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毕业论文网 > 外文翻译 > 经济学类 > 国际经济与贸易 > 正文


 2022-11-23 07:11  

Convertibility as a step for the RMB internationalization

The paper concentrates on the issue of currency convertibility in the context of Chinese strategy of the RMB internationalization. It argues that the motive for that strategy was ignited by Chinarsquo;s dissatisfaction with the long lasting unstable international monetary system. Recent global financial crisis intensified Chinarsquo;s urge to get rid of “dollar trap” and look for a diversified international reserve currency system where the Chinese yuan could take a place. The paper investigates the step-by-step approach from the trade settlement to more comprehensive policy measures. It also emphasizes the importance of domestic financial reforms for the RMB full convertibility, including flexible exchange rate, market determined interest rate and deepened domestic financial market.

1 What are the motives

Chinarsquo;s desire to have its currency internationalized was ignited by long lasting unbearable subsequences of unstable international monetary system. Recent global financial crisis intensified Chinarsquo;s urge to get rid of so called “dollar trap”. Among all the concerns, the followings are standing out.First of all, China, among many other Asian emerging economies, is subject to the so called “dollar standard”: the US dollar is dominantly used in Chinarsquo;s trade settlements and exchange rate currency basket, and as a major reserve currency. The dominance of US dollar is, of course, not an intention of the USrsquo;s policy. However, it has become a major source for excessive reserve accumulation in China where export-oriented strategy applied and weak and small domestic financial market existed in the past decades. That is what McKinnon described “conflicted virtue” (McKinnon and Schnabl 2004).Secondly, recent financial crisis placed China in a situation of huge potential capital loss. Whilst the world complaining Chinarsquo;s excessive saving for global imbalance, China is suffering shrinking value of its treasure which is mainly in the form of US treasury assets. By the end of June 2012, Chinarsquo;s foreign reserves reached to $3.24 trillion, of which over 30 % was held in the form of US dollar assets. China now has become the biggest dollar asset holder of the world .

2 A step-by-step approach

What is an international currency? An international currency should play the role of store of value, medium of exchange and unit of account for both residents and non-residents. The functions of an international currency can be divided into two categories: functions for private uses and for public uses. When it is used for public purposes, it is used as reserve currency, vehicle currency for intervention currency and an anchor. When it is used for private purposes, it is used for currency substitution, invoicing and denominating trade and financial transactions. This framework has been frequently used for analytical reference in several literatures, although there is an argument on the classification of functions. For instance, Chinn and Frankel (2005) and Gao and Yu (2009) have put invoicing trade and financial transactions under medium of exchange, whilst Ito (2011) arguing that it should be under unit of account. Kenen (2009) gave a comprehensive explanation from the perspective of capital account liberalization. He has concentrated the capital account opening as a crucial definition of currency internationalization.

The scope and scale of international use of the RMB is still limited, and is mainly facilitated by official agreements. For instance, for public purpose, the RMB is used in bilateral swaps between central banks; in swap lines under Asian liquidity supporting mechanism, the CMI; as a reserve currency for some central banks, including Nigeriarsquo;s, Thailandrsquo;s and Japanrsquo;s. For the private purpose, the RMB started being used in cross-border trade settlement, bank loans in HK, bond issuance in HK, equities in domestic market by qualified foreign institutional investors (QFIIs) and RMB QFIIs (RQFIIs) for Hong Kong subsidiaries of Mainland Chinese asset management securities brokers, outbound direct investment (ODI) and interbank bond market for authorized foreign central banks.

At current stage, the RMB is far from an international currency. However, the initial moves of the RMB internationalization reflect Chinarsquo;s strong policy ambition and a step-by-step approach.

Firstly, China began to use the RMB in crisis bailout. The very first RMB swap line was signed between the PBoC and the Bank of Korea in December 2008 when Korean financial firms faced severe liquidity shortage. In the following months, several more RMB swaps were signed between the PBoC and other central banks. As of June 2012, the PBoC has signed 19 RMB swap lines, amounted RMB 1.6862 trillion yuan, with other central banks and monetary authorities. Some recent swaps are not only used for liquidity support, but also for bilateral trade financing.

In order to achieve a goal set out in Chinarsquo;s 12th Five-year Plan (2011–2015), in March 2012, the Chinese government announced that all companies engaging in goods and service trade or other activities under the current account can choose to settle in the RMB. Therefore, all the restrictions on the RMB trade settlements have been eliminated.

Secondly, at initial stage, China concentrated on the use of the RMB at regional level in Asia. The major considera





中国希望其货币国际化是点燃了长久的难以忍受的子序列的不稳定的国际货币体系。最近的全球金融危机加剧中国急于摆脱所谓的“美元陷阱”。在所有的问题中,以下是最突出的。首先,在许多其他亚洲新兴经济体中,中国受到所谓“美元本位制”:美元是主要用于中国的贸易结算和汇率货币篮子,和作为主要储备货币的统治,当然,并不是美国的政策的意图。然而,它已经成为过度的外汇储备的主要来源在中国出口导向型战略应用和弱和小国内金融市场存在于过去几十年。这就是麦金农描述“矛盾美德”(麦金农和Schnabl 2004)。其次,最近的金融危机将中国巨大的潜在资本损失。同时世界抱怨中国对全球失衡的过度储蓄,中国正在遭受缩减其宝藏价值主要以美国国债的形式的资产。到2012年6月底,中国的外汇储备达到3.24万亿美元,其中超过30%以美元资产的形式举行。中国现在已成为世界上最大的美元资产持有者。





















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