Internaionlization of the Renminbi and Renminbi Offsore Markets外文电子书籍.pdfVIP

Internationalization of the Renminbi and Renminbi Offshore Markets Professor Joseph Yam Former Chief Executive, Hong Kong Monetary Authority Distinguished Research Fellow, Institute of Global Economics and Finance, The Chinese University of Hong Kong .hk/ RMB Internationalization Approach (1) • The guiding philosophy for reform and liberalization to build a socialist, market economy – crossing river by feeling the stones (Deng), more recently articulated (by Wen) as gradualism, controllability and the taking of initiative (漸进, 可控, 主动) • No clear strategy outlined, but benefits of promoting the greater international use of the RMB and the risks of too hasty capital account liberalization are clear • Controlled experiments through development of off-shore RMB market in Hong Kong .hk/ RMB Internationalization Approach (2) • Need to accept that the off-shore (freer) market exists for the purpose of doing (desirable) things that, for good reasons from the perspective of the Mainland, could not be done on-shore • Need to be careful that the tail does not wag the dog – the off-shore market does not undermine financial safety and effectiveness of monetary and financial policies on- shore • The two markets need to stay connected for the purposes of effective risk management and the transmission of important market signals (e.g. anomalies between on-shore and off-shore market conditions) useful for identifying further areas for reform and liberalization .hk/ RMB Internat