Original title: "The internationalization of the renminbi is on the right track" - the international community is optimistic about the prospects for the development of the renminbi
At present, China's economy maintains medium- and high-speed growth, strong international competitiveness, and the current account surplus in the world. Recently, the RMB exchange rate has fluctuated, and it has also shown a rare depreciation trend against the US dollar, which has caused market concern. Experts and scholars from various countries who have been interviewed by this reporter unanimously believe that the recent depreciation of the RMB against the US dollar is mainly due to changes in the external environment of the international financial market. There is no continuous depreciation basis for the RMB. From the data point of view, the renminbi still shows stable and strong currency characteristics in the global monetary system, and China's economic fundamentals do not support the depreciation of the renminbi.
China’s economic fundamentals are good, and the “RMB depreciation†argument is highly misleading.
With the regularization, marketization and transparency of the exchange rate formation mechanism, although the RMB exchange rate fluctuates under the influence of the external environment, the domestic market is expected to remain basically stable overall, and the short-term fluctuation of the RMB is normal.
Sot Dawas, a senior researcher at Belgian think tank Bruegel, believes that the renminbi does not have the basis for long-term devaluation. The recent volatility is "the release of depreciation pressure before the renminbi raises interest rates." Davas said that as China's economic resilience continues to strengthen, China's economic fundamentals are good and does not support the depreciation of the renminbi. He believes that the current high expectation of depreciation is a problem that the RMB exchange rate system is difficult to avoid from fixed to floating. "Most market participants have become accustomed to the stable appreciation of the RMB exchange rate, and they are not accustomed to the new normal that the RMB can rise and fall."
The founder of the "BRIC" concept, Jim O'Neill, the former British Treasury Secretary of Commerce, believes that the "depreciation of the renminbi" is highly misleading, and its essence is more the appreciation of the dollar against other currencies. He believes that since the renminbi has expanded the exchange rate fluctuations, China's exchange rate reform is in its infancy, and both ups and downs are normal.
"The current fluctuations in the RMB exchange rate are mainly caused by changes in the external environment such as the international financial market, and are not caused by changes in China's domestic economic conditions." Cheng Taijun, a professor of economics at Yonsei University in South Korea, said in an interview with this reporter that The market generally expects the Fed to raise interest rates, the trend of other currencies depreciating against the US dollar is a natural thing. In general, the RMB exchange rate has the conditions to continue to maintain a basic stability at a reasonable and balanced level.
"The reaction of the financial market after the US election was completely opposite to the previous expectation. The US dollar index subsequently rose all the way and hit a new high in the past 13 years." Xuan Wei, a researcher at the Financial Industry Research Institute of the Korea Capital Market Research Institute, believes that Trump was elected president of the United States and the Federal Reserve. The expected increase in interest rates and the positive economic situation in the United States are all factors driving exchange rate fluctuations. Fluctuations in the exchange rate of the renminbi against the US dollar can be digested by the market without mandatory intervention. In the long run, the exchange rate of the renminbi against the US dollar will not continue to fall, but will float in both directions within a certain range.
“The renminbi is a very strong currency. Despite the recent fluctuations in the exchange rate, the depreciation of the renminbi is not large relative to most non-US currencies, such as the yen, the euro and the Swiss franc, which depreciated 10.5%, 5.8% and 4.2% respectively against the US dollar. "The trade with the world is an important part of globalization. China now has investments all over the world, and strengthening economic and trade cooperation with China is an inevitable trend," said Sven Jorgensen, head of the renminbi business at HSBC's German capital market. The internationalization of the RMB undoubtedly provides more cooperation and convenience.
Huang Zikai, an analyst at the Peterson Institute for International Economics in the US think tank, said in an interview with this reporter that the US economic data has improved somewhat recently, and the market is expected to increase interest rates for the Fed, which will lead to an appreciation of the US dollar. The main reason for the recent fluctuations in the RMB exchange rate is the relative depreciation caused by the appreciation of the US dollar.
The exchange rate refers to a basket of monetary mechanisms, and the renminbi can be more flexible in the face of the shock of the US dollar index.
In 2005, the exchange reform, in 2010, after the easing of the international financial crisis, the exchange rate reform was continued. In August 2015, the central parity of the RMB exchange rate was improved. In November 2015, the three major RMB exchange rate indices were launched... China gradually promoted the marketization of the RMB exchange rate according to the established thinking. To make the RMB more transparent, regular and predictable with reference to a basket of currencies, it has been fully affirmed by the International Monetary Fund. Even in the middle of this year, in the context of the “Brexit†and the major global currencies of the United Kingdom, the RMB exchange rate has shown a stable trend. This is the smooth operation of the exchange rate formation mechanism of “closing exchange rate + a basket of currency exchange rate changesâ€. The embodiment of the RMB exchange rate is fully conditional and continues to maintain a basic stability at a reasonable and balanced level. This means that the RMB exchange rate is gradually shifting from “dollar anchor†to “a basket of currency anchorsâ€. Under the current mechanism of RMB exchange rate reference to a basket of currencies, the RMB can also flexibly face the shock of the US dollar index.
In the long run, there is support for the renminbi to remain basically stable in the future. Davas believes that China's macroeconomic policies are sound, structural reform measures are gradually being implemented, and economic restructuring and upgrading are proceeding steadily, which will make the RMB not depreciate significantly. In addition, as the RMB officially joins the International Monetary Fund's Special Drawing Rights (SDR) currency basket and the further opening of China's financial market, the demand for RMB asset allocation in the international market has increased significantly, which will help maintain the RMB exchange rate. Basically stable.
Han Zaizhen, a researcher at the Korea Institute of Modern Economics, told this reporter that the renminbi is very stable in the long run. In the next 10 years, the renminbi will constitute the world's three major currencies with the US dollar and the euro, playing a greater role in the field of investment and reserve currency.
Zhu Min, former vice president of the International Monetary Fund, believes that the Fed’s interest rate hike is expected to increase in December, and it will continue to moderately raise interest rates next year. The dollar’s ​​strength is expected to continue to rise. "The dollar may continue to strengthen, which means that other countries and companies will need to pay more dollar debt, and may also have the impact of capital flows."
More and more countries use RMB to settle international trade, and the predictability of the RMB exchange rate is constantly improving.
Since 2015, the pace of RMB internationalization has been accelerating. At present, RMB offshore trading centers have been established in major financial centers around the world. More and more countries are using RMB settlement in international trade, and the predictability of RMB exchange rate is also increasing. .
“No one can ignore the huge market of China’s 1.3 billion people.†The UN Under-Secretary-General and Executive Secretary of the UN Economic and Social Commission for Asia and the Pacific, Shamshad Akhtar, believes that the internationalization of the renminbi is getting higher and higher. China's status in the international financial arena has been continuously improved. This increase in status has in turn continued to promote the internationalization of the RMB, which will also bring benefits to regional financial development.
"The Chinese government is actively building a domestic and overseas environment for the internationalization of the renminbi. The renminbi has met the conditions for becoming an international currency in many respects," said Jin Donghe, a professor at the Department of Chinese Studies at Busan University of Foreign Languages ​​in South Korea.
Carl Ludwig Tiller, executive director of the German Federal Bank, told this reporter that China has changed from a "world factory" to an active and innovative production country. With the increasingly open trade policy of the Chinese government, the renminbi is becoming more and more Many countries have included foreign exchange reserves, and the Deutsche Bundesbank has also included the renminbi in the reserve currency basket. “The internationalization of the renminbi is on the right track. We have been supporting the internationalization of the renminbi and will further increase our support in the future. This also shows that the future of the renminbi will be more regarded as an international currency, not just It is China’s national currency as a sovereign country,†he said.
(Reporter Brussels, Seoul, Berlin, Washington, Bangkok, December 12, reporters Wu Gang, Ma Fei, Feng Xueyu, Wang Rujun, Zhang Zhiwen)
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