Britain Has A Positive Influence On The Internationalization Of RMB.

In June 24th, the United Kingdom announced the final outcome of the referendum on "off Europe": Britain left the EU.

As economists predict, Britain's panic from the European Union has led to a decline in European, North American and Asian stock markets, and the global market evaporated by nearly $3 trillion, which could lead to a decline in the UK and even the entire European Union.

However, optimistic economists believe that the UK's long term economic outlook, apart from the short market fluctuations, is still optimistic, and will better control Britain's trade policy, especially in terms of national attractiveness and foreign direct investment.

My basic view is also similar.

Some domestic financial experts believe that the RMB exchange rate is going to depreciate sharply due to the over issuance of RMB, while many financial experts in Europe and the United States believe that with the decline in the security of the US dollar and the sustained and rapid development of China's economy, the status of the renminbi will finally become an international currency, like the euro, the pound and the yen, and even become equal to the US dollar and become the global "reserve currency".

I share the same view with the latter.

This is just like the central bank governor Zhou Xiaochuan pointed out recently: "the next RMB exchange rate system should meet the higher requirements of the market economy, that is, more flexible exchange rate, current account and capital account.

More free, foreign currency exchange is more convenient, and can provide risk management tools for domestic and foreign investors. "

In any case, Britain's departure from the EU not only determines the fate of the EU as a whole, but also has a certain impact on Sino British Relations and even China EU relations.

Some economists in China are worried that China's strategic plan to strengthen cooperation with the EU through Britain may become more difficult and indirectly break the invisible ties of cooperation between China and the EU.

And once

Tending to adopt a trade protection policy will affect bilateral trade between China and Europe, so that China will have to tighten its cooperation with the European Union in other ways, so that the foreshadowing of various trade policies in the early stages will be greatly affected and become a high sunk cost, which will probably affect China's exports.

In the short term, due to the recent slowdown in China's economy, the EU as China's main trading partner, a smaller, more unstable and slowing market demand in Europe, and the temporary chaos of the European Union may have a negative impact on China's exports.

However, adopting trade protection measures will be harmful to either side.

In the medium to long term,

Economically and politically, it is beneficial to China's rise on the world stage, because the competitive advantage of the divided EU and the UK and China is relatively weakened, giving China the chance to replace the EU and become the second largest country in the new world economic order.

Similarly, China will gain further marginal trade agreements with the weakened EU and the UK. The pound will become less important. The renminbi will become an increasingly important international currency. If China can achieve stable macroeconomic growth and low inflation, the renminbi will be widely used in the global financial market.

For example, in the day when the United Kingdom declared "off Europe", in June 24th, authorized by the people's Bank of China, the China Foreign Exchange Trading Center announced that the Renminbi should be traded directly in the interbank foreign exchange market.

This is an important move for China and South Korea to push forward bilateral economic and trade relations and further development.

Although the RMB exchange rate has left the European Union after the UK's departure from the European Union, the appreciation of the US dollar has been driven by the depreciation of the pound.

In fact, the financial sector has already formed two polar views on the issue of RMB exchange rate.

Therefore, the problem of the RMB is not only the high or low of the exchange rate, but also the credit behind it.

In the process of internationalization of RMB, the fluctuation of exchange rate fluctuates, just as the dollar, pound and yen have gone up and down.

The real strength of the renminbi will depend on the real strength of the Chinese economy and eventually become a strong convertible credit currency.