the field of Finance and investment."

Zhao Xijun said that at present, the internationalization of RMB should adhere to "walking on two legs". On the one hand, we should continue to use our trade advantages to promote the internationalization of RMB. On the other hand, we should expand the use of RMB in finance and investment, increase the innovative ability of financial products, and constantly meet the market demand, which undoubtedly puts forward more urgent requirements for the reform of domestic financial market.

At the Eleventh China ASEAN Expo held in Nanning, Guangxi, the relevant people mentioned that the current RMB "going out" is also faced with problems such as high paction cost, insufficient business innovation and difficult to meet the demand due to the lack of infrastructure.

The overseas Chinese director of Kampuchea Jiahua bank pointed out that although there are more and more Renminbi in Sino Cambodian trade, there are not many Kampuchea banks that can provide RMB clearing business, so the related services are difficult to meet the market demand.

Cao Tong, vice president of the China Import and export bank, said that because of the lack of business innovation, it is difficult to use Renminbi to invest and finance abroad.

Ma Jun, chief economist of the people's Bank of China, believes that for the internationalization of RMB, we should further promote the facilitation of RMB in cross-border trade settlement, establish RMB cross-border payment and settlement system, promote overseas direct investment under personal terms, and encourage the issuance of RMB "panda debt"; in the medium term, we should gradually realize the convertibility of RMB capital account; in the long run, we should promote diversification of the international monetary system.