The Road Map Of RMB Internationalization

First, what does the internationalization of currency mean? Why do storytellers have this problem, because before the US dollar became the global dominant currency, it basically used the precious metal or the money linked to precious metals to complete the monetary function of the global economic and financial operation. Only after the collapse of the Bretton Woods system, the global economy first used a sovereign credit currency as the world currency. Then every crisis erupted was related to the arrangement of this new monetary system, so the substitution of the US dollar for many years has been called for many years, but the position of the US dollar as the pricing currency, trade settlement currency and reserve currency of the global primary products has not been shaken. Therefore, what is internationalization is to have these three functions on a global scale. In a popular way, the global recognition and usage of a currency are very high.

Second, if the US dollar is used as a template, there is a natural dilemma in the process of RMB internationalization. China's economic growth is inseparable from external demand. For this reason, monetary authorities need to maintain exchange rate stability, resulting in trade surplus and the growth of foreign exchange reserves. The huge amount of foreign exchange reserves actually means that the country has been holding other countries' currencies, which in itself is an offset to the promotion of its currency internationalization.

By the end of June this year, the data of the International Monetary Fund showed that in the global foreign exchange reserves of the known currency structure of 6 trillion and 300 billion US dollars (and 5 trillion and 700 billion US dollars did not disclose the currency structure), about 60% were the US dollar, followed by the euro, yen, sterling, Canadian dollar, Australian dollar, Swiss franc and its other currencies, while the US dollar accounted for almost the same as before the crisis. In the seven years since the crisis, the global foreign exchange reserves did not change with the US dollar.

By the end of 6 2014, the balance of global foreign exchange reserves reached US $12 trillion, an increase of 5 trillion and 300 billion yuan compared to the pre crisis (2007), of which China's foreign exchange reserves increased from 1 trillion and 500 billion to 4 trillion, an increase of 2 trillion and 500 billion. That is to say, half of the increase in global foreign exchange reserves came from China's contribution since the crisis.

The above two data reflect that China, as the country with the largest increase in foreign exchange reserves, although it has the dream of becoming a world currency, is actually the most staunch supporter and defender of the US dollar.

What a paradox!

The proposal to create an international reserve currency that can be decoupled from the sovereign state and keep the currency stable for a long time, so as to avoid the inherent defects of the sovereign credit currency as reserve currency, is the ideal goal of the international monetary system reform. At that time, his proposal had heated discussions. The storyteller believed that President Zhou Xiaochuan might have seen the paradox of the internationalization of RMB. Only after more than 60 years, he put forward the variant of the "Bancor" plan that was not designed by Keynes in 1944. The plan was put forward by the British economist Keynes in 1944 at the United Nations Monetary Union meeting in Bretton Woods, New Hampshire, where the world currency was issued by the international clearing union. Do you recall that President Zhou Xiaochuan wrote in March 2009 about "thinking about reforming the international monetary system"? Just this time, President Zhou proposed expanding the role of the super sovereign reserve currency of the existing SDR (Special Drawing Rights).

Thus, in Renminbi Internationalization In the dream, there has never been any idea of replacing the US dollar actively, and it has become a member of the diversified monetary system in the future. This crisis has just given the RMB opportunity. This is also the core of the third breakout of the Chinese economy that many storytellers emphasized.

Looking at the process of RMB internationalization in the past five years, especially the practical thinking of the Central Bank of China, we would like to speculate on the roadmap of RMB internationalization in the future: the opening process of RMB capital account will definitely accelerate. The reason is that the core of RMB internationalization is a "use" so that non residents can make full use of it. RMB To meet their own needs such as trading and investment, for other governments and institutions, it is necessary to ensure that they can conveniently realize the balance of risks and benefits of RMB assets. Only in this way can people be willing to hold Renminbi. Only in this way can the Chinese government seek to make the International Monetary Fund raise the proportion of RMB in SDR. However, if China's internal financial market is lagging behind in its depth and breadth, and if it is internationalized and unilaterally liberalized capital controls, there must be an earlier quotation. Yu Yongding The worry of sir. So parallel with the opening of capital account is the rapid advance of China's internal financial reform. These two are indispensable.

But the situation is always stronger than people, complex and changeable is the main feature of financial operation, so the storyteller's speculation above is only a piece of paper. What I will not know is what I will not know.