Keywords: RMB internationalization process financial system exchange rate
First of all, the questions raised
In recent years, with the rapid growth of China's economy and the continuous expansion of opening to the outside world, the RMB has gradually gone abroad. In China, Hongkong, Macau, Singapore, Thailand, Vietnam, Myanmar, Russia and other countries and regions, RMB can be used locally or nationwide. The RMB has been circulated and freely convertible within a certain range, the RMB exchange rate mechanism has been continuously improved, and the degree of financial openness has been gradually expanded. China's important role in global economic development has laid a good foundation for the internationalization of RMB.
Second, the long-term analysis of RMB internationalization process
(A) Analysis of the external environment
On the one hand, the internationalization of RMB can make our country obtain international seigniorage income and enhance our economic strength. It can also reduce the loan and inflation losses borne by China's huge foreign exchange reserves. On the other hand, the internationalization of RMB can increase China's voice in the international economic field and enhance China's international status and influence. The benefits brought by RMB internationalization to China will affect the interests of international currency issuers and lead to the deterioration of geopolitical relations. Therefore, the issuing countries of international currencies will take measures to prevent or delay the internationalization of RMB.
(B) Analysis of internal conditions
RMB internationalization needs to go through two stages. The first is the regionalization of RMB, which has become a means of trade settlement and payment in neighboring countries and Asia. Then there is the internationalization of RMB, which is generally accepted all over the world. The realization of these two stages depends on the development of China's economy and financial market. In the slow development of the world economy, China's economic development has also been affected to some extent, making it difficult to achieve rapid and stable economic development. China's financial market controls capital projects strictly. The convertibility of RMB and the openness of RMB capital market are in a low pattern. The current exchange rate system in China makes the RMB exchange rate inflexible, which affects the internationalization of RMB. This system reform will also be a long process. Both external and internal analysis show that the process of RMB internationalization is long-term. Then, such a long-term process will definitely have a great impact on China's economy in various fields and aspects.
Third, the benefits of RMB internationalization process
(A) conducive to the deepening of China's financial market
The increase of RMB international circulation will make China's financial market more open. The large-scale transaction of RMB assets and the use of RMB as the final currency of international settlement put forward higher requirements for the efficiency and level of China's financial market, thus promoting the deepening of the financial market.
(B) conducive to the internationalization of China's financial system.
The internationalization of RMB can promote China's finance to actively participate in the international market competition and alleviate the currency mismatch in the financial system. In the process of RMB internationalization, there will be more international trade and capital denominated in RMB, and China's financial industry will have obvious advantages, thus enhancing the international competitiveness of China's financial industry.
(3) It can promote the cultivation and development of offshore RMB market.
With the development of RMB internationalization, overseas demand for RMB has increased, and the emergence and development of RMB offshore market that provides RMB investment or financing means for non-residents will become inevitable.
Fourth, the economic impact of RMB internationalization.
(A) causing pressure and frequent fluctuations of RMB exchange rate appreciation
In the process of RMB internationalization, the demand for RMB is not only domestic demand, but also overseas demand, and the overseas demand is increasing in the process of RMB internationalization. The exchange rate of RMB is determined by the demand and supply of RMB. Therefore, there will be continuous appreciation pressure on the RMB. The most direct impact of exchange rate appreciation is export, which has a great impact on China's export-oriented economy.
In the process of RMB internationalization, RMB offshore financial center will be formed. If the domestic exchange rate is not fully marketized, the fully marketized overseas RMB exchange rate will impact the domestic RMB exchange rate. In this way, it will cause large-scale arbitrage activities, and the RMB exchange rate will fluctuate more frequently.
(2) The operational risks of financial institutions will increase.
In the process of RMB internationalization, RMB is used more and more internationally. China's banks can't accurately determine the RMB stock in the hands of non-residents, and face the pressure of centralized anti-deposit and large-scale withdrawal. There will be more and more banks that can operate RMB business, and the business competition between domestic banks and foreign banks in China will increase operating costs and risks.
(C) exacerbated the fragility of China's financial system.
With the internationalization of RMB, China's financial system will be gradually opened, and the state's control over exchange rate and capital account will be gradually relaxed. The resulting international speculation and various financial risks pose a considerable threat to China's financial system. The construction and experience of China's financial system to deal with international risks are slightly insufficient, and the vulnerability problem is more obvious.
(D) Weaken the independence of China's monetary policy.
In the process of RMB internationalization, China's monetary policy will no longer only affect China. Therefore, when formulating monetary policy, China should also consider the economic situation of other countries. In addition, due to the instability of the overseas stock of RMB, the supply of RMB will be more difficult to determine, which will also weaken the independence of monetary policy.
Verb (abbreviation of verb) Countermeasures in the process of RMB internationalization
(1) Vigorously develop border trade and promote the regionalization of RMB.
At present, the free convertibility of RMB under capital account is still limited, the participation of RMB in the international financial market is low, and there is almost no international function of currency. Promoting RMB regionalization through border trade is still an important entry point for RMB internationalization.
(2) Reuse the offshore RMB center in China and Hongkong.
As one of the important international financial centers, Hong Kong has a strong radiation ability to the economies of Asia and neighboring countries. Especially in the case that RMB is still subject to exchange and circulation control and RMB liberalization has not been fully realized, offshore centers are an important channel for RMB to become a regional key currency. Through this channel, RMB can circulate in neighboring countries more effectively, play a greater role in international currency, and achieve better development of RMB internationalization.
(3) Establish RMB demand monitoring mechanism.
The uncertainty of RMB overseas demand has a great influence on RMB exchange rate, and frequent exchange rate fluctuations will cause financial instability. Being able to grasp the demand trend of RMB in time can alleviate the influence of RMB internationalization on China's price and RMB exchange rate level.
(D) adjust the mode of economic development
China's economic development model is export-oriented, and export trade accounts for a large proportion in economic development. In the process of RMB internationalization, the appreciation and frequent fluctuation of RMB exchange rate will reduce the competitiveness of export products and have a great impact on export trade. Therefore, we are required to adjust the economic development model, reduce the dependence of the economy on foreign trade, and realize the rapid and stable development of our economy.
(V) Promoting the internationalization of China's financial system.
In fact, the internationalization of RMB is a complementary process with the improvement of China's financial system. China's financial system is developing towards internationalization, relaxing exchange rate and capital account controls, and improving the stability and openness of the domestic financial system. The internationalization of the financial system can promote the steady development of RMB internationalization.
refer to
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[4] Yu Xueqi, Luo. On RMB Internationalization [J] Reform and Opening-up, No.3, 2009
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