Time：2017-05-07 11:07:41
CollectionOn May 7, hosted by the Huaxia Institute of New Supply Economics and China’s New Supply Economics Forum, and organized by the Daily Economic News, Every Think Tank, and CITIC Publishing Group, The seminar of “Chin’s Economic Real Problems”was held in Beijing.
Yao Yudong, chief economist of Dacheng Fund and former director of the People's Bank of China Institute of Finance, pointed out at the seminar that the global liquidity cycle will eventually be insufficient, and the dominant currency will eventually be appreciated. The so-called dominant currency is the international currency.
Yao Yudong said that the yen appears to be a rising trend, but the Japanese real economy is relatively bad. So as long as it is an international currency, it will become less and less connected with the real economy of the country and even run counter to it.
“International currency is less dependent on foreign countries than non-international currency issuers. When everyone is good, they all need the international currency. When the international crisis occurs, they take international currency to hedge their risks. Therefore, both sides are stable.”He also pointed out that the international currency itself also reduced the need for external storage.
Regarding the RMB, Yao Yudong’s assessment is that “The sea is flowing in the sea and Fang Xianying is a hero."
Yao Yudong pointed out that since going through the international financial crisis, the RMB has only slightly depreciated against the US dollar, but it has been rising for the most part, and the RMB basket is generally relatively stable.
"Why is it so? Why Brazil and Russia are unable to live, why is the RMB “willful”? Yao Yudong said that this is the achievements of China’s economy and the financial industry’s efforts, but it is very important that it is October 1, 2016, the successful participation of theRMB in the SDR and the acquisition of institutional rights in the international reserve currency gave us more confidence. This forced many foreign institutions to allocate RMB.
"Now, by January 2017, there have been more than 80 overseas institutions to use the RMB as a foreign exchange reserve. I once managed this business. Theret were 40 companies that year and about doubled in about two years,” he said. In March of this year, the IMF announced its foreign exchange reserves. In the international foreign exchange reserves, the RMB accounts for 1.1% of the world’s foreign exchange reserves.In this regard, Yao Yudong said that the RMB can no longer be seen as a new currency, but also as an international currency.
However, he also pointed out that “although we still have some distance from such an international currency, we still need to work hard. To join the SDR, I think this is remarkable. The SDR’s previous currencies, when the SDR was generated, the euro is included, the yen, the US dollar, and the British pound are included, it is a veteran international currency. Emerging markets From the BRICS countries, only the RMB is the new SDR, It is not easy!”
In Yao Yudong’s view, this is a perfectly historic event. Because the global liquidity contracted and the international currency appreciated, the country did not suffer from the same situation as other countries.
Although the RMB has been “credited” into an international currency, Yao Yudong stated that it is still necessary to maintain the RMB as a reserve currency. “Our journey is still very long. We need time to adapt international financial institutions and international organizations to more allocations because there is a path dependence in the international monetary system.”
Yao Yudong further pointed out that this also requires China to implement supply-side structural reforms in-house and to externally promote the internationalization of the RMB, so that China will not fear the storm of international finance in the future, so that China can successfully leapfrog the middle-income trap.
（Article Source: Daily Economic News）
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