Yu Yongding: RMB Internationalization Should Be Subject To Liberalization Of Capital Account

< p > RMB a href= "//www.sjfzxm.com/news/index_cj.asp" > internationalization < /a > is the function that RMB can perform currency abroad.

This is a process of gradually expanding the scale of cross border use of RMB.

How do we do this? The central bank has a road map of RMB internationalization.

According to my understanding, the roadmap can be roughly divided into the following stages: < /p >

< p > first step, through the import settlement, so that the "a href=" //www.sjfzxm.com/news/index_cj.asp "RMB" /a "outflows the overseas, if the non residents can not get the renminbi, then the rest will not be able to talk about, this is the first step as the internationalization of RMB.

By importing settlement, I buy your stuff, I pay you RMB, so that RMB is out of circulation.

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The second step is to allow non residents to invest in Renminbi assets in Hongkong, Taiwan, China, and foreign residents in P.

This is the so-called "RMB reflux mechanism".

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< p > > a href= "//www.sjfzxm.com/news/index_cj.asp" > RMB bonds > /a > RQFII and the "Shanghai and Hong Kong Tong" that we are talking about now are in fact allowing Hongkong residents and other overseas residents to buy Personal currency assets through some channels, such as stocks, bonds, etc., with their holdings of RMB.

This is a very important step to decide whether the non residents are willing to hold RMB and whether RMB can flow abroad.

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< p > Third, on the basis of the RMB settlement and reflux mechanism, the central bank hopes that on the one hand, RMB will continue to flow to the outside world, while the demand for RMB by overseas residents will also increase.

Over time, the overseas RMB market has gradually expanded.

With the growth of overseas RMB stock, the settlement of RMB imports and exports will become more and more balanced.

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At the end of the P, the scale of RMB settlement and investment is increasing. Various RMB related financial products are emerging and the liquidity of RMB assets is getting better and better.

With RMB, I can easily buy RMB assets in China, and it is also very easy to change Chinese renminbi assets into Renminbi and then exchange them for us dollars.

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< p > of course, there are other conditions, especially RMB credit.

Once these conditions are met, no matter what fluctuations the Chinese economy will take in the near future, whether or not it can obtain foreign exchange spreads and spreads, overseas residents will be willing to hold Renminbi and low yielding RMB assets, that is, the renminbi as a means of value storage, which is the highest stage of international currency.

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Once P reaches such a level, the currency of this country can act as "international White Bill" and it can collect seigniorage taxes internationally.

The dollar is in that position.

If our long-term efforts are made, the RMB will finally be able to make the three functions that I have just said in a large scale, and in particular will eventually become reserve currencies, and the goal of RMB internationalization will be achieved.

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