China will orderly increase the capital account convertibility of renminbi, make cross-border investment and trade more convenient and promote effective allocation of resources across the globe to facilitate economic transformation and stabilize development, the People’s Bank of China pointed out in the 2017 RMB Internationalization report released on October 17.
The report notes that in 2016 China steadily advancing the RMB’s convertibility under capital account. China has carried out unified macro-prudential management of cross-border financing around the country; further facilitated foreign investors to use RMB to investment in interbank bond market and allowed more types of overseas institutions to issue RMB bond in domestic; streamline management for RMB qualified foreign institutional investors (QFIIs); optimized the Shanghai-Hong Kong stock connect program, cancelled restrictions on total quota and launched the Shenzhen-Hong Kong stock connect.
Currently as all the 40 capital accounts in 7 categories, Chinese currency is totally, basically or partially convertible under 37 capital accounts, accounting for 92.5 percent of all accounts.
The report notes that in 2017, RMB will be more widely used internationally, and the channels of use will further expand. The RMB internationalization will play a more active role in serving the real economy and promoting trade and investment facilitation.
RMB’s role as a payment currency will continue to enhance. As China's economy is improving with good momentum for growth, the RMB exchange rate formation mechanism is constantly improving and the policy framework for cross-border RMB business is optimizing, more and more market participants accept Chinese yuan for settlement. In coordination with the “Belt and Road” initiatives, the use of RMB in countries along the Belt and Road will also steadily expand.
Meanwhile, RMB’s role as investment currency will continue to deepen. With the increasing breadth and depth of the two-way opening of China's financial market and the further improvement of financial infrastructure, it will be more convenient for overseas institutions to participate in China's financial market. RMB cross-border financial transactions are expected to continue to grow.
RMB’s role as a reserve currency will gradually appear. As the RMB is included into the SDR currency basket, the international status of RMB will continue to improve. The international acceptance of RMB will continue to improve. Central banks and monetary authorities will become more willing to held RMB as reserve currency.
The report points out that bilateral monetary cooperation will continue to be carried out steadily. China’s cooperation with relevant central banks or monetary authorities will continue to strengthen. The bilateral currency exchange mechanism and bilateral currency settlement agreement will be further improved. Bilateral monetary cooperation will continue to play an active role in facilitating bilateral trade and investment and maintaining financial stability.
For infrastructure for RMB internationalization, the report said that with the construction of RMB cross-border payment system and the advancing of RMB clearing mechanism, the RMB clearing efficiency continues to improve and the cross-border clearing network continues to improve. The accounting standards, rating system and tax policies that are applicable for RMB cross-border use and the two-way opening of the financial market will also continue to improve.
(Translated by Coral Zhong)
The report notes that in 2016 China steadily advancing the RMB’s convertibility under capital account. China has carried out unified macro-prudential management of cross-border financing around the country; further facilitated foreign investors to use RMB to investment in interbank bond market and allowed more types of overseas institutions to issue RMB bond in domestic; streamline management for RMB qualified foreign institutional investors (QFIIs); optimized the Shanghai-Hong Kong stock connect program, cancelled restrictions on total quota and launched the Shenzhen-Hong Kong stock connect.
Currently as all the 40 capital accounts in 7 categories, Chinese currency is totally, basically or partially convertible under 37 capital accounts, accounting for 92.5 percent of all accounts.
The report notes that in 2017, RMB will be more widely used internationally, and the channels of use will further expand. The RMB internationalization will play a more active role in serving the real economy and promoting trade and investment facilitation.
RMB’s role as a payment currency will continue to enhance. As China's economy is improving with good momentum for growth, the RMB exchange rate formation mechanism is constantly improving and the policy framework for cross-border RMB business is optimizing, more and more market participants accept Chinese yuan for settlement. In coordination with the “Belt and Road” initiatives, the use of RMB in countries along the Belt and Road will also steadily expand.
Meanwhile, RMB’s role as investment currency will continue to deepen. With the increasing breadth and depth of the two-way opening of China's financial market and the further improvement of financial infrastructure, it will be more convenient for overseas institutions to participate in China's financial market. RMB cross-border financial transactions are expected to continue to grow.
RMB’s role as a reserve currency will gradually appear. As the RMB is included into the SDR currency basket, the international status of RMB will continue to improve. The international acceptance of RMB will continue to improve. Central banks and monetary authorities will become more willing to held RMB as reserve currency.
The report points out that bilateral monetary cooperation will continue to be carried out steadily. China’s cooperation with relevant central banks or monetary authorities will continue to strengthen. The bilateral currency exchange mechanism and bilateral currency settlement agreement will be further improved. Bilateral monetary cooperation will continue to play an active role in facilitating bilateral trade and investment and maintaining financial stability.
For infrastructure for RMB internationalization, the report said that with the construction of RMB cross-border payment system and the advancing of RMB clearing mechanism, the RMB clearing efficiency continues to improve and the cross-border clearing network continues to improve. The accounting standards, rating system and tax policies that are applicable for RMB cross-border use and the two-way opening of the financial market will also continue to improve.
(Translated by Coral Zhong)
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