Discover and read the best of Twitter Threads about #RMB

Most recents (24)

1/15: I was recently called a “China Macro Tourist”, so I decided to do the following and give a chance to everyone to find out about China’s Macro reality for themselves.

Since the best way of learning is by doing, I will set a few questions so that everyone who doubts to find……
2/15 a: We start from the GDP: China’s GDP is an input number and not an output figure like in Western economies. National accounts are based on data collected by local governments, which are rewarded for meeting growth targets; hence, local governments are incentivised to skew……
2/15 b: The Brookings Institution, in a research paper published in March 2019, estimated that China's GDP growth from 2008-2016 could be 1.7% (annually) lower than publicly acknowledged. I am confident China did not stop there. What happens if China’s GDP is 20% lower than most……
Read 19 tweets
In the 2010s, #China growth model created both a driver and a drag for DMs. Great report from @freyabeamish access it here…

A thread 🧵
1. 2010s driver: China’s contribution to global growth in the 2010s was to internalize the deficit that previously was run by the rest of the world, notably the US household sector. As willing foreign borrowers dwindled, the #RMB appreciated and Chinese policymakers chose to
prop up growth by borrowing through the corporate sector, with the private sector following suit, most notably in the real estate sector. By around 2016, the corporate sector was saturated and households took over, blowing the final air into the bubble that is the Chinese
Read 6 tweets
How to protect #China from #Russia-like sanctions?

This question continues to be debated by Chinese analysts.

▫️ Ye Yan's solution: Beijing should build an international alliance of businesses to circumvent and neutralise Western #sanctions

🔹About the author: Ye Yan (叶研) is currently a senior economist at the international R&D arm of China National Petroleum Corporation (CNPC) and an adjunct professor at China’s Southwest University of Political Science & Law.
🔹Some background: China was taken aback by the scale of Western sanctions on Russia following the outbreak of the #UkraineWar. Government officials and experts have since been assessing how best to protect their country from such a doomsday scenario.…
Read 17 tweets
(1/11) 🇨🇳 Die #Corona-Lage in #China verschlechtert sich, das #Lockdown-Chaos in Shanghai geht weiter, Besserung ist nicht in Sicht. Im Gegenteil: In #Shanghai werden Häuser von außen eingezäunt und auch in #Beijing rechnen die Menschen mit einem (echten und harten) Lockdown. 🧵
(2/11) Szenen wie diese beobachten die Menschen in Shanghai nun: In der größten Stadt #China​s (mehr als 25 Mio Einwohner) errichten die Behörden massive Metall-Zäune, um bereits abgesperrte Wohnsiedlungen und Gebäude zusätzlich voneinander zu trennen.
(3/11) Offensichtlich ist nicht damit zu rechnen, dass der Lockdown in #Shanghai bald endet. Die Zäune wirken stabil und nicht provisorisch. #China​s Behörden agieren weiter intransparent: Die Bevölkerung wird weitgehend im Unklaren gelassen.
Read 12 tweets
Here is the stock, sharing even full support given.
Stop loss 365
target 545
cmp 411.65

Stock locked in Circuit. the moment I tweeted stock was trading below UC price

Not a recommendation to buy, its just a view

hit like now

#RMB #Investing
Circuit is open
Again 🔒 😀
Read 4 tweets
Dr. Zhang Bin at CASS suggests to give full play to the flexibility of the #RMB exchange rate as a buffer for China’s macroeconomic stability: 1/6…
Whether it is to deal with the difference in relative demand changes at home and abroad, or to handle the impact of international capital flows, maintaining a flexible RMB exchange rate would be a major coping strategy. 2/6
Under a flexible exchange rate regime, RMB will depreciate to a certain extent if the US #economy stages a strong recovery while the recovery of the Chinese economy marginally weakens, which’ll have a positive effect on increasing aggregate demand and preventing deflation. 3/6
Read 6 tweets
Back in March, near the beginning of the US lockdown, I warned those predicting a US economic "supply shock," stemming the fall in exports by China not to count China out. That China would battle back with a vengeance,...
...using every tool at its disposal, including currency devaluation, industrial subsidies and household support - in addition to its overwhelming attack on #COVID19. I said then that China would be playing an aggressive game of economic "catch-up. >>
And China has done exactly that, with astounding success in terms of restoring growth to its economy:

"With Covid-19 Under Control, China’s Economy Surges Ahead" reported by @KeithBradsher
Read 14 tweets
Promoting #RMB in international transactions is increasingly important, says Zhang Xiaohui.

In the past, businesses mainly considered market factors when choosing a currency for cross-border settlements, e.g. exchange rate risk, currency conversion costs & financing costs...
RMB as a currency with high interest rates are attractive to foreign investors as China opens up its financial market wider, but in global trade, its costs are higher than the USD, the Euro or the Japanese yen...
However, concerned that settlements in #USD could be arrested by the US' financial sanctions&long-arm jurisdictions, more businesses have turned to RMB in cross-border transactions. The dependence on the USD system for settlements could be reduced through refined management...
Read 5 tweets
The successful transition to a free-floating exchange rate regime for #RMB requires sound monetary and fiscal discipline, says Jin Zhongxia at the IMF...
With a flexible exchange rate system, China should avoid large macroeconomic imbalances and risk accumulation in the financial system, esp external sector&fiscal imbalance e.g.continuous large current account deficits, overreliance on short-term capital inflows & external debt...
The core of macro-prudential management under a clean floating exchange rate regime involves 3 tasks: controlling aggregate money supply, controlling public debt, especially net public debt, and controlling total external debt including short-term external debt...
Read 7 tweets
10 measures proposed by Zhang Xiaohui, former assistant governor of the #PBC, to promote the #dualcirculation in financial services:…
1. Properly position the financial sector against the new backdrop featuring “dual circulation”. China’s financial system needs to step up a new wave of upgrade and reform. It should give direct #financing a bigger play based on technological innovations.
2. Financial supply-side structural reform shall continue to play a core role. China needs to improve twin-pillar regulatory framework (monetary&macroprudential policies) and make monetary policies more flexible; develop multi-tier capital market; boost #RMB internationalization.
Read 7 tweets
As Conditions for Capital Account Liberalization Are Immature, China Should First Achieve a Free-Floating Exchange Rate Regime, says Yu Yongding
Four things need to be done before liberalizing China’s capital account:… 1/5
First, float the #RMB exchange rate. Generally speaking, this is a must before China steps up its opening-up of the capital account. 2/5
Second, clearly define and strictly protect property rights. It would be hard to stop capital flight and dangerous to open up the capital account hastily if property rights are ill-defined and protected. 3/5
Read 5 tweets
Some say #RMB exchange rate shouldn't be allowed to fluctuate freely. But Prof Yu Yongding says this has been proven wrong, and the best proof against it is the debate as to whether RMB exchange rate should be allowed to breach the critical level of 7 against #USD...1/6
This issue sparked controversy in the middle of last year. One view was that once the RMB exchange rate breaks the 7/USD threshold it will enter a freefall by as much as 20% or even 30%, which should not be allowed to happen...2/6
However, it was proven wrong. Facing the critical juncture, the #PBC remained calm and patient and did not intervene. It turned out that RMB did not end up in a crash as expected; instead, its exchange rate gradually stabilized...3/6
Read 6 tweets
4 suggestions for #China in building a global center for financial asset allocation by Xiao Gang:
1. Speed up market-oriented financial reforms. Build a more market-based, rule-based, international financial sector. Remove redundant administrative controls so that the #market can play a decisive role in resource allocation.
2. Press ahead with #RMB internationalization. Explore the possibility of building a pool for cross-border funds of both RMB and foreign #currencies, upgrade its #forex management, and encourage transnationals to establish global or regional centers for fund management in China.
Read 6 tweets
Despite fluctuations amid the #pandemic, #China’s #financialmarket remains relatively stable & resilient compared with global financial market. Xiao Gang, CF40 Senior Fellow, believes China’s financial market has potential to become a center for global financial #assetallocation.
He says the market is basically equipped. This'll be vital for China’s economy and finance. Since the virus broke out, the safety, stability and profitability of #RMB assets are more evident. China should take the chance to build a global hub for financial #asset allocation.
However, coming with the huge benefits are huge risks and costs. The following proposals are made:

1. accelerate the market-oriented reform in the financial sector;

2. promote #RMB internationalization;
Read 4 tweets
Why does high quality development require re-starting of #RMB internationalization? #China's economy has entered new stage of high-quality development, and the financial sector must serve the real economy, according to Guo Kai…
This paper reviewed the progress of RMB internationalization &pointed out the large gap in global use between RMB & other reserve currencies. It also puts forward policy suggestions on how to restart RMB internationalization to assist high-quality development of Chinese economy-
Policies that are conducive to RMB internationalization are also conducive to high-quality development- that is (1) Efforts made to make RMB a major currency can all help promote high-quality development.
Read 6 tweets
Marking its third volume, CF40’s 2019 Jingshan Report focuses on how and what kind of financial innovation can better serve the high-quality development of the economy. Overall, it has put forward eight policy recommendations:
1. Create a policy,institutional & legal environment that can better support innovation; protect #IP rights; implement competitive neutrality; further optimize the legal system for firms’ bankruptcy and restructuring; and establish a market clearing mechanism;
2. Develop an “optimal financial structure” that is compatible with high-quality economic development; develop multi-layer capital markets and encourage financial institutions to better serve innovation activities and #SMEs.
Read 9 tweets
China's financial policy system should be further improved to gradually make it clearer, more transparent, understandable, stable, and in line with the inherent requirements of #RMB internationalization,said CF40 member Guo Kai,… 1/5
It should be noted that the inflation targeting, the clean floating #exchangerate, and the free flow of capital generally adopted by the major reserve currency issuers are not the only institutional arrangements that meet the above characteristics. 2/5
Currency internationalization does not necessarily require the adoption of specific macroeconomic policy arrangements. 3/5
Read 5 tweets
To achieve the supply-side-driven internationalization of the RMB, we must first maintain strategic patience and set no timetable, said CF40 member Guo Kai,… 1/7
How internationalized the #RMB is cannot be directly regarded as the policy goal itself. We do not deliberately pursue the RMB internationalization for a single moment. 2/7
The financial policy system of the major reserve currency issuers are all characterized by clarity, transparency, understandability and stability, which is compatible with the requirements of currency internationalization. 3/7
Read 7 tweets
The re-start of #RMB internationalization could finally help get rid of the “#originalsin” of currencies in emerging market, said CF40 member Guo Kai,…. 1/6
It will greatly reduce the negative impact of exchange rate fluctuations, capital flow fluctuations and “#longarmjurisdiction” in other countries. 2/6
Eichengreen and Hausmann have proposed the “original sin” of currency in 1999, arguing that because currencies of developing countries are not international, they cannot be used for external borrowing or even domestic long-term borrowing. 3/6
Read 6 tweets
CF40 member Guo Kai gave some specific proposals for the re-starting of the internationalization of #RMB at…
He suggest China should realize the supply-side-driven internationalization of the RMB with it as the anchor of China's financial reform and opening up. 2/6
The basic approach to shifting to supply-side driven could be creating a suitable policy environment, market environment and institutional environment for the internationalization of the RMB.3/6
Read 6 tweets
"The significance of Digital Currency Electronic Payment lies in that it's not the digitization of existing currency,but replacement of M0. It greatly reduces the dependence of trading process on accounts,which is conducive to the circulation and internationalization of #RMB. ...
... At the same time, DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies. ...
... #PBOC has been studying #DCEP for five or six years, and is likely to be the first central bank in the world to launch a digital currency," said Huang Qifan, Vice President of #China Center for International Economic Exchanges, in #BundSummit #stablecoin #digitalcurrency
Read 3 tweets
CF40 just released its 2019 Jingshan Report. Marking its third volume, this year it
focuses on how and what kind of financial innovation can better serve the
high-quality development of the economy. Overall, it has put forward eight
policy recommendations:
1. Create a policy, institutional and legal environment that can better support
innovation;protect intellectual property rights;implement competitive
neutrality; further optimize the legal system for firms’ bankruptcy and
restructuring; and establish a market clearing mechanism;
2. Develop an “optimal financial structure” that is compatible with high-quality
economic development; develop multi-layer capital markets and encourage financial institutions to better serve innovation activities and #SMEs;
Read 9 tweets
THREAD: What’s the relationship between RMB internationalization and China’s pursuit of high quality development? Policies that helps promote the global use of yuan, are policies needed to high quality development,Guo Kai CF40 member said in the 2019 Jingshan Report: 1/
Promoting the international use of RMB should become the focus of China’s ongoing financial opening and reform efforts. Good monetary, exchange rate and capital flows policies should be able to help promote the global use of RMB. 2/6
There is no timetable for RMB internationalization, and a financial policies system
that is clear, transparent, easy to understand and stable will be requirement
for this process:…
Read 6 tweets

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