What Is The International Attitude Of RMB "Knocking"?

Chinese Premier Li Keqiang made clear his position last month when he met with President Lagarde of the International Monetary Fund (IMF): "China hopes to join. SDR We should take an active part in maintaining international cooperation in global financial stability, and at the same time promote further opening up of China's capital market and financial sector. Sincere attitude.

According to foreign media reports, an international financial official pointed out that China The renminbi is closer to the list of major reserve currencies, and an agreement is likely to be reached later this year to bring the renminbi into a basket of currencies of the International Monetary Fund (IMF) special drawing rights (SDR).

The United States has a conservative attitude towards this matter. US Treasury Secretary Jacob Lew After visiting Beijing this week, the renminbi has not yet reached the standard of inclusion in the SDR basket of currencies.

"We need to further open and reform to achieve this standard. We are happy to see the progress of these necessary reforms," Jacob Lu said in a speech in San Francisco on Tuesday.

RMB has become the fifth largest trading currency in the world. The Chinese authorities have made significant progress this year in terms of the infrastructure needed for RMB internationalization.

The official said that G7, a member of the European Union, Germany, Britain, France and Italy, is inclined to include Renminbi in the basket this year.

Japan is more reserved than the United States.

At present, the basket of IMF currencies includes US dollars, euros, Japanese yen and sterling.

According to IMF officials, the IMF Council will discuss the request made by China in early May. It will make a comprehensive review of SDR every five years later, and will make a decision in November.

"Germany believes that based on current standards, it supports the inclusion of RMB in the basket of currencies." Joachim Nagel, a member of the German central bank executive board, said at the Boao Forum last week.

He said the upcoming comprehensive review would be a good opportunity to be included in the renminbi, adding: "we appreciate China's recent progress in the process of RMB liberalization."

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Speeding up the realization of RMB capital account liberalization is bound to be the highlight of the 2015 financial reform. Until now, there is still controversy about the timing of opening up.

During the 2015 annual meeting of the Boao forum for Asia, the timing of the opening of the RMB capital account and other issues, Wu Xiaoling, vice president of the finance and Economic Commission of Wudaokou Tsinghua University and the vice chairman of the NPC Financial and Economic Commission, received an exclusive interview with the first financial daily.

To achieve the maturity of the convertibility of capital account, Wu Xiaoling said, in fact, from the 7 major categories and 40 sub capital items defined by the International Monetary Fund (IMF), in addition to 4 items, China has realized full or partial convertibility. One of the four most important points is to borrow foreign debts and a non resident to invest in China, including creditor's rights, stocks, derivatives, etc., as well as domestic residents to invest abroad, that is, the investment of financial assets.

Wu Xiaoling pointed out that at present, the domestic management of foreign debts basically takes the way of controlling each borrower's balance sheet, and has a certain degree of liberalization. Overseas residents investing in the territory already have QFII (qualified foreign institutional investors), and RQFII (RMB qualified foreign investors). Domestic residents investing abroad also have QDII (qualified domestic institutional investors). The direct investment of domestic and overseas residents has been linked by Shanghai and Hong Kong.

"In addition, since 2005, residents have 50 thousand dollars per year for free purchase and payment of foreign exchange. What is the concept of 50 thousand dollars? According to the exchange rate of RMB against the US dollar at that time, it is around 8.2 yuan, that is to say, 400 thousand yuan can be traded arbitrarily. For ordinary people, it is very convenient to use remittance. It can be said that we have had the amount of accumulation, let go, I think it is not a problem, do not have to worry about the immature conditions. Wu Xiaoling said.

The market once questioned that once the convertible capital account is opened, there will be a big risk of capital coming and going. How can we prevent and control it?

Wu Xiaoling said, first of all, the current implementation of the free trade pilot area is to manage the accounts separately and monitor the free trade account (FTA). The State Administration of foreign exchange has also established an account monitoring system over the years. The risk of capital account liberalization mainly comes from the uncertainty of capital flow. If there is an account monitoring system, we can guard against the flow of capital.

Second, all convertibility is not totally unregulated. If there are some economic behaviors that are not allowed, then there will be some control over capital and investment. This is also possible; third, it is precisely because of the realization of convertibility that the fluctuation of RMB prices can reflect supply and demand more. When the price distortion is reduced, the risk of speculation will be reduced. Fourth, when the economy has great problems, it can also be temporarily controlled. So overall, there is not much risk.

Finally, Wu Xiaoling said: "the risk of convertibility under capital terms is the key to whether China's economy is at risk. Under the current international economic situation, although China's economic development is entering a new normal and developing at medium and high speed, we still look good globally, so there is no big problem."