Today's world is an open world, and any country, as long as it is a top-ranking family, will always have some international exchanges; No matter whether this kind of communication is economic, political, cultural or other, generally speaking, there will be payment between countries when there is communication, and there will be exchange between currencies when there is payment. Therefore, unless you lock up the country like an iron bucket and block the door to the sky, currency exchange is always inevitable.
Completely convertible currency may have existed in history, but it is definitely rare now, although it cannot be asserted that there is no currency. Convertibility under the more common current account. According to the uniform regulations of the International Monetary Fund (IMF), the trade balance should be recorded under the current account in the balance of payments. Therefore, the so-called convertibility under the current account mainly refers to foreign exchange that can be used for trade, and there is no convertibility restriction.
The highest realm of currency exchange is free exchange. That is, not only the current account is liberalized, but also the currency exchange under the capital account (such as international lending and investment) is free. In fact, this is equivalent to lifting the restrictions on international capital flows and realizing the liberalization of capital projects.
This kind of currency exchange seems quite complicated, but it is actually similar to the reason why farmers go to the city. Non-convertibility is equivalent to freezing our accounts and prohibiting farmers from moving; Convertibility under the current account is similar to the current policy, allowing farmers to enter the city, but it is necessary to ask about the situation and treat it differently: if you are visiting relatives and friends, or studying abroad for further study, of course there is no problem; If you go to work in the city, you will be subject to some restrictions, and sometimes you will even be sent back to your hometown as a "blind stream"; However, full convertibility represents the direction of household registration reform-canceling the boundary between urban residents and rural residents, allowing people to move freely, moving to the countryside after living in the city for a long time, moving to the city anywhere, and settling down.
Things are always so strange. The more difficult the economy is, the more uneasy people will be if you give them IOUs. Even if they don't wait for the money, they will chase you for debts every day. On the other hand, if you have deep pockets and can cash them at any time, others will be less anxious. For a country, this is not the case. When the country is weak and the people are poor, foreign exchange is scarce, so when it comes to restricting currency exchange, all countries do not buy it, and occasionally hold a little local currency, avoiding it for fear of hitting it. But when this country is "developed", it has the ability to promise: bring your local currency and I will change it for you at any time. You can choose which currency to exchange. At this time, the original "ugly duckling" will become "Little Swan". The currency of this country has doubled in value, and everyone likes it. All countries are willing to hold it and become an international currency. As long as you start the printing machine and print a few Arabic numerals on the paper, you can take it to the international market to buy things.
Due to the many advantages of free convertibility, RMB has been moving closer to internationalization in the past 20 years. 1980, China resumed its legal seat in the International Monetary Fund. At that time, our foreign exchange was always relatively small and the government was nervous, so we adopted Article 14 of the IMF Agreement. This is a transitional arrangement that allows us to retain the previous foreign exchange restrictions. 1994 is a milestone. This year, we successfully carried out the reform of the foreign exchange system and greatly improved the balance of payments. Therefore, we lost no time in speeding up the pace of foreign exchange liberalization and lifted all foreign exchange restrictions under the current account.
After that, many people were encouraged by the success of the foreign exchange system reform and suggested that the capital account should be liberalized as soon as possible to realize the free convertibility of RMB. 1998, the Asian financial crisis started with thunder, which scared people into a cold sweat. Let's put this topic aside for the time being. Until recently, the free convertibility of RMB has once again become a hot spot of public concern. So, what conditions need to be met to achieve free convertibility? On this issue, although there are different opinions, there are no consensus, but at least in the following three aspects, there are * * * insights.
The first is the free exchange rate. The abolition of exchange restrictions means the marketization of exchange rate determination. 1994,
The RMB exchange rate is indeed based on market supply and demand, but the government is still unwilling to let go and assume too many management responsibilities. So many people say that the RMB exchange rate is a bit too stable and does not match the economic trend. In the final analysis, the exchange rate reflects the supply and demand relationship between currencies. After the opening of capital account, the positioning of exchange rate will be considered in the world market. Therefore, once foreign exchange is settled freely, the exchange rate must be allowed to float completely.
Secondly, it has strong economic strength. Looking ahead, we need to have enough foreign exchange reserves to deal with some unexpected shocks. It's like living at home, having some money on hand, and being able to take it out in case of three disasters and eight difficulties. But one thing, if the domestic economy is not good,
Finally, there is a high level of supervision. After all, the international market is stormy, which can be a little calmer than we are now. There are cars ahead, roads behind, and the capital account is liberalized. If the supervision fails to keep up, there will be disastrous consequences like those in Southeast Asia in previous years.
The transition period of China's entry into WTO is coming, and the free convertibility of RMB is the general trend, which cannot and should not be avoided. But if we really want to take this step, it will not be a trivial matter. You have to think about it and weigh it again and again. Therefore, the government has been very cautious on this issue. It seems that in order to realize the full convertibility of RMB, we still have a lot to do in terms of improving comprehensive national strength and perfecting supervision.
(The writer is the director and professor of the Economics Department of China Central Party School. E-mail :wangdongjing@263.net)