Song Hai: RMB Should Be Freely Convertible In 2020.

Song Hai is a man with stories.

From the corps soldiers to Spanish, from the Chinese Academy of Sciences in desert management, to bankers, to political circles, to the Dean, professors and doctoral tutors of the school of economics and trade of South China University of Technology, all of them have made brilliant achievements.

As a senior political figure, song Hai still does not change the true colors of scholars. He has been writing and writing all the time. He has more than 100 volumes, and has over 360 words, plations and essays.

Its monograph "RMB exchange rate system reform and internationalization" and "the choice of China's exchange rate system" have a wide impact on related fields.

Although I did the administrative work in 14th Five-Year, my interest in the research has not dropped, especially the issue of RMB exchange rate reform and the internationalization of RMB.

From 2003 to 2011, I was the vice governor of Guangdong, in charge of education and finance.

When the people's Bank of China launched the pilot scheme for cross border trade settlement in 2009, I had been fighting for Guangdong, and I finally succeeded.

At present, the RMB cross-border trade settlement pilot has been carried out smoothly, but the RMB mainly plays the role of settlement in the world, and is rarely used as reserve currency.

In the later practice, there are more complicated factors.

As we all know, China's current capital account is controlled, and RMB cross-border trade settlement involves both current account and capital account.

Therefore, how to promote the internationalization of RMB under the control of capital account is an important issue.

Now the theorists have also suggested that this is equivalent to pforming the highly efficient things we have done with foreign countries and giving others the benefits of their reform, which is also difficult to accept in my mind.

China's economy now ranks second in the world. Historically, as the second largest economy in the world, its currency must be internationalized to match its economic status.

In addition, over the past 30 years since China's reform and opening up, it has been pursuing an export oriented foreign trade policy. Now it has accumulated about US $4 trillion in foreign exchange reserves. However, so many foreign exchange reserves have not played a good role, and have caused a great burden to our country. The fundamental reason is that the status of RMB is not high.

This is my two starting point for studying RMB exchange rate reform and RMB internationalization.

The marketization of RMB exchange rate and the internationalization of RMB are a long-term process. They can be carried out at the same time and complement each other.

If China wants to be an economic power and a big capital country, its sovereign currency can not be regarded as an international currency.

The United States has always said that the exchange rate between the RMB and the US dollar has led to trade imbalance between China and the United States. The US trade deficit is caused by China. This is totally against the fact, which is mainly caused by the US itself. For example, the United States prohibits the export of high-tech products to China.

In addition, the reason why a sovereign currency of a country can become an international currency (especially when it is the reserve currency of other countries) is because the country buys goods from other countries with its own currency. The country gets the goods and the other side gets the money, otherwise it can not meet the needs of the countries in the world for the US dollar.

This is the case between China and the United States. The United States buys us goods with us dollars and our country gets us dollars. Then the US is bound to be a trade deficit and China must be in surplus.

Therefore, the United States accuses US of being cheap and selling well, but we did not make good use of this point during negotiations. No one has now come to the conclusion that the US trade deficit is precisely due to the high internationalization of the US dollar, and it is not for other reasons.

In the future, when RMB is truly internationalized, we must no longer insist on an export oriented foreign trade policy.

Because once the RMB is internationalized, it must be the thing that we buy other people's goods with RMB. At that time, China's foreign exchange reserves will be reduced, so it is imperative to solve the problem of RMB internationalization.

Song Hai: at present, the most controversial issue in the theory field is the sorting of RMB internationalization and RMB exchange rate market reform. The essence of this problem is to speed up the relationship between capital account liberalization and RMB exchange rate reform.

In the past few years, the measures taken by the government to promote capital account liberalization are related to measures to promote the internationalization of RMB.

Some people believe that under the condition that the RMB exchange rate mechanism has not yet been fully marketed, the RMB cross-border trade settlement and the development of offshore RMB market can be pushed forward too quickly. As a result, China will use the high efficiency RMB assets to replace the low yield foreign currency assets, which will cause great problems in the future. Therefore, the exchange rate system reform and the interest rate marketization should be better than the internationalization of RMB. Otherwise, the price distortion will lead to the internationalization of RMB and the result will not match the target.

Now it seems that the development of RMB internationalization is relatively fast, and free convertibility should be achieved by 2020.

Some people believe that in the current environment, a significant appreciation of the renminbi can not be achieved in a single step. The marketization of RMB exchange rate and the internationalization of RMB are a long-term process, which can be carried out at the same time and complement each other.

If the exchange rate is completely marketed, the RMB will be restarted.

The process may lose the opportunity for reform.

For RMB

On the question of marketization and the ordering of RMB internationalization, my view is that the two should be carried out at the same time, complement each other, and even use the internationalization of RMB to promote the convertibility of capital account.

First, once

If the market reaches a certain scale, whether the price of offshore market will impact on the price of the onshore market depends on the Chinese government's control over RMB clearing mechanism and reflux mechanism in offshore market.

Even if we are to create a series of new exchange rate mechanisms, we must set up some anti cyclical automatic stabilizers in this mechanism.

Second, the top priority of the Chinese government is to use the external pressure brought about by the global financial crisis as soon as possible to pform the growth pattern from investment and export drive to consumption driven. In the adjustment process of the growth mode structure, the marketization of interest rate and exchange rate will play a key role.

The Chinese government should realize the marketization of interest rate and exchange rate as soon as possible.

Third, according to international experience, proper capital account control is a way to deal with the international financial crisis. Therefore, the Chinese government should grasp the balance between RMB internationalization and capital account control.

There is no precise definition of capital account convertibility in the world. Only the International Monetary Fund has 44 relevant provisions. Now the people's Bank of China has reached more than 30 standards, and the remaining ten are not all liberalized. We can make some balance in it. The internationalization of RMB should not be based on the ups and downs of China's financial system.

Now the central bank has done a lot of useful work, such as currency swap with many countries, which will certainly promote the process of RMB internationalization. It also shows that our policy is open from the side.

Through the currency swap between countries, the internationalization of RMB has been opened in the Intergovernmental channel.

Therefore, the development of RMB internationalization is relatively fast now. It should be possible to achieve free convertibility by 2020.