A Solid Step Towards RMB Direct Trading And RMB Internationalization.

The foreign exchange trading center issued the announcement on the development of the RMB direct trading market for the euro, which has been authorized by the Central Bank of China. Since September 30, 2014, the inter-bank foreign exchange market has improved the way RMB trade with the euro and has developed direct trading of RMB against the euro.

The central bank said that the direct trading of RMB against the euro on the basis of market principles is an important move for China and Europe to jointly push forward bilateral economic and trade relations.

"The euro is currently the second largest currency. In the European market and the US market, the amount and volume of settlement of the euro are very large.

To further internationalize the RMB, it is very important to establish a trading platform gradually with non US dollar mainstream currencies.

Liu Zhiqin, senior researcher at Chongyang Finance Research Institute, Renmin University of China, said "First Financial Daily".

Help RMB internationalization

After the direct trading of RMB against the yen, Australian dollar, pound and New Zealand dollar, the market opened up for the direct trading of the euro, and the market became very excited, and the discussion on the internationalization of RMB became heated.

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After direct trading, currencies in major economic regions have realized direct trading, which is very beneficial for large-scale trade cooperation.

In the future, there will be more currencies to be traded directly with the renminbi. "

Wen Bin, chief economist of Minsheng Bank, told the first financial daily that more foreign currencies could be traded directly with the renminbi, and the proportion of Renminbi denominated and settled in foreign trade will rise further.

"The first step in the internationalization of RMB is the increase in the proportion of Renminbi denominated under trade terms, which is a phased achievement of RMB internationalization."

The above is only the first stage of RMB internationalization process, and the second stage is from the trade stage to the investment stage.

"The scale and speed of RMB overseas investment are faster and faster. China is expected to invest more in foreign direct investment next year than it can attract foreign investment. It can become a net capital exporter or become a new capital exporter after the US and Japan."

Wen Bin said that the internationalization of RMB will further expand in the investment field.

According to Wen Bin's concept, the ultimate stage of RMB internationalization is cooperation in the financial field, including the development and construction of the offshore RMB market.

"In fact, in addition to the traditional Asia Pacific market, European and other world financial centers are also optimistic about the renminbi.

London, Frankfurt, Paris and Luxemburg are scramble for the renminbi offshore center in Europe.

Wen Bin said that RMB bonds and other related financial derivatives are also being developed step by step.

The financial sector will be further deepened, and the renminbi will be further recognized.

In addition, central banks in some countries have begun to use Renminbi as their foreign exchange reserve.

"In general, we are not fully prepared."

Liu Zhiqin said that to further internationalize the RMB, it is very important to gradually establish a trading platform with non dollar mainstream currencies. The internationalization process of RMB is moving forward step by step, and cannot be achieved overnight.

"Our economic strength is not enough, growth momentum is not enough, and international trade, especially exports, has been greatly affected.

The RMB should be steadily internationalized and not aggressive.

In 20~30 years, the RMB may exceed the euro, reaching 30% share. "

Liu Zhiqin said.

Liu Zhiqin said to the first financial daily: "at present, the proportion of RMB in international currency reserves is relatively small.

The internationalization of RMB is a result of success. At the present stage, it is necessary to further expand trade and investment facilitation.

After the start of direct trading with the euro, it will promote the process of running in and exchange with other currencies. "

Wen Bin told the first financial daily that the direct trade between the RMB and the euro is conducive to trade and investment convenience and liberalization. There is no doubt that it can promote bilateral trade, including financial exchanges.

The direct trading of Renminbi and the euro avoided the increase in costs through third party currency pricing. Direct trading can promote bilateral economic and trade relations and deepen trade, investment and financial cooperation.

In addition, Wen bin also said that the trade investment between China and Europe is developing towards financial cooperation, and the direct trade between the RMB and the euro is conducive to the internationalization of RMB.

More importantly, the two sides will further deepen cooperation in the financial field, play an important role in the development of offshore RMB centers and enhance the scale of Renminbi deposits overseas.

Not long ago, a Deutsche Bank Research Report on China EU trade and economic relations said that the proportion of RMB settlement in the bilateral trade between the EU and China was less than 10%. The report thinks that 10 years later, the proportion of RMB settlement in bilateral trade between the EU and China will reach 40%.

According to Deutsche Bank's view, direct investment may become the next driving force in the development of China EU partnership.

The above German Silver analysis report said: "in the current trend, the total annual bilateral trade volume between the EU and China will grow 1.5 times in 10 years, reaching 660 billion euros."

The circulation of RMB in Europe has great room for development.

The comprehensive strategic partnership between China and Europe has entered the second ten years.

The European Union has maintained its position as China's largest trading partner for ten consecutive years. Trade between China and Europe has reached US $1 billion 500 million a day, and bilateral trade volume has exceeded US $500 billion for three consecutive years.

During the two sessions this year, Gao Hucheng, Minister of Commerce, said that trade between China and Europe reached US $566 billion 200 million last year, an increase of 235 times than in 1975.

Data from the Ministry of commerce website showed that China's bilateral trade with the EU reached $291 billion 440 million in the first half of this year, an increase of nearly 12% over the same period last year.