Historical experience shows that the content of international coordination of macroeconomic policies is not static, and coordination mechanisms need to keep pace with the times. With the changes in the world economic structure and currency pattern, the original coordination mechanism is difficult to achieve practical results, reform and improvement must be carried out, and a new coordination mechanism is gradually formed under the impetus of all parties.
In the past two hundred years, the international monetary pattern has undergone a series of major changes, such as the sterling transition from prosperity to prosperity, the establishment of the dominant position of the US dollar, and the birth of the euro. The international coordination mechanism has also been coordinated from the political interests led by military forces to the leadership of international organizations. Multi-party coordination, and then to the emerging regional coordination.
It is not difficult to find that every major international currency change has led to the development and evolution of international policy coordination. Emerging international currencies all have their own international policy coordination mechanisms and platforms. Any emerging international currency that is in the ascendant period must accept the "test" of the traditional international policy coordination mechanism. If it fails, it can only be forced to withdraw from international currency competition. Survivors must also actively create a new international coordination mechanism to win the first-mover advantage. To build an institutional foundation for the internationalization of the currency. In fact, the success or failure of the innovation coordination mechanism determines the status of emerging international currencies in the new pattern. Obviously, the process of internationalization of the renminbi must also obey this historical law.


School of Finance and Finance, Renmin University of China

China Renmin University China Financial and Financial Policy Research Center

Meeting information

Time: July 14-15, 2018
Location: Renmin University of China

Cooperative media

Keynote Speech

Liu Wei, president of the People's University of China, pointed out in his speech that China's GDP accounted for the world's share, rising rapidly from 1.8% 40 years ago to around 15% today. The influence of the Chinese economy on the world and the impact of the world on it are no longer the same.
In this context, President Liu Wei further introduced that this year's "Internationalization Report on the RMB" revolves around the theme of "International Coordination of Macroeconomic Policies in Structural Change", based on the theory of currency internationalization decision, and draws on international experience and theory. Analytical and empirical research, focusing on the necessity, goals and directions of international coordination of macroeconomic policies and the required construction platforms and mechanisms.[full text]

In 2008, many scholars predicted that the financial crisis will lead to a decline in the dollar. But the crisis has been over for ten years, and it is pointed out to Song Wei that this has not happened. The report shows that in 2017, the status of the US dollar has been further strengthened.
To Song Song, what is a strong currency? A strong currency is a safe haven. When the international financial system is in turmoil, people are willing to choose which currency to put their own wealth, and who is a strong currency.
He further pointed out that there are many external factors, but the internationalization of a country's currency depends on whether its financial market and capital market can become a truly international, globalized financial market and capital market. In short, we need to cultivate internal strength more than worrying about the outside.[full text]

At present, Sino-US trade friction has little impact on China's economic growth, employment and exports, and it is within the controllable range. However, its impact on market expectations and supply chain adjustment is very large. If trade frictions escalate, it will put some pressure on China's capital flows and the stability of the RMB exchange rate.
In addition, the high macro leverage ratio is the most prominent problem facing China's economy. According to statistics, China is one of the fastest rising economies in the economy monitored by the Bank for International Settlements. According to the Bank for International Settlements, China’s macro leverage ratio reached 255.7% at the end of last year, significantly higher than the average of 193.6% in emerging economies, and even more than many advanced economies. This shows that de-leverage is imperative. But deleveraging can cause pain and bring about a tightening of the financing environment, which may make some potential risks explicit. The problems of “funding difficulties and expensive financing” for private enterprises and small and medium-sized enterprises have reappeared. As the proportion of low-grade credit bonds in the second half of the year increases, the risk of default may increase.[full text]

In his keynote speech, Luo Siyi, former director of the London Economic Policy Agency, pointed out that some people think that globalization is collapsing and protectionism is on the rise. This is wrong. We need to clarify this misunderstanding. The easiest way is to look at the proportion of trade in US GDP. In the short term, this proportion has not decreased. Trump plus tariffs do not mean that globalization is collapsing.

When talking about the real reason for Trump to impose tariffs, Luo Siyi quoted economic data as saying that this is not because the US economy is very strong, but because the US economy is growing at a slow rate. Trump believes that the only thing that can compete with China is to slow China's growth.

Luo Siyi believes that the negative effects of Trump's policy will emerge in the next year or the following year. A recent study by mainstream US financial institution Morgan Stanley predicts that Trump's tariffs will slow America's economic growth more than its impact on China.[full text]

Wang Guogang pointed out that some people currently use the “total debt/GDP” indicator to measure leverage ratios against economic principles; at the same time, there is no necessary internal relationship between total debt and GDP, and it is difficult to reveal financial risks and leverage. The intrinsic link between the rate. He believes that discussing the issue of deleveraging, in China and around the world, the most suitable indicator is the asset-liability ratio.

From the perspective of “de-leverage”, the total assets and liabilities of industrial enterprises above designated size in China was 112.3 trillion yuan in 2017, and the total debt was 62 trillion yuan. China does not need to be leveraged. This will lead to: first, the collapse of the national economy; second, the financial collapse (because these debts are mainly from finance), which will result in how many enterprises are closed and how many people are laid off, thus showing that the leverage is “go”.

Debt assets are a component of the operating assets of an entity. De-leverage does not mean that the leverage ratio falls to zero. Corporate debt comes mainly from two parts[full text]

He believes that the current "fear" in the foreign exchange market is due to the ripple effect of the sharp depreciation and crisis of foreign countries, the "ignorance" of the media on the reference and measurement of the RMB exchange rate in the new era, and the decline in foreign exchange holdings caused by the trade deficit and reserve reduction. Concerns about the “liquidity” of the market. To this end, it is necessary to promote the liquidity of the enterprise through the promotion of the FTU of the FTA account and the “RMB fund pool”. At the same time, in the case of the compression of monetary policy space, it is necessary to promptly introduce structural (directional) monetary policy and fiscal policy combination to ensure the decline of corporate liquidity and economic growth. Although the renminbi has depreciated pressure, it does not change the stable trend of the renminbi

Emerging market exchange rates fell sharply, market interest rates rose sharply, and a new round of currency crisis broke out. On June 28, the central parity of the RMB was lowered by 391 basis points, and the price was 6.5960. The decline was the largest since January 9, 2017. It was lowered for 7 consecutive days, driving the offshore and onshore RMB to continue to fall.[full text]

Zhang Ming mainly talked about three issues. The first current Chinese economy faces a new three-difficult choice. The first is the uncertainty of the external environment, the second is to prevent and control financial systemic risks, and the third is to maintain the steady growth of the national economy. In the past two years, the important reason for the Chinese government to accelerate the pace of risk prevention is that the external environment is very certain and very good. The global economy is recovering in a synergistic manner, the global trade growth rate is obviously warming up, and the capital outflows facing China are significantly alleviated. Therefore, the Chinese government can more easily maintain the macro-economic growth while preventing and controlling risks. However, this year, the situation has changed suddenly. The synergistic recovery of the global economy has re-transformed, and the Sino-US trade war has suddenly intensified, causing the external environment of the Chinese economy to turn sharply. In this latest situation, it is very difficult to continue to maintain macroeconomic growth while preventing and controlling risks.[full text]

First, from the limited opening of protection to the full opening of national treatment. The opening up of China's financial industry for decades has basically been a limited openness of protection. In a protective financial open environment, Chinese financial institutions face low-intensity competition. In the process of rapid economic development and extraordinary expansion of the financial market, various financial businesses have developed rapidly. At the same time, the trade wars provoked by the United States may cause global financial market volatility and impact on the more open Chinese financial industry.

Second, the financial industry to expand and open and strict supervision: First, let the wealth management business return to its source. Clarify the essence of the asset management business “respecting people and managing people”, and promote the transformation of expected-income products into net-value products, allowing investors to take risks at their own risk and break the benefits.[full text]