Yi Gang: We Need To Have A Common Heart.

On the afternoon of March 12th, Yi Gang, vice president of the people's Bank of China and director general of the foreign exchange administration, said in reply to the question of RMB internationalization, adding SDR to the RMB would help to expand the representativeness of SDR, and at the same time, promote the reform of the international monetary system. It should also play a catalytic role in the reform and opening up of China's financial industry.

He also said that China is evaluating and actively communicating with the International Monetary Fund (IMF), hoping that the renminbi will become a basket currency for SDR in the near future.

　　 Actively promoting RMB accession SDR

Yi Gang said that this year, IMF will review the special drawing rights, that is, the currency basket of SDR, for five years. In the past five years, the process of RMB internationalization has developed very fast. Now the RMB is the second largest trade financing currency and the sixth largest trading currency in the world. Many countries and regions' monetary authorities also use Renminbi as reserve currency.

When IMF reviews SDR, there are two criteria: first, look at the volume of goods trade and service trade behind the currency. "This standard is definitely no problem for China. China's trade in goods and services is one of the top in the world." Yi Gang said. Two, money should be freely available. Yi Gang also said that there are still some different views on the current standard. But generally speaking, we can see that the development of the RMB, the development of the RMB Offshore and offshore markets, the development of overseas RMB deposits, bonds and other derivatives all indicate that the renminbi is developing towards a freely available currency.

"Of course, if the renminbi is to join the SDR, I think we should have a common mind. This is the process of success and failure. When China joins and joins in, the process of China's financial reform and opening will continue to move forward." Yi Gang said so.

　　 Distinguish between capital outflows and Capital flight

With the strengthening of the US dollar, worries about capital outflow are heating up. Yesterday, Zhou Xiaochuan, governor of the people's Bank of China, said that the concept of "capital outflow" and "capital flight" should be clearly distinguished.

He said that in the balance of payments of China, the vast majority of funds come and go mainly with normal trade and investment background. Although some may be related to hot money at home and abroad, it is defined as the pursuit of short-term speculative interest in the financial market. The amount of hot money is often not easy to observe accurately, but it should be said that it exists.

　　 Yi Gang "China is now the most powerful country in trade in goods and services, and there is such a large trade in goods and services. Besides, our FDI and ODI are also investing heavily in China and investing abroad. Last year we had outbound numbers of over 100 million people, and the flow of people's capital, logistics, capital flows and investment flows would lead to cross-border capital flows.

"From the current situation in China, this (hot money) is not very strong. Some other countries in the world have fled their capital because they have lost confidence in their environment, and think that their wealth is not guaranteed, so capital fled. China also has such a phenomenon, but compared with the normal investment and trade, this quantity is not very large, so I think it is very important to distinguish this concept. Zhou Xiaochuan explained further.

In terms of how to distinguish between normal capital inflow and outflow and capital flight, Yi Gang said: "for risk prevention, currency matching and hedging needs, optimizing the balance sheet is actually a relatively stable mechanism within itself. In the past, all foreign exchange reserves have gone to the central bank. Now, enterprises, individuals and financial institutions are willing to hold more dollars. This adjustment is reasonable and normal. He also said that the central bank is also wary of some abnormal cross-border capital flows.

　　 The increase in US dollar deposits is a good phenomenon of "saving the people in the people".

In addition, as the US dollar continues to strengthen and the RMB exchange rate is weak, it continues to bring about changes in asset allocation of enterprises and residents. The February financial data released yesterday showed that foreign currency deposits continued to increase by US $18 billion 700 million at the end of 2, while foreign currency loans decreased by US $7 billion 400 million.

Yi Gang said: "the increase in US dollar deposits is a good phenomenon of" storing money in the people ". At the same time, it has been observed that loans have not been growing as fast as they used to be in the past six months.