For a long time, many people were excited to see the news of which country settled in RMB. In fact, China's foreign trade was settled in RMB a long time ago.
1950 12, the United States froze China's assets in the United States, China's import and export trade, and began to stop using US dollars and start using British pounds.
Of course, doing business with the big brother of the Soviet Union uses rubles.
1967, the pound depreciated sharply. In order to reduce risks, Bank of China began to use RMB for settlement in Hong Kong and Macao on 1968.
In other words, the goods are denominated in RMB and the currency is settled in RMB, but the RMB is still not allowed to be taken out of the country.
Until 1976.
In July 2009, six ministries and commissions issued the Administrative Measures for Cross-border RMB Settlement, which started the formal process of RMB internationalization.
20 15, AIIB was established.
International Fund approves RMB to join SDR.
20 10-20 15, RMB internationalization has been rapidly promoted, and one third of cross-border trade settlement is in RMB.
After the 20 15 stock market rose sharply, the capital entered the property market, and the house price began to rise sharply, eating up the room for capital adjustment, and the labor cost and operating cost rose, making the real economy divorced from reality.
20 16 the exchange rate of onshore and offshore RMB against the US dollar declined. In order to reduce the total amount of RMB abroad, foreign exchange control was introduced.
Subsequently, the process of RMB internationalization entered a silent period.
In 2020, the global situation is becoming increasingly severe, especially the external financial game.
On July 30th, at the high-level meeting, the new ideas of China's economic development in the next few years were determined, and the development pattern of domestic and international double circulation promoting each other was emphasized, which will affect the future economic trend of China.
At the same time, the US dollar index fell by 4. 1% in July, the biggest monthly decline since September 20 10.
For a time, many media bearish on the US dollar, saying that the US dollar faces the risk of losing its reserve currency status.
At this time, China released some special signals.
First, release the signal.
On August 3, the central bank held a working conference in the second half of 2020, demanding a three-year battle to prevent and resolve major financial risks. Actively and steadily promote RMB internationalization and capital account convertibility.
On August 9th, Yi Gang, governor of the central bank, said: The central bank will continue to actively and steadily promote the internationalization of RMB.
On August 13, the central bank successfully issued 30 billion yuan of central bank bills in China Mainland and Hongkong.
On August 14, the Central Bank's Report on RMB Internationalization in 2020 continued to express its steady progress in RMB internationalization.
At the 2020 International Monetary Forum, the vice mayor of Shanghai, Xiao Wu, said that Shanghai will further play its role as an international financial center and promote the internationalization of RMB.
Wang Zhaoxing, former vice chairman of China Banking and Insurance Regulatory Commission, said: To build the core competitiveness of China's finance, it is necessary to further accelerate and promote the internationalization of RMB.
Tu Yonghong, Institute of International Monetary Studies, Renmin University of China, said: Four key points will accelerate the internationalization of RMB.
China's four major banks, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank, have tested the application of digital RMB wallets on a large scale in many places across the country to prepare for the formal and comprehensive landing of digital currency.
On August 3rd, China Foreign Exchange Trading Center said that the transaction fee of RMB against Singapore dollar, ruble, Malaysian ringgit, New Zealand dollar, South African rand, Saudi riyal, UAE dirham, Korean won, Thai baht and other 12 currencies will be temporarily exempted.
From August 7, 2020, the euro-capital settlement route of RMB foreign exchange spot auction transaction clearing business will change.
The three major mines in the world-Brazil's Vale, Australia's Rio Tinto and BHP Billiton-are partially settled in RMB.
China has been buying gold as a reserve. At the end of May 2020, China's gold reserve was 1948 tons, making it the fifth largest gold holder in the world, preparing for the internationalization of RMB.
The centralized introduction of policies also implies that RMB internationalization will be a new trend and an important driving force for China's economy in the future.
China is the second largest economy in the world, with the largest trade surplus and the largest foreign exchange reserves. As a currency, RMB should become a strong currency in the world.
However, in fact, the international status of RMB lags far behind that of China.
There are two main points about the position of money in the world:
1. The proportion of payment in international transaction settlement.
Second: the proportion of foreign exchange reserves in various countries.
According to the SWIFT report, in May 2020, the market share of RMB international payment was only 1.79%, ranking sixth in the world. Because of Hong Kong, the actual international market share will be even lower, hovering around 2% for many years.
International payments in US dollars accounted for 43.37%, 26 times that of RMB.
In terms of foreign reserves, by the end of 20 19, among the foreign exchange reserves of all countries in the world, the US dollar accounted for 60%, the euro for 20%, the pound for 5%, and the RMB only accounted for about 1.96%.
In 20 19, China ranked eighth in the world in foreign exchange trading volume.
China certainly hopes that the status of RMB will become higher and higher. Many people think that while the dollar is falling, they want to kill you while you are sick and replace the dollar.
Then, why is the proportion of RMB so low when China is already a big country?
Can it become a global currency like the dollar?
Second, the restrictive factors
To become a real international currency, there are four criteria.
1. Currency, valuation
Many people say that as long as China's military strength is strong and there are many planes and cannons, the RMB will be strong.
Then, once the Soviet Union's military strength was very strong, why did people all over the world not want rubles?
One of the factors of internationalization is that the currency should be stable, widely recognized and accepted by the international market, so that the world has high confidence in the currency, so that others can feel that your economy and market are stable, so that others can trust you and be able to value assets with your currency.
With the support of currency value, the world will treat your currency as a valuation currency and a reserve currency, and as an investment.
In the eyes of many people in the world, the RMB is not an asset, but a central bank debt. Therefore, the RMB should still anchor the US dollar, take the US dollar as the main foreign exchange reserve and buy US debt.
In addition, if you want other countries to recognize your currency status, your currency should be a safe-haven investment in times of global fluctuation and crisis.
For example, the subprime mortgage crisis swept the world in 2008, but after the crisis, the dollar not only did not fall, but actually became stronger. Why?
At present, the US dollar is printing money indefinitely, and the world is oversupplied, making the world pay the bill, but countries will still choose the US dollar as a safe-haven product and reserve currency. Why?
Because countries have confidence in the dollar, or must have confidence, because the dollar has plummeted, many countries will cry for their parents.
2. Foreign exchange settlement of transactions
One of the important conditions for RMB internationalization is whether all countries in the world are willing to use RMB for transaction settlement and whether RMB can be widely circulated around the world.
In short, it is whether RMB can bring convenience, make people like to use RMB, and whether it can be exchanged globally.
But now, holding RMB can only be consumed at home.
Because of the need to ensure the stability of the exchange rate, the RMB is not freely convertible like an international currency. The RMB flowing into the international market is very limited, and the exchange procedures are complicated and the cost is high.
Because of the trade deficit, the United States has a large amount of dollars in the hands of countries around the world, which is an important prerequisite for becoming a global currency.
China is a big manufacturing country, because it produces low-end goods for a long time, which leads to a trade deficit. It sells its own things to get other people's money back, and the liquidity of RMB is becoming more and more limited.
In terms of convenience, foreign companies and overseas institutions want to invest in China, and most of them need US dollars as an intermediary, and they need to settle foreign exchange in RMB for the second time, which leads to high handling fees and increased costs.
3. Financial and economic development and degree of opening to the outside world
China's economy is not open enough.
To become an international currency, finance and markets must be open, but many industries in China still have access restrictions.
Therefore, many cross-border down payment behaviors occur in Hong Kong, and mainland foreign trade enterprises must remit RMB to Hong Kong first, and then convert it into foreign currency for external payment.
International trading enterprises and financial institutions should also remit foreign currency to Hong Kong first, and then change it into RMB for trade payment and investment.
Although the central bank has introduced direct exchange of some currencies, at the specific operational level, the transaction scale is still limited.
Step 4 combine
The reason why the dollar flows around the world and its value is recognized by all countries is because the whole world is buying American bonds, and the size of the RMB bond market is far from enough.
In the future, the game between China and the United States will be played in five battlefields, namely:
Made in China
the Belt and Road
RMB internationalization
Online finance
5G industry
With the intensification of global economic competition, the contest in the international financial field is becoming more and more complicated, and the financial confrontation among big countries is becoming more and more obvious.
Currency, that is, power game, internationalization of RMB, will become an important driving force of future economy with high probability.