Future Developments
Future Developments
Preface
Background to the Chinese Economy, Banking System and Capital Market
Background to the Chinese Renminbi
Onshore FX Markets and Instruments
Offshore FX Instruments and Market
Trade Settlement, Hedging, Investment and Trading
Future Developments
Detailed chronology of main events in renminbi internationalisation
References
6.1 INTRODUCTION
Given the raft of reform measures implemented after June 2010 – discussed in Chapter 2, Section 2.5, and also various other sections – it is clear that the Chinese government is determined to push forward the necessary changes to liberalise its capital account and substantially change the way the renminbi exchange rate is set within a reasonable timeframe. As the renminbi system is deeply intertwined with many other areas in finance and the real economy, the reforms need to be multi-pronged. As discussed in Chapter 1, Section 1.12, significant reforms in the following areas need to be coordinated:
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internationalising renminbi and developing a liquid offshore renminbi market;
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liberalising China’s capital account;
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deregulating the onshore foreign-exchange market and reforming the renminbi exchange-rate mechanism; and
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liberalising the domestic interest-rate-setting mechanism, reforming the domestic bond and money market.
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Naturally, some of the manifest imbalances in the renminbi exchange rate can be traced to other deep-rooted causes in the real economy. Structural reforms need to be carried out in
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