On August 9-12, 2018，CF40 held the 2nd Yichun Forum with the theme Financial Opening-up and RMB Internationalization in Yichun, Heilongjiang Province. The main forum was set on August 11 with a number of related events taking place before and after it. The Forum was co-organized with Shanghai Finance Institute, Northern Finance Institute, and the People’s Government of Yichun.
At the general assembly of the main Forum, Ms. Gao Huan, Secretary of the CPC Committee of Yichun, Mr. Wang Wentao, Governor of Heilongjiang Province and Mr. Chen Yuan, Vice Chairman of the 12th CPPCC National Committee and Chairman of CF40 Executive Council addressed the opening ceremony.Following the opening remarks, Mr. Zhou Xiaochuan, former Governor of the People’s Bank of China made the first keynote speech. He pointed out that fluctuations during the process of RMB internationalization were normal and the process is heavily influenced by international factors. To push forward the process, China needs to further open up its financial market, and remain consistent in its institutional arrangements which should not be used as temporary adjustment tools.
After Zhou, Jiang Xiaojuan, former Vice Secretary-General of the State Council talked about China-US economic relations from the perspective of service trade. She believed that China has already built a competitive advantage in developing the service industry. Further opening the service sector could help balance the economic relations with the US. However, in the long run, the two countries will be rivals in this field.
The third speaker was Mr. Yu Yongding, CF40 academic advisor and Academician at Chinese Academy of Social Sciences. Mr. Yu delivered three major points. First, financial opening was China’s solemn commitment to WTO and China would persist in this course whether there is a trade war with the US or not. Second, under the pressure of the unsettling factors in the financial market such as the P2P bubble, slowdown of China’s economy, and China-US trade conflict, China should prepare itself against capital outflows and RMB depreciation. Regulation of cross-border capital flows shall remain tight, but intervention in the foreign exchange market shall be ended. Third, exchange rate reform, capital account liberalization and RMB internationalization shall come in proper sequence.
Ms. Hu Xiaolian, Chairman of the Export-Import Bank of China, then talked about how China-US trade conflict brought an opportunity for RMB internationalization. Recently, the supply of US dollar has contracted globally, while China is faced with a declining savings ratio, growing fiscal pressure, reduced trade surplus with the US and increased fluctuations of cross-border RMB business. All these factors will promote the export of RMB. China should grasp this opportunity and accelerate the pace of RMB internationalization. It needs to make the use of RMB in cross-border trade and investment more convenient, which requires further opening of the domestic capital market and monetary market, a market-oriented RMB exchange rate mechanism, as well as rule-based, transparent, professional and efficient regulation.
The last speaker was Mr. Jiang Yang, former Vice Chairman of China Securities Regulatory Commission. He held that commodity futures meant a great deal to China’s future economic development. A market-oriented solution to ensure commodity supplies will see the least shock, be most easily received and most likely to realize a win-win result. To further promote financial opening up and increase the pricing power on the futures market, China needs to push forward legislation in this field.
Two panels ran in the afternoon. At the first panel, Mr. Liu Shijin, former Deputy Director of Development Research Center of the State Council, Mr. Xu Zhong, Director-General of PBC Research Bureau, and Mr. Guo Kai, Deputy Director-General of PBC International Department, discussed the prospects and challenges of financial opening up.
At the second panel, Mr. Huang Yiping, Vice Dean of National School of Development at Peking University, Mr. Guan Tao, CF40 Senior Fellow and Ms. Shi Liya, SFI invited expert shared their views on RMB internationalization.
CF40 Secretary-General Wang Haiming chaired the main forum. Live stream of the event topped 60 million views.
