It Is A Technical Activity To Evaluate RMB'S Entry Into SDR.

Joining SDR is more important in the medium and long term.

China's macro policy framework formulation, market communication mode, data pparency and so on will all look at problems in an international perspective, step by step with international standards, and keep pace with international standards.

This is also the greater pressure China's financial institutions are facing.

(1) from April this year, IMF and the Central Bank of China conduct a technical consultation every month. By June, the operational level has basically been solved.

(2) the stock market turbulence in 7 and August and the fluctuation of the foreign exchange market after the 8.11 exchange rate reform have caused some problems to the assessment team.

It was not until October that all "dangerous points" were excluded.

(3) in the process, the foreign party has always been more proactive than the Chinese side, and the government has not made any commitments in private.

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In December 1st, there was little suspense. The International Monetary Fund (IMF) announced that the renminbi entered the basket of SDR currencies.

What is the story behind this success?

There are two assessment criteria, among which the "widely used" standard has long been reached, and "free use" is the focus of attention.

Free use of money and convertibility are two concepts.

"Free use" is that capital controls can be implemented in the country, but money must be widely used in international markets and international pactions. Other central bank institutions will not encounter obvious obstacles when using money, which is a matter of operational level.

There are many currencies that can be freely convertible, and many developing countries are convertible currencies, but this is not necessarily attractive to international institutions and international investors, because the market capacity of these countries is very small and it is almost impossible to become a "freely available" currency.

The implied condition of free use of money is that the volume of the economy is large, the market capacity is large, and the depth reaches a certain degree.

From the previous situation in China,

The depth has reached the requirements, followed by the various details of the need for consultation.

It is a technical activity to evaluate the RMB's entry into SDR.

Since April this year, IMF and the people's Bank of China have conducted a technical consultation every month. IMF staff and the staff of ten central bank departments have re examined the package system framework of China's financial system, monetary policy system and data reporting system, and evaluated the pparency of the data.

By June, the two sides had held three internal consultations, and the technical and data pparency problems were basically solved. However, the volatility of the stock market in 7 and August and the fluctuation of the foreign exchange market after the 8.11 exchange rate reform had a great impact on the world financial market, which also caused some problems for the IMF assessment team.

Is China's policy retrogressive?

7, 8 and September are painful times for communication between the two sides.

It was not until October that all possible "dangerous points" were eliminated.

The whole basketball process did not go smoothly.

In fact, in the process, the foreign side has always been more proactive than the Chinese side, and the Chinese side is not very confident that it has achieved all the standards. The government has not made any commitments in private.

Both sides have eliminated all potential obstacles through continuous and effective communication.

It's not that China has to let it go.

Entering the SDR basket, the opening of China's economic and financial system has developed to a certain extent, reaching the threshold of entry, and the RMB has been invited to join.

There are two kinds of misunderstandings in the process of entering the basket.

One is conspiracy theory. It is believed that the international community is going to become the mainstream currency for China to enter the SDR basket. It needs more obligations, capital account liberalization, RMB convertibility and interest rate liberalization. This will bring disaster to the development of China's financial system and impede the realization of the dream of a powerful nation.

The two is the challenge. When the RMB enters the SDR basket, it will become an international reserve currency and challenge the international monetary system with the largest US dollar. China will lead the international economic and financial order in the future.

Both have extreme tendency in cognition.

In recent years, on the G20 and IMF platforms, China has consistently adhered to the position of "beneficiaries of the international economic order rather than spoilers". The starting point of China's reform is to improve the international financial system rather than establishing a new order.

CF40 is the leading professional think-tank in China. It was founded in April 12, 2008 and focuses on policy research in the economic and financial field. It has been evaluated by the industry as the most influential financial think-tank in China.

This column will provide a first-hand professional analysis for the first time based on a large number of internal achievements of CF40, focusing on the focus and key issues in the macroeconomic, financial and international fields.