波多野结衣办公室双飞_制服 丝袜 综合 日韩 欧美_网站永久看片免费_欧美一级片在线免费观看_免费视频91蜜桃_精产国品一区二区三区_97超碰免费在线观看_欧美做受喷浆在线观看_国产熟妇搡bbbb搡bbbb_麻豆精品国产传媒

Global EditionASIA 中文雙語Fran?ais
Business
Home / Business / Finance

Investment abroad, export of capital will be the key to yuan outflows

By Zhang Yimin | China Daily | Updated: 2019-09-23 09:40
Share
Share - WeChat
[Photo/VCG]

On Aug 5, Chinese currency renminbi (RMB) breached the 7-yuan-per-1 dollar mark in both onshore and offshore forex markets for the first time since the 2015 exchange rate reform.

What exactly does this indicate?

As early as the beginning of this year, at the CEIBS Financial Management Salon, I made it clear that like in the stock market, where volatility is the norm, the RMB volatility is the norm in the foreign exchange market. "There is no need to panic over the RMB breaching the 7-yuan-per-dollar threshold," I said at the event.

According to the country's balance of payments, China has enjoyed many years' of trade surplus (that is, exports were larger than imports) and capital account surplus, which have helped it to build massive foreign exchange reserves.

This leads to a fundamental question: Is it a case of "more is better "when it comes to foreign exchange reserves? The answer is no.

Let's look at it from a monetary policy perspective.

The most important component of any monetary policy is money supply. In the graph alongside, the red line represents China's economic growth, and the blue one shows China's money supply. We can see that the blue line is significantly above the red one. This phenomenon is called an excess supply of money.

So, has the People's Bank of China put more money on the market than is needed? No. As a penny of collateral corresponds to the same amount of money, more collateral naturally means more money supplied. It just means that we have more collateral. Where does the collateral come from? Obviously, the bulk of it is in foreign exchange reserves.

Under the previous monetary policy, China's money supply was largely based on the amount of foreign exchange reserves it had. As the amount of RMB put on the market was largely dependent on dollar inflows and outflows, the PBOC's power over money supply was effectively controlled by the US Fed.

In this sense, the yuan was not an independent currency, but a "sub-currency" affiliated to the dollar. Obviously, this was not helpful for the internationalization of the renminbi. To reform the money supply system, China had to eliminate its reliance on the yuan funds outstanding for foreign exchange.

In 2015, the PBOC introduced a new mechanism called "commercial bank credit asset collateral", under which the central bank allows commercial banks to use credit asset collateral to re-lend. Financial institutions have more wiggle room with lending, and their loan business is expected to grow bigger and more significant.

What comes to mind when you hear the RMB exchange rate? The first thing you think of might be 6.9 or 6.8. That's the dollar exchange rate against the yuan, not the RMB exchange rate as we know it.

This misconception is due to the fact that the renminbi was pegged to the dollar for a long period of time. You might wonder what the dollar exchange rate is. In fact, the dollar exchange rate is called the "dollar index", a measure of the value of the dollar relative to a basket of foreign currencies. As this basket does not contain the renminbi, the yuan does not have equal status relative to the dollar.

The RMB index stood at 100 at the end of 2014, and five years on, it is now around 95 or 96. We can see that although the yuan has slipped past 7 to the dollar, the RMB index has remained stable, with only a slight decline.

As the RMB index is a measure of the yuan's exchange rate against a basket of its peers, and as the strength of the dollar means varying degrees of weakness of a basket of currencies, the RMB index is lower naturally.

In the past, the yuan was pegged only to the dollar. That's why, people thought of the yuan/dollar exchange rate when they heard the renminbi exchange rate. In its exchange rate policy reform, the PBOC pegged the yuan to a basket of currencies.

As a result, the yuan/dollar exchange rate is no longer fixed, but is a floating one. So, it is worth reiterating here: Like in the stock market, where volatility is the norm, the yuan volatility is the norm in the foreign exchange market. There is no need to make a fuss about the yuan breaching 7.0.

We've heard a lot about the need to internationalize the RMB. What is an international currency like? The dollar is an international currency, and how does it circulate around the world?

The US trade deficit with trading partners is a major cause of outflows of dollars, while in the US Treasury market, the world's largest financial market with massive inflows and outflows of dollars, there are substantial foreign holdings of US government debt denominated in US dollars.

In addition, international trade in oil and commodities is also settled in dollars, serving as the final link in the global circulation cycle of the dollar.

But there is yet to be such a cycle for the yuan.

First of all, China is a trade surplus country. More goods are exported than imported, resulting in net inflows of the renminbi from overseas.

Second of all, China inbound investment has always exceeded outbound investment, meaning that inflows of the yuan are greater than outflows. So, in order to turn the renminbi into a global currency, China has to create a global circulation cycle, and the key lies in opening up new capital accounts.

Last year marks the 40th anniversary of China's reform and opening-up. Having successfully upgraded itself from a labor-intensive economy to a capital-intensive economy, China should start to export capital overseas according to the principle of comparative advantage.

China's capital intensity ratio was 1 percent in 2001, and as of 2016, it was 18 percent, marking an 18-fold growth. Now, with overcapacity, and excess inventory and capital, China should go global supported by capital accounts, facilitating outflows of the renminbi through overseas investment and export of capital. Meanwhile, China should bring back the renminbi by exporting industrial products. Then, a full circulation cycle of the yuan will be completed.

On the international level, there are two pillars underpinning the renminbi's internationalization. The first is the creditworthiness of China as the world's second-largest economy; and the second is China's gold reserves. As well as foreign exchange reserves, central banks are also major holders of gold and other securities. The PBOC has built up vast gold reserves, which are of great significance to the internationalization of the renminbi.

Businesses investing overseas may not be fully appreciative of the risks related to cross-border investment - including political, regulatory, market, foreign exchange, and legal compliance risks - but financial institutions as service providers for businesses must be fully prepared to mitigate such risks as they go global themselves.

Zhang Yimin is a professor of finance at the China Europe International Business School (CEIBS).

Top
BACK TO THE TOP
English
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US
CLOSE
 
波多野结衣办公室双飞_制服 丝袜 综合 日韩 欧美_网站永久看片免费_欧美一级片在线免费观看_免费视频91蜜桃_精产国品一区二区三区_97超碰免费在线观看_欧美做受喷浆在线观看_国产熟妇搡bbbb搡bbbb_麻豆精品国产传媒
亚洲青青青在线视频| eeuss鲁片一区二区三区| 国产性生活毛片| 欧美天堂亚洲电影院在线播放| 国产精品免费丝袜| 国产成人免费网站| 娇妻被老王脔到高潮失禁视频| 日韩欧美一级二级三级久久久| 日日嗨av一区二区三区四区| 国产精品麻豆入口| 欧美一区二区精品在线| 日本中文字幕一区二区视频| 欧美熟妇一区二区| 亚洲精品一区二区三区四区高清| 九色综合国产一区二区三区| 国产精品天天干| 国产欧美一区二区精品秋霞影院| 国产伦精品一区二区三区视频青涩| 国产又粗又猛又爽又黄的视频四季 | 一区二区三区成人| 中文字幕亚洲日本| 7878成人国产在线观看| 日韩av一区二区在线影视| 久久无码人妻精品一区二区三区| 欧美r级电影在线观看| 国产毛片精品视频| 91日韩中文字幕| 亚洲女人的天堂| 亚洲午夜久久久久久久久| 欧美一区二区视频观看视频| 欧美男人的天堂一二区| 日本亚洲电影天堂| 欧美精品日韩在线| 亚洲欧洲国产日本综合| 亚洲黄色小说在线观看| 欧美一级视频精品观看| 黄色精品一二区| 国产少妇在线观看| 亚洲成人av一区二区| 三上悠亚影音先锋| 国产精品日韩成人| 老熟女高潮一区二区三区| 日韩精品最新网址| 国产成人av电影在线播放| 欧美性做爰猛烈叫床潮| 日本在线不卡视频| 国产精品三区在线观看| 亚洲一区二区三区免费视频| av在线网站观看| 国产精品福利在线播放| 超碰caoprom| 国产日韩欧美一区二区三区乱码| 99免费精品在线| 日韩欧美在线影院| 成人精品国产一区二区4080| 555夜色666亚洲国产免| 国产精品中文字幕欧美| 欧美日韩久久一区| 国产一区视频在线看| 日本韩国一区二区| 麻豆精品视频在线| 91福利视频久久久久| 免费成人你懂的| 色综合久久综合中文综合网| 日韩极品在线观看| 色综合久久久久| 裸体一区二区三区| 欧美在线免费播放| 国产一区二区美女诱惑| 欧美精品丝袜中出| 成人免费va视频| 日韩美女天天操| 精品国产午夜福利在线观看| 久久色在线观看| 成人欧美精品一区二区| 中文字幕巨乱亚洲| 国产男女猛烈无遮挡a片漫画| 亚洲视频一区二区免费在线观看| 3d动漫精品啪啪一区二区下载| 最新国产成人在线观看| 五月天综合视频| 亚洲五月六月丁香激情| 成人免费黄色小视频| 久久精品国产免费看久久精品| 在线观看日韩国产| 国产成人8x视频一区二区| 日韩欧美国产高清| 亚洲成人精品在线播放| 中文字幕在线观看一区| 欧美人与性囗牲恔配| 亚洲一区二区综合| 在线免费日韩av| 国产麻豆成人传媒免费观看| 日韩一级完整毛片| 久久久久久久久久久久国产精品| 中文字幕在线观看不卡视频| 亚洲毛片亚洲毛片亚洲毛片| 日本欧美大码aⅴ在线播放| 欧美视频在线一区| 91在线云播放| 国产精品灌醉下药二区| 国产精品18在线| 久久99国产精品麻豆| 日韩视频免费观看高清完整版| 巨乳女教师的诱惑| 综合亚洲深深色噜噜狠狠网站| 国精产品视频一二二区| 久久国产精品99久久人人澡| 日韩一区二区视频| 亚洲av成人片无码| 亚洲va韩国va欧美va精品 | 国产成人综合在线视频| 国产精品一区二区免费不卡| 26uuu国产电影一区二区| 一级做a爰片毛片| 日本不卡高清视频| 日韩一级免费一区| 激情综合丁香五月| 日韩av在线播放中文字幕| 91麻豆精品国产91| yy1111111| 日韩av一级片| 欧美成人一区二区| 一道本在线观看| 精品一区二区在线视频| 久久午夜羞羞影院免费观看| 欧美黄色一级生活片| 久久精品国产秦先生| 久久久噜噜噜久噜久久综合| 色噜噜噜噜噜噜| 国产福利不卡视频| 国产亚洲一本大道中文在线| 女人裸体性做爰全过| 国产成人午夜精品影院观看视频| 国产欧美精品日韩区二区麻豆天美| 久久精品国产亚洲AV成人婷婷| 国产一区二区三区国产| 欧美激情综合五月色丁香 | 亚洲欧洲中文日韩久久av乱码| 亚洲av鲁丝一区二区三区| 97久久人人超碰| 亚洲自拍偷拍综合| 日韩一区二区三区三四区视频在线观看| 亚洲天堂美女视频| 久久精品国产免费看久久精品| 国产无一区二区| 国产精品久久久久久久精| 94色蜜桃网一区二区三区| 亚洲国产欧美在线人成| 日韩欧美另类在线| 91香蕉视频污在线观看| www.一区二区| 亚洲va在线va天堂| 久久亚区不卡日本| 午夜少妇久久久久久久久| 亚洲成年人在线观看| 蜜臀av性久久久久蜜臀aⅴ四虎| 久久久久亚洲综合| 色综合天天综合| 国产麻豆剧传媒精品国产av| 久久精品国产网站| 最新国产の精品合集bt伙计| 欧美精品精品一区| 夫妇交换中文字幕| 91麻豆精品视频| 免费成人在线视频观看| 中文字幕欧美国产| 欧美日产在线观看| 免费黄在线观看| 丰满少妇中文字幕| 久久国产精品72免费观看| 综合电影一区二区三区| 日韩欧美在线观看一区二区三区| 自拍偷拍第9页| 精品无码av一区二区三区| 狠狠色综合播放一区二区| 亚洲人吸女人奶水| 欧美不卡在线视频| 日本精品一区二区三区高清| 蜜桃精品成人影片| av综合在线播放| 美女脱光内衣内裤视频久久影院| 国产精品二三区| 日韩一区二区免费视频| 国产成人综合在线视频| 一本色道综合久久欧美日韩精品| 国产91精品免费| 日韩av网站在线观看| 1024国产精品| 久久只精品国产| 欧美日韩国产一级片| 国产wwwwxxxx| 制服丝袜第二页| 99久久国产综合精品麻豆| 久久99精品国产麻豆婷婷| 一区二区在线观看av| 国产日韩欧美a| 欧美一区二区精品在线| 色狠狠色噜噜噜综合网| 蜜臀久久99精品久久久久久|