The G20 Global Summit Has Just Ended And The RMB Exchange Rate Issue Has Attracted Much Attention.

The meeting of the group of twenty (G20) at the weekend has given the main trading partners more confidence that China will not allow the renminbi to depreciate significantly, but it may be more difficult to win the trust of investors.

During this session, Chinese Premier Li Keqiang and governor of the central bank Zhou Xiaochuan tried to dispel the concerns of G20 finance ministers and central bank governors on China's economic strategy relying on the depreciation of the renminbi.

Lagarde, President of International Monetary Fund (Christine Lagarde), said at the end of the Shanghai G20 meeting on the weekend that China clearly and clearly stated that China had "no intention, intention or decision to devalue the renminbi" at all.

As China's economic growth has dropped to its lowest level in 25 years, fears in recent weeks that global markets are likely to allow the renminbi to depreciate significantly has been heating up.

One before the start of the G20 formal meeting.

On the forum, Zhou Xiaochuan made a strong statement in English: "from the economic fundamentals, the RMB exchange rate does not exist on the basis of sustained depreciation."

Since then, Li Keqiang described China's structural reform plan at a video conference with G20 on Saturday.

Chinese officials' statements were praised by Jacob Lew, the US Treasury secretary.

He said there is a need for such communication, because private dialogue can not infiltrate the consciousness of many observers, who want to know the purpose of China's policy initiatives.

Lu said Sunday that such honesty should not be a flash in the pan.

When he met with Vice Premier Wang Yang in Beijing, he also said that China's implementation of a pparent exchange rate policy is of great significance. At the same time, Beijing should clearly communicate its actions with the market.

Although G20 said that countries may have to explore the issue of expanding spending, their commitments did not meet the expectations of IMF and other institutions. The latter hoped that G20 could cooperate with the stimulus plan to revive the depressed economy.

At the same time, G20 did not hold consultations on exchange rate agreements. Some investors called for some exchange rate agreements to curb global economic shocks. G20 officials insisted that there was no serious exchange rate imbalance.

The G20 communique reflects a consensus within the organization that many countries are too dependent on monetary policy to stimulate economic growth.

The communique reiterated that Member States promised to restrain the depreciation of their currencies in order to gain competitive advantage, which indicates that G20 still worries about China.

Officials said that at the G20 meeting, China rarely introduced the work ideas of the relevant departments of China, and responded to the concerns of the international community, easing the external unease of China.

But investors still have reason to be cautious.

Chinese officials have not committed themselves.

It will no longer depreciate, only saying that China will not seek policies aimed at devaluing the renminbi.

If China's foreign exchange reserves continue to spend at a rate of about $100 billion a month, it may allow the Chinese government to change its mind and push it to suppress speculative selling against the renminbi through one-off depreciation.

Chinese officials say more than $3 trillion of foreign exchange reserves are an important source of stability.

Although the renminbi is referenced by the three currency basket, Zhou Xiaochuan told reporters last Friday that the US dollar is still the most important currency in a basket of currencies.

This shows that the central bank still wants to maintain.

Flexible mechanism.

David Loevinger, a former US Treasury representative to China and now a TCW fund manager in Losangeles, said the currency basket model itself is risky because it lacks pparency, and once the yuan falls, China has the opportunity to shirk its responsibilities.

He said that besides the US dollar, the basket of currencies also includes the euro and the yen. China can say that since the euro and yen depreciate, the renminbi will depreciate, so it is not responsible for any exchange rate turbulence.

Although global policymakers have expressed appreciation for China's efforts in policy communication, no one thinks that China has revealed new information to the outside world to explain how it can avoid a crisis or currency disaster in front of many economic challenges.

The Chinese government recently arranged a rare news conference on Friday by Zhou Xiaochuan, governor of the central bank, which inspired some analysts.

But some people say that the Central Bank of China may need to hold such a regular conference to encourage foreign funds to invest in Renminbi denominated assets.

The G20 conference did not give a clear answer on how to manage the RMB exchange rate in China.