RMB is expected to to achieve full convertibility within 5 years

RMB is expected to to achieve full convertibility within 5 years

HSBC chief China economist Qu Hongbin, 18, predicted in a media conference call, combined with China to open direct investment inflows and outflows, the RMB is expected within five years to achieve full convertibility.

RMB to become a global currency, the need to achieve full convertibility. Said Qu Hongbin, to achieve this goal, and now the domestic conditions have gradually matured. China's trade imbalance has been to improve the RMB exchange rate is also getting closer to a balanced level.

The new Chinese government to accelerate financial reform, and promote China's interest rate market, improve the depth and breadth of the domestic financial market, which will provide RMB convertibility prerequisite.

HSBC offers data show that 900 international financial institutions to carry out RMB business in June 2011; Today, that figure has more than ten thousand. Three years ago before the establishment of offshore RMB funds pool has reached nearly 900 billion yuan (about 143 billion U.S. dollars) in the modern scale. Chinese RMB settlement of import and export volume has increased by nearly six times, accounting for 12% of the total import and export volume.

Qu Hongbin said the process of internationalization of the RMB beyond the expected, and will accelerate in the future. He forecast to 2015, 30% of China's trade volume will be RMB settlement, which will allow the yuan to become one of the three global trade settlement currency.

In addition, the strong growth of the offshore RMB market will further promote the process of internationalization of the RMB. Offshore RMB market started in 2010 and 2012, its liquidity has surged by 2.5 times. Hong Kong has become a real offshore RMB center, has recently approved the establishment of the RMB clearing bank in China, Taiwan and Singapore, the emerging offshore center is taking shape.

Of course, China's bond market relative to the stock market is still quite backward, certain constraints on the internationalization of the RMB. Qu Hongbin said that the development of multi-level capital market can be an effective solution to the problem of local financing. The urgent needs of the local government on infrastructure projects, is also likely to stimulate further expansion of the bond market.

In talking about the risks that may be encountered in the process of internationalization of the RMB, Qu Hongbin answer the Xinhua News Agency, told reporters, because the existence of the domestic market and the offshore market, may generate arbitrage opportunities, and increase the risk of speculation. However, the internationalization of the RMB will help improve China's role in international trade and status, is conducive to domestic enterprises to open up the market to reduce the exchange rate risk, in the long run than harm.

To build China's economic role of the upgraded version of the process of internationalization of the RMB, said Qu Hongbin, RMB internationalization could start for China and other countries, especially in trade and investment in emerging countries, in order to facilitate cross-border investment; Second, Chinese enterprises can make to compete in a more equitable environment, promote business transformation, improve the competitive advantage of Chinese enterprises.