(A) RMB internationalization to promote the reform of China's financial system.
It is of great significance for China that RMB becomes the global official reserve currency. This not only raised the international status of RMB to a new height, but also enhanced China's global reputation, and made RMB recognized by more countries. We really got rid of the dependence of RMB on the US dollar for many years, and China's economy was formally integrated into the global financial system. China will further promote financial reform, gradually liberalize capital account control, and realize the marketization of exchange rate and interest rate. The future RMB will not only belong to China, but also become a global currency with international responsibility.
(B) to promote the development of the national economy
RMB's entry into SDR will help to change the existing economic structure, further promote China's financial capital to go abroad, revitalize domestic sleeping capital and encourage foreign direct investment. With the implementation of the "Belt and Road" strategy, the internationalization of RMB has stimulated the demand of central banks in various countries, expanded the scope of use of RMB in international settlement, and further enhanced the international status of RMB. The internationalization of RMB makes the financial market more open and free. It is conducive to reducing the obstacles of multinational enterprises in international settlement and the cost of holding RMB by foreign residents, and enhancing the confidence and enthusiasm of countries around the world in using RMB; After RMB joins SDR, it can also enjoy the special preferential treatment of member countries. Any currency in the SDR basket can be used to pay the balance of payments deficit, which can simplify the examination and approval process of foreign trade enterprises, so that we can not only pay less seigniorage, but also get seigniorage income. It can accelerate China's integration into the global financial system, make the global external economic environment more conducive to China's economic development, and create a new pattern conducive to China countries' economic development.
(C) The globalization of RMB has promoted the development of China's export-oriented economy.
China is a big trading country in the world. According to relevant statistics, by the end of 20 14, 22% of China's total import and export volume was settled in RMB, and RMB has been included in foreign exchange reserves by about 30 central banks around the world. More use of RMB in international trade settlement can effectively avoid the adverse effects of exchange rate fluctuations caused by the use of US dollars and other currencies, so as to maximize the interests of trading enterprises and investors. The internationalization of RMB has increased the demand for RMB in the world's economies, which not only promoted the development of China's foreign trade, but also accelerated the steady development of the real economy and national economy.
Free convertibility of RMB, the risks and challenges faced by China's economy.
(A) RMB going abroad will lead to the occurrence of external hidden risks.
The internationalization of RMB will integrate China's economy into the international community, and the stability of China's financial economy will be impacted by the international financial market, especially with the flow of domestic and foreign capital, which will cause corresponding changes in interest rates and exchange rates and lead to greater fluctuations in international capital. What's more, international investors will take advantage of the deviation between exchange rate and interest rate for arbitrage, and the short-term flow of speculative capital will also have a negative impact on the stability of China's financial market. The RMB exchange rate fell to a record low in 20 15, reminding us that the road to financial system reform in the future will not be smooth.
(B) After the internationalization of RMB, China's macro-control will face challenges.
Renminbi flows in the international financial market in the form of global pricing currency, which will inevitably weaken the central bank's ability to control domestic RMB, inevitably lead to short-term RMB exchange rate fluctuation and currency instability, weaken the effectiveness of domestic monetary policy and affect the effect of macro-control. According to the theory of "Mundell's impossible trinity", in terms of financial policy, the free flow of capital, the stability of exchange rate and the independence of monetary policy cannot have both. Just like the dilemma we are facing at this stage, according to the conventional economic means, domestic inflation control needs to adopt a tight monetary policy to raise interest rates. Because it is difficult to control the inflow of money in the international financial market, the supply of RMB will increase, which will affect the implementation effect of monetary policy. The fluctuation of RMB exchange rate will affect the income of export enterprises, lose the overall interests of China's economy and adversely affect the domestic economy. In addition, the capital market is about to be liberalized, and international capital flows will also bring risks to China's economy. The inflow and outflow effect of domestic and foreign funds will disrupt the domestic money supply plan and bring fluctuations to the domestic capital price, and China will face unprecedented challenges. Will bring risks to China's financial system.
(C) Increase the difficulty of RMB fund management and monitoring, and the security of China's financial system will be tested.
Since 20 16, the global economic depression, accompanied by the Federal Reserve's interest rate hike and Britain's withdrawal from the European Union, has had a negative impact on the economic situation in the euro zone, Britain and the United States, leading to a serious economic downturn and shrouded the world finance. China is in a critical period of financial reform, and our experience in the international financial market game is not rich, so ensuring the security of the financial system has become the biggest problem at this stage. Joining SDR has brought about the liberalization of capital projects. According to the statistics of the central bank, the total amount of capital injection and capital outflow in China was flat in 20 15 years. With the improvement of RMB's "free use and convertibility", China will further relax the capital flow restrictions on individual overseas investment, securities trading and derivatives trading. According to the current performance of China's economy and the fact that the RMB exchange rate keeps falling, there have been price fluctuations in the domestic stock market and real estate market. The global wealth distribution of domestic investors has also aggravated the outflow of domestic capital. The cross-border movement of RMB cash will become a hotbed of illegal activities, and the stability of China's financial market will be challenged. Under the unfavorable situation of current economic turmoil, it is particularly difficult to crack down on counterfeiting and anti-money laundering. The risks brought by RMB internationalization make the economic policy and governance capacity of China government face unprecedented challenges.