Home > WordPress > RMB internationalization need the integration of internal and external

RMB internationalization need the integration of internal and external

Todays Date: December 15, 2018

Recently, the World Bank announced on 14 January in Hong Kong, issued 74.6 million dollars bonds for two years, that to show international organizations and investors more recognition for the stability of the RMB, but also makes all the prospects for the internationalization of RMB is more promising.

Promote the internationalization of RMB is the proportion of China’s economy and quality suitable choice, but also economic and financial market reform in China the result, in order to promote its economic and social development of China’s major power, and to avoid negative factors related to the need for this problem to start thinking more deeply.

Must first figure out the problem is that the RMB Why international? In other words, what is the goal of internationalization of the RMB? I believe that the aim should be to achieve win-win situation between China and the world.

In the process of internationalization of the yuan, some are extreme views, such as too much emphasis on one or the other alternative relationships between currencies, which is not conducive to reasonably determine the direction of RMB internationalization. In fact, the fundamental background of the internationalization of RMB is the existing international monetary situation and the international economic landscape has become increasingly do not match.

Mainly in the 21st century, the U.S. economy beginning in the exposed deep-rooted problems, its economic vitality, scale and influence into a recession. By contrast, emerging market economies in the global status has been increasing.

Behind an international currency, is still the most important support a country’s economic strength. It is because of the international monetary system does not reflect changes in the overall strength of all countries, resulting in a pattern of adjustment of the internal pressure on the currency.

In particular, in promoting the process of internationalization of the RMB, the currency should be more emphasis on win-win cooperation, rather than the currency of war, like the currency against the “total input” move, but also to recognize that the existing international monetary system has not to drastic changes in the timing, just need to repair and improve the U.S.-led structure.

The purpose of promoting the internationalization of RMB must be conducive to changes in domestic economic development model to improve the welfare of residents.

Specifically, on the one hand, to promote the internationalization of the RMB yuan to be committed to solve the “external appreciation, internal devaluation” case, the domestic risks and losses suffered by the residents.

On the other hand, the RMB internationalization must be able to eventually get rid of promoting export-oriented Chinese model of development through the exchange rate formation mechanism, foreign exchange management system and other aspects of market-oriented reforms, weakening the role of Western political pressure side under the nominal exchange rate of RMB appreciation, protect the real exchange rate of productivity growth increased to ensure that workers can get from the internationalization of RMB tangible benefits.

It should be said, the direction of promoting the internationalization of RMB is inevitable, but the short term the degree of internationalization of the RMB should not have to ask too much. As a country’s currency will also have a large number of international macro and micro risks, and therefore it has experienced a long period of preparation and adaptation.

For China, in the next period of time, the internationalization of RMB to advance step by step, and the need to focus on moderate reforms. If almost completely open capital account, as necessary for the mainstream international monetary conditions, which will give the management level is not high, there are problems of economic structure in China have significant external uncertainty, so the capital liberalization to be modest advance the appropriate degree of internationalization of the RMB will not be “one step.”

A country’s currency to go international, there are several basic conditions must be met. Include: economic scale, currency stability, financial market development, institutional transparency, a stable currency output pathway. China’s situation, already has the basic conditions for economies of scale, but other factors yet to be perfected.

One, although in recent years outside the RMB more “strong” upward trend against the U.S. dollar, but domestic inflation is built on the basis of high pressure. With the exchange rate regime continues to market and capital market liberalization, the future of RMB and U.S. dollar will face similar pressures. In this regard, we need to constantly improve the mechanism of monetary policy to avoid “internal currency,” the disorder fluctuations, for the future lay the foundation for the internationalization of RMB.

Two, a currency has been able to become an international currency, there is another important reason is that many international investors are willing to hold that currency, for investment in financial products denominated in that currency, which requires a state-developed and international financial markets.

For China, this is an obvious “shortcomings”, offshore investment targets holders of RMB is still very scarce, domestic financial markets are in a strong regulatory state. Therefore, to speed up the domestic financial product innovation, while modest increases in financial market openness, and to develop offshore financial markets in order to increase the yuan’s attractiveness to investors.

Three, businesses and individuals to accept a country’s currency can be traded as an international currency, behind that of its government and economy of the country’s confidence and approval management system. For most international investors, this means that a country needs a transparent, market-oriented economic system and administrative system.

A country’s currency to become an international currency, also need to have a stable supply of foreign channels such as the United States is the main output to the world through the trade deficit to U.S. dollars. In the export-oriented model of development, China has accumulated a huge trade surplus and foreign exchange reserves, balance of payments imbalances that the RMB exchange rate is not conducive to the stability of the yuan also blocked the way out through the trade. Therefore, accelerating the transformation of economy, nurture and promote the development of the domestic market, reducing the excessively high trade surplus, an increase of RMB is a prerequisite for overseas supply.

In the current complex international financial system and monetary situation, the yuan to move towards internationalization, not only improve the internal infrastructure, it should be more within the international institutional arrangements and innovation, so that the internationalization of the RMB to get more pulling power .

Indeed, in recent years, China has directly or indirectly related reforms, such as: currency swaps with other countries coordinate; with Malaysia and Russia bilateral currency settlement and trading pilot; widen the yuan trading settlement pilot and so on.

In the future should further promote the development of various types of financial products RMB in Hong Kong and Shanghai simultaneously to speed up financial innovations, in order to lay the internationalization of RMB financial markets and product base (wholesale products).

In addition, to strengthen the coordination with the emerging economies, and the establishment of operational mechanisms for implementation, to reform the existing international monetary system (international trade), urging the United States and other developed countries to undertake their responsibility for a particular currency, while developing countries should be more proactive to deal with the dangerous of U.S. dollar exchange rate fluctuation, support the RMB as the representative of the major emerging economies monetary international. From: wholesale electronics

http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/digg_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/reddit_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/dzone_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/stumbleupon_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/delicious_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/technorati_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/google_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/yahoobuzz_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/mixx_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/twitter_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/jamespot_32.png
Comments are closed.