好,欢迎回来Rate for exchange rateIn August 11th this yearwe witnessed the big changethe reform of R&B and devaluation of R&Bwe saw a lot of reactions of these policyWhat is the reason?What is the policy reason?The policy logics behind these R&B devaluationThe gentleman said that he is not representing PBOCbut he can share with us the mind on the PBOCabout the currency reformtheoretically it is quite timingtimely to have this reformand also is quite logicalbut the result is unexpectedI say it is timelybecause we all chose summer as the good timefor the reformAugust 11th is the time that the Wall Street people take leaves offand a lot of reporters and journalists take their leavesin other countrieswe want to take this as an opportunityfor us to boost to launch this reformso that we can prevent the hiking of this reformas well as the rate, R&B rateagainst US dollarwell, the R&B value against US dollardoes not devaluate muchso it is a good time to launch this reformthe present R&B is not international currency yetbut we can call it a quasi international currencyso neighboring countries following devaluation of R&Bis devaluating their currenciesso developing countries may show their worriesso the reform, the recent reformshows that we have to keep into considerationand the understanding about China's reformin other marketsthe foreign exchange rate of R&B has beenhas been revaluatedthe devaluation has increased by 20%well, I think this reformthe key point is thatthe forming mechanism has given a lot of weightto market mechanismthe market has been given more forcesin the reformI think in the past there are three channelsfor the valuation of R&Bone is that the foreign exchange managementthe administration will go to the market directlyto buy the foreign exchangethe second, the PBOC setthe range for the fluctuation of the valueof R&B foreign exchange rateabout 2%recently the PBOC chose the third channelfor intervention of the R&Bfor exchange ratioit will set a middle rateand then we increasingly findthat the meat priceof the R&B foreign exchange rateis not relatedto the closing priceof the previous dayso I think this is not a market forceso the August 11th reformincluding 2% devaluation of R&Bamong othersis to make the settingof the middle priceof R&B foreign exchange ratewill be more relevantto the valueof R&B foreign exchange rateof previous yearI think this is the remarkable moveas Professor LiDougui mentionedit has aroused a lotof impactglobal widefrom other perspectiveif you look at some financial statisticsM2 has increased by900 billionPBOC statedthatthere is an increaseof R&Beasons which has exerted pressureon devaluationof R&Bso what is your takeonthatit is not the casewe see thatwe will see the flexibilityof the PBOC policyactually you will seethe gapactually reflecta huge amountof capitalhas fledinto nonrealeconomy activitiesthat is the 900 billionyou mentionedI think this is the pain pointthat we have to think abouthere in ChinaI think there are differentspecific problemslike liquidity,economicof elements or SDRI think the most important thingfor usis whetherwe should consolidatereformlet's move on toSDR in a momentreform on the August 11Lautnerdo you think it's a good timingdo you agree with Professor Li Daokuithat it's a very good timingI think these things are very difficultto pick any particular timingand I'm not sure I'd tryand pick a timewhen you think the journalistsare on holidaythat tends to backfire a bitif you use those techniquesI think the thingto say about what happenedin August isthere were two things going onone was a set oftechnical changesthe way that the rate was setand if that was allthat was occurredit would not have producedas much excitementthe excitement camefrom the relativelysmall devaluationagainst the dollarI think that devaluationwas completely understandableand completely legitimatebecause after allthe RMB had been linkednot to a basketbroadly speakingto the dollarand as a resultover the last few yearshas had a very significantreal appreciationbecause the dollarhad gone upand this is a relativelysmall adjustment downwardsthe difficulty isthat we are in an environmentnowwhere people are thentrying to askwell what does it meanfor the futureand this is complicatedby the factthat China now clearly hassignificant short-termcapital flowsup until 3 or 4 years agoyou could pretty muchunderstandthe movements in China'sforeign exchange reservesby looking at the currentaccount deficitplus foreign directinvestment in or outso we knew thatthere wasn't all thatmuch hot moneybut what has happenedover the last few yearsis there's a biggerunexplained bitwhich we findmuch more difficultto understandand this always happensin the processof exchange rateand capital flowand current accountliberalizationonce you've gonecompletely toliberalizationof the current accountonce you've gota large amountof foreign directinvestment flowsonce your corporatesand your financialinstitutionsgetting more and moresophisticatedwhat you findis thatthere areall sortsof mechanismsfor corporatesto do thingswhich areessentiallyshort-termcapital flowsspeculationscounterscurrent accountminipulations etcwhen theyremit fundsthat they've receivedwhat they'reborrowing technique iswhether theyrepay borrowingat the end of the periodand I think allthis illustratesis thatthe inevitabledirection of changewill nowbe towardscapital accountliberalizationbecause onceyou've gonea certain waydown the pathyou have to gothe restof the wayI still thinkthere is a rolein some categoriesof capital accountcontrolbut that's wherewe are nowand it's thecombination ofthe smalldevaluationplus theevidence fromthe foreignexchange reservefigures thatwe're now gettinga large amountofcapital outflowwhich hasthen generateda set ofdebateaboutwhether thisis going to befollowed bya biggerdevaluationand that'swhat's reallythecontinuesto devaluethen thecapital flowwill getbigger and biggerhow are youconcernedabout thiskind ofcapital outflowwe can seethe numberspeaking upand reserveis shrinkingultimatelyyou cannotcontrolthatonce youbecomea fullyinternationalizedcurrencylet's beclear thatthat isthe dollaragainstthe yenonly a smallamount ofthose changescan be explainedby differencesinrelativeinterest ratesor by thecompetitivecondition ofthe current accountthe majorityof those movementsthey're oftenquite dramaticif you go backto Japanin the 1980sand the wholeplaza accorddebates as ahuge movementsareessentially drivenby changesin sentimentinflation ratedifferentialtheoryand that is simplythe waythe world isfor fullyinternationalcurrencieswhich meansthat as and whenChina fullyinternationalizesit has toacceptthat ispart of theconsequenceof itand it has tolivewith thatconsequence這個特納我補充一點特納勳爵他說的it occursin the tradeaccountalso i wouldlike to addthatthere are manyuncertaintiesabouttheChineseeconomyor peopleare stillspeculatingor theyare stilltrying tofigoutwhatis thereal situationof theChineseeconomyso wecanfind a lotof predictionson holidaytheyre stillvery interestedin theChinesesituationso thequestionisshould rmbcontinuetobestableorwe shoulddevaluea little bitaccordingtothe marketforceand alsowhat kindofimplicationswill thishavefor thenational monetary policyand the implicationof that isis that the currencydepreciatessomewhatin the short runI think this isnaturally foreseeingthe rmbbecomingrmbbecomingan international currencyin the long runit's necessaryfor the Chineseeconomy to havean open capital accountso in the long runit's goodI think it'svery importantto try to keepcurrency fluctuationout ofpolitical debatebecause a currencyis a thermometerfor the economyit should be a partof monetary policyand notthe political symbolsoChina is going to playan increasingimportant rolein the global economyand with an opencapital accountit will be naturalthat the currencyin the short-termflactuationI agree withLotterne thatthese fluctuationswill not be rationalbecause marketsare not rationaland thereforeI think we shouldjustaccept thatthat's a fact of lifeandthe mostimportant thingthat the Central Bankof China can dois to conductmonetary policyso thatgrowth in Chinais stablethat's the most importantfor the global communityDo youhear that theindependenceof the PBOCshould be strengthenedexcuse meindependenceof the Central Bankwell I believein generalthat the experienceof independentcentral banksthat try to upholdprice stabilityand to acceptcurrency fluctuationhas beento runmonetary policyin many countriesthank youand nowlet's moveto our Japanese friendand we knowthat the latestnew storiesthat in the recentG20finance ministerand thecentral bankgovernance meetingsand afterthe elaborationof thepolicyrationalby the governorjoand theinternational communitybegan tobroadly supportthe PBOC's moveon the 11thwe have exceptionwho isthefinance ministerof the JapanTerro Assoand he saidthat maybethe policyis not that goodand theelaborationof the governorjois not thatdetaileddo you agreewith yourfinance ministerwell thank youvery muchfor raisingvery interestingquestionMinister Assoand Iwork togetherin the governmentfor long timeand his opinionandthis timealsomy opinionis differentI basicallysupport thepolicychoice ofChinesegovernment this timewe areconsideringthe verystable assetmarketandconsideringthe fallingdeservesituationwe arethattimethatdecision makingwas reasonableI thinkhoweverthatbecausewellwe alwayssaythe exchange rateis decidedin the marketsupplyand demandin the marketbutin the caseofRen Mimbithepoliticalaudition makingis veryimportantcentral banktheindependencecentral bankwe discussedbutcentral bankis nowa partthepoliticaldecisionis understandablebut stillweexpectmoreindependenceofcentral bankand moreflexibletradein thecapital marketwellwe arenow goingtodiscuss theinternationalizationofRen Mimbiwe hada verysimilar discussionin 1980sthenwe hada two functionsbasic functionone ismeans of paymentmeans ofexchangeconsideringthe size ofthe Chineseeconomyand the trade volumeof Chinathe internationalizationofRen Mimbiis very importantalreadyit's internationalizedin a sensehoweverat the same timeassume you haveone billionus dollarsin this casedo you want tokeep this assetinasseteurodenominatedassetorRen Mimbidenominatedassetthis meansourcurrently hasanother functionof thekeep or havecarryourwellsvalueto savewellsvaluein that senseour peoplearein the worldareexpectingmuch morefree marketorgas 11eleventh concernwhy i'd liketo supportthe ideaof central bankof Chinathis isvery much differentfrom mythe ministerof financeof Japan's ideathank youand weif we look intothe futureI think the marketalso very muchconcernedabout thedirectionof the R&Bwill it continueto devaluein the long runand in the short runor it will remainto be stablebecause of thethe aim ofinternationalizationof the R&BI'm wonderingif any gentlemanwants to pick up thequestionwell there'sthere's nolong-termfundamental reasonfor the R&Bto depreciateChina hashigh competitivenessthe large manufacturingsectorbasically well runpublic financesso there is nofundamental problemwith higher inflationand low competitivenessbut in the short runI thinkmonetary policyin Chinamost likely needsto beslightly moreexpansionaryso it might bedepreciatingin the short runbut in the long runit all comesback towhether theChinese economyis structurallywell-footedand that dependson whether thegovernmentas we heardprimarilytoday arguefor morestructural reformsand if theydo thatand continue toopen theI would like to addI agreewith theprevious panelisttalkingabout thelong-termdevelopmentof R&BI don't thinkit's necessaryto thinkabout whetherR&B willdepreciatein the shorttermor thelong-termbecause inthe pastwe foundthatactuallythe long-termin the shorttermthatactuallyR&Bispackedtothe U.S.dollarandthefluxuationisnotsolargenowthelatestmarketresponseisjustifiablebecauseR&Bremainedstableandallof a suddenjust nowit's mentionedthat the stabilityfor thelong-termisthe better choiceand I believethatwe shouldmakeR&B stableagainstabasketofcurrenciesthis willbe more beneficialto theworld economybutit's expectedthatcomparedwiththe U.S.dollarR&Bwill depreciatedo you thinkthis isanothermonetary warwellI thinkyou have toput this questioninto theglobal contextI believethe existingsituationis quite likein the1997or 1998everybody wasnervouseverybody wasquite surethatincreasethe interest ratebut nobodyknowsnew whenif theR&Bdepreciated againwe canexpect theconsequencesfor one thingtheemerging economieswill continueto depreciatetheircurrenciesand thesecondwith theR&B depreciationour exportto theworldthey arealldenominatedwith USdollarsthenthe Chineseexportwill beopsettedby suchdepreciationsoin the finalanalysiswe wouldfind thatit woulddo no goodto theworldeconomyso mysuggestionis in thecoming monthsor in thecoming yearlet's keepif we wanttomake somemanipulationthenmaybe theR&Bcanbeappropriatelyeasedin orderto offsettheUSdollarappreciationthenwe wouldhavetheinteractiveor thetwo-waychangesandR&Basemiinternationalizedcurrencybasketorshould we targetdollarin theshorteranI think I'msympathetic to the ideaof targeting abasketI'd like to begin bysaying thatif I wasany goodat forecastingmedium termforeign exchange ratesI'd be a very richmanconsiderably richerthan I amin the veryvery long termif you wanted meto predictI thinkthe R&Bwill risein real termsbecause that'swhat tends to happenwith emergingeconomycurrenciesaccording to someclassic conditionswhich are calledBalassas-Samuelsen conditionsthere's a fundamentaltheoretical reasonif you took a20year periodwhere it mightappreciatebut I thinklooking forwardover the nextseveral yearswe know there isa very significantslowdownof the Chineseeconomy going onthe highlightEastAnd Southeast Asiapartely because of thatand there willtherefore I suspectbe more easingof Chinesemonetary policyand I thinkthat might tend toproducea further tendencyfor a declineagainst the dollarthe thing thatI would be verycautious ofand I waspleased to hearPremier Leesaying todaythat it wasnot the intentis to make acompetitive從Mario Draghi,who when askedWhat is the transmission mechanism of your QETalks about a fall in the value of the euroBut if the euro goes down and the yen goes downAnd the RMB goes downI mean,we're left with only one countryWhich is going upSo I think the sensible approach hereIs to run Chinese monetary policyTo achieve a reasonable stimulusTo the Chinese economyBut a noninflationary stimulusAnd to combine that probably with someManagement of the exchange rateSo that one produces some degree of stabilityRather than two wide oscillationsAnd I think I agreeThat the logical thing to do would beTo manage that somewhat against a basketThen rather than specifically against the US dollar還有一個非常重要的辨量必須要記住今年今年中國的外貿順差將會創紀錄的今年已經因為進口在迅速地說進口縮了百分之上半年縮了百分之15進口幾乎就是當然七八月份降了一點上半年還是略有增長的所以今年的外貿順差將會達到五千億美元以上那麼在貿易順差增加的情況下如果貶值的話但是我沒有ValueWaitWith the further increase of the trade surplusAnd the devaluation of RMBIf the trade volumeIf the trade surplus leads to theAppreciation of RMBThen it's a good thingBut at presentWe see the increasing pressure of downward economic growthAnd now we have more relaxedImport and strict exportThe international payment balanceis something that we have to considerThe more moneyMore money inflowOr more money outflowWell, I think toPack against the basket of currenciesIt's important to quite agree withThat we need a basket of currenciesBecause it isComplying with ourIt's in the interest of our long term interestBut if we stick toWe still stick toThe packing against US dollarAnd then we restart the reformThen we make our effort in vainSo I think we have to think about the mechanismMagnitude is importantOkWe have heated discussion aboutRMB interest rate reformIn 2015, there was another major eventwhich is also about RMBNovember this yearIMF is going toEvaluate RMBTo decide whetherRMB will be incorporated intoSDRWe know US dollar, euro, JapaneseAnd sterlingAre already in SDRThat will you voteFor the RMBTo be included into this basketWill you voteWell, yes, of courseWellSo we'll turn it at a different view hereWell, I think it has to be basedOn an objective evaluationThere are a set of criteriaThere actually weren't originallyWhen the SDR was set upBut when it was redoneAs the smaller basketWhen the eurozone currencies get togetherA set of criteria were written downAbout the extent to which is usedIn trading activitiesThe extent to which it is truly convertibleDoesn't have to be completelyFree capital account, etc.And I think if you look at those criteriaIt is absolutely certainThat some stage pretty soonIt may be one yearMaybe three monthsChina will be included inI don't think it makes much differenceWhether it's this year or next yearBecause I think the trend is goingSo I'm going to be a puristAnd say if you ask me to voteIn NovemberI will look at the staff papersAnd I'll see as best as possibleWhether the criteria are metI'm absolutely confidentThat the criteria will be metWithin the next few yearsBut I think it's quite goodTo have a rule-based approachTo these decisionsAnd maybe they won't be precisely metIn NovemberMaybe the IMF will sayIn NovemberWhether they are almost metBut these are the bitsThat have to occur before we saySo I'm a supporterOf China coming into the SDRBut I'm not going to sort of sayThat if I was on the IMF boardI'd necessarily vote on NovemberBefore I see the factsGreatWell, I spentThe last eight years in theCouncil of Ministers in EuropeAnd I've noticed thatRules are rulesBut they are sometimesPendant somewhatSoWe will never be puristWhen it comes to economic policyThe important thingI think is the criteriaThe ambition from the Chinese governmentTo be a part of the SDRI think is very goodAnd I think they should useThe criteria to continueThe reforms of the capital accountAnd given the important roleThat China is playingIn the world economyI think it's very naturalThat the R&B becomesA part of the SDR systemBut the important part hereIs that China continuesTo move towardsUppfilling these criteriaYou are very rightAnd according to my knowledgeThat the technical criteriaCritical criteria can be metUnder the tradeAnd also under the usableFreely usableBut the question is thatBecause the inclusion into the SDRNeeds the voting70% of the votingOf the IMF boardAnd we know that the United StatesPlus Japan accounts to23%So there's something trickyThere in NovemberWill you any of you want toI think Daokui or ProfessorWants to comment a little bit on thatWell, I am not representingThe Japanese governmentI do not know the ideaOf the Minister of FinanceMinister Asso'sYou disagree with themNo, no, no, this timeI hope we haveWith the agreementBut anyway, important point isWell, China already hasA huge size of the economyWhile the dollarDeterminated GDP of ChinaIs about 2.3Portimes of that of JapanAlreadyAnd about 60 timesOf that of the United StatesAnd China is theSecond-largest absorberOr importer in the worldSo China is alreadyPaying a very important roleOr in the world tradeAs I mentioned alreadyCurrency has a very important functionAs a means of exchangeMeans of paymentIn that senseIt is quite naturalThat we inviteLen Minbi to thePart of the SDRAt the same timeA kind of dynamic politicsIs requested or expectedBy invitingLen Minbi into the SDR basketMay this will accelerateThe reform of Len MinbiReform of the Chinese financial marketThis is exactly what I expectBut at that timeI'd like to talk about a little bitBeta experienceBeta lessons of JapanIn the 1990sWhile mid-90sWe hadThe Japanese governmentHad a very comprehensive financialLiberalizationOr liberalizationIn the name ofOr big financial big banWell, this was welcomedBy many economistsHoweverThe huge amount ofNon-performing loanA bad assetWere hiddenIn the balance sheetOf the banking sectorAnd because of thatThis liberalizationCreated theVery unstable asset market situationSo the sequence of the policyIs very importantThe first of all, I really expectThe bad loanYou provide theVery transparent information systemAnd provide theThe information about the bad assetShadow bankingIncluding shadow bankingAnd the disposal of a non-performing loanAnd this kind of very combined effortIs needed for the financialOr liberalization in ChinaBut we really expect thatBecauseThe Chinese are veryYou're playing a very important roleConsidering each side of the economyThank you, LoutenDo you share the same view?Well, what I wanted to say isYou've focused onThe voting rights at the IMFI very much hopeThat nobody is going to voteOn the basis of the politics of thisWe ought to approach the SDROn a technical basisAs to what is good for the worldBecauseA lot of what people sayAbout international currenciesIs, I think, complete nut and nonsenseThere's a belief that somehowBy having your currencyA reserve currencyIt makes you richerAnd you sort of fight againstThe hegemony of other peopleAnd that if you're the existing hegemonistYou should prevent itI remember back in the 1990sPeople telling me thatWe needed a euro in EuropeTo fight against the strength of the dollarAnd I remember thinking at the timeThat that was one of the mostLogically incoherent sentencesI had ever heardIt's just rubbishCurrencies don't fight one anotherAnd the size of your currency in the worldDoesn't necessarily give youA degree of advantageChina should seeInternationalization, the RMBNot as something which isNecessarily going to give youAll sorts of competitive advantagesBecause it won'tBut simply as the absolutely naturalAn automatic consequenceOf the rising size and importanceOf China in the economyAnd the rest of the worldShould see it the same wayAn awful lot of our languageOf currencies fighting each otherFor dominanceIs a statementWhich is simplySyntactically meaninglessSo there's no currency war倒可以叫这里面很多很好很好玩的事情Yes, something very funny insideWeatherWe should putRMB into SDRSDR is not a currencyAnd transaction volumeOr amount of SDRIs very smallFinancial product is dominatedBut SDR doesn't exist at allIf we talk about the criteria rulesYou do not have to artificially produce a ruleYou have to take SDRAs a basket of currencyOr kind ofIf we take it as a criteriaOf course, RMBWe'll be interested in toBe included into SDRIf you're not a part of SDRThe SDR is not the real SDRSo theoreticallyRMB shall be incorporated into SDRThe rules are not always constantThe rules are keeping changingYou knowSo given the size of the RMBAnd given that is a current accountIt's not open yetSo it is very meaningful for RMBTo be incorporatedThe second, how to be incorporated into SDRI don't know whether Japanese peopleIs going to vote for thatBut I think the American peopleBe quite cautiousThe Ministry of FinanceWhich is the leadingThis issueThey will privately informThe Chinese governmentThey will not vote at presentBut we can provide youOne, two, three, four, five conditionsAnd then if you meet these conditionsThen I'm going to vote for thatLess about the listRMB as international currencyOr other international currencyWhat are the benefitsAs international currencyOf courseThere will be a lot of thingsVery beneficialIf the US dollar is not an international currencyWhen the financial crisis happened to the stateIt will bring a lot of major crisisTo the international paymentThey have to borrow greatlyTo make up for its deficienciesAnd this will trigger a lot of systemic risksSo as international currencyIt will benefit the countryIt has a lot of advantagesTo make their currency internationalBut it takes time and the processOf being internationalizedIs quite complex and a long-term oneWell, Japanese has taken initiativeA great effort to internationalizeYen, but not successful in the endWell, the target is goodBut the whole process is complexAnd pain-takingI quite agree with Professor DaokuiOn that if RMB is internationalizedIt will address the kind of currency mismatchIf your asset and liabilityAre not denominated by the same currencyIt will suffer some crisisThe US hasn't such kind of issueBecause your asset and your liabilitiesOf the states are dominatedBy the same dollarDenominated by the same currencyThat is the US dollarI quite agree with thisIf international trade is denominatedBy RMBThen there will be no foreign exchange risksWe do not have to considerThat potential risksAnother point about votingI don't know whether the USWill vote for thatBut I learned from a friendFrom the stateThat the US may have to voteFor RMB's inclusion into SDRBecause the US has realizedIt is quite a mistakeNot to be the member of AIIBSomeone says thatIt is one of the biggest mistakesUS has made ever since World War IIWell, even the mistake has been madeSo the US will not make another mistakePlease identify who you areAnd try to be brave for the questionsAnd the lady in the firstAnd then the gentlemanThank you, teacher你好,我是Thank youI'm from BlueburgMy name is Zhou BoThank you for your wonderful insightsJust now, panelists have mentioned thatAs a payment currencyRMB has already been well acknowledgedAs an international currencyHowever, as an investment currencyAs the capital market in ChinaHas not been opened or liberalized fullyWe can see that the FDIAccounts for a very small shareOf the totalActually starting from last yearThe Chinese government has made a lot of effortTo liberalize the capital marketAnd we have the Shanghai Hong Kong ConnectAnd so my question isFor all the panelistsFor the liberalizationAll the further opening of the Chinese capital marketTo the foreign investmentIn the current contextWhere we have a big fluctuationIn both the stock marketAnd the bond marketWhat will be the impactI think I will add all the questionsSorry, only oneOk, yeahSo for Yiping and Professor DaokuiProfessor Li mentionedChina should kind of stabilizeIt's exchange rate going forwardBut with the foreign exchangeIt's kind of depleting very fastHow would China have the tools to do thatFor Professor HuangSo you say it should kind ofBe allowed to depreciateBut how isHow to distinguishAccessibilityIMF also saidIn the next two to three yearsChina should achieve managed floatThanksAnymore questions我們還把問題一起收集了We will collect all the questionsAnd answer them togetherConnecting the short to the longer termMy impression was alsoThere was already a paper by the IMFIt's proposed to delay the decisionOn the SDR accessionAnd probably a deal behind the scenesAnd moreover that thatContained a proposal to moveThe midpoint of the renminbiWhich then was exactly the activityTaken which took to this devaluationSo that seemed to be a stepWhich was much in line withAdvice from technical adviceFrom within the IMFBut probably also caused byResentment of the USTo support that voteSome people even argueIt requires an 85% voteSo I would like thePeople to comment on thatAnd then similar going forwardInto the long termIf a country opens the capital accountIt's always the sameIf you do it from a position of strengthAnd growthAnd international admirationYou get massive capital inflowEverybody's capital inflowsInvestment inflowsEverybody's happyIf you do it from a positionOf nervousnessAnd volatile marketsThere is the risk in ChinaOf course of capital outflowsAnd capital flightLike any other developing economyAnd my questionIn particular to those expertsFrom ChinaWhat do you see as a resultOf this volatilityThe last few weeksThe possibility that the openingOf the capital account will be slowed downDespite the first partOf my questionThe central bank doing what it canAnd what has been toldIn order to getThe remaining more internationalThank youMore questions?The lady here你好 我是第一彩晶的Hello, I'm from CBNToday we read newsThat the chief economistOf the central bank saidThat the PBOC has eased the conditionsThen we found that the offshoreRMB value is againstIs running against the current valueSo what will be the impact?One question for a Japanese expertBecause there are a lot of talksAbout further expansionOf your QQE programHowever, there's also another concernThat Japanese central banksBalance sheet cannot suffer anymoreSo how do you see theseTwo kind of different opinionsAnd if Japanese yenContinue to depreciateWhat will be the impactOn emerging markets' currenciesThank youWe can have one more question hereYes, my question isHow critical will be to provideMore transparency from the governmentFor becoming a real international currencyYou mean transparency communicationFrom the PBOCAnd transparency in the policiesAnd the information that the government providesTo the rest of the worldWe have collected enough questionsFor us to respondI think that maybe the ChinesePanelists respond firstAnd then they are我想先回答一下May I first respondTo the opening of the capital accountQuestionAccording to my observationThe opening of the capital accountWill be continuedAnd basically it will followThe original scheduleBut there is one conditionThat is for those itemsWhich are for those accountsWhich are not openedThey will receive more strict regulationsThe problem in China isIneffective or ineffective implementationSo for those malpracticesI guessI believe that the PBOCAnd the foreign exchange reserve officeWill strict the regulationAs for another questionAbout the foreign investmentIn the operation of the foreign investmentIn ChinaMy understanding isThat there should be further liberalizationHoweverThe key here is thatOur stock market should be improvedAnd the quality of the listed companiesShould be improvedWe should try to introduceHigh quality foreign companiesShort stocks into ChinaTake Apple as an exampleIt is making money in ChinaMany of its products are produced in ChinaAnd sold in ChinaGaining big profitsThen maybe we can have Apple stocksListed also in ChinaSo with a stable capital marketWe would have a stable flow of capitalAnd the R&B could be more appreciatedIn the international marketI agree with Professor LiAfter this latest round of fluctuationI'm sure PBOC will be more alertTo the fluctuationsAnd I believe that theIt is an appropriate timeTo advance the liberalizationOf the capital market or capital accountNow we enjoy a lot of favorable conditionsThen there's a low riskOf the outflow of the capitalHoweverReviewing the emerging marketsIn the past 30 yearsWe can find that the financial crisisIn those countries are usually triggeredBy the inflow of a large sumOf the foreign investmentAnd when theseForeinvestment flow outThe financial crisis occursSo I guessI believe that thisThe current market might beOffersMy offer a fairly favorable conditionFor the liberalizationOf the capital accountsThen how can we avoid the overDepreciationOr excessive depreciationMy suggestion isTo implement the proposalThat has been made in 2005That is to take referenceFrom a basket of currenciesNow we still have the roomTo interveneAnd the PBOC has the toolsTo interveneSo I don't thinkThere will be excessive depreciationAnd also to preventThe potential excessiveDepreciationI think the key here is toStabilize the Chinese economyWith a stable economyThe R&B could hardly depreciatePoint two thingsMoney is about Japan's QQEWhile I thinkMr. Kurada will continue the QQEEither expand its policyWhile important point isJapan's QQE isDifferent from that of the United StatesAnd some of the European countriesIn the case of the United StatesQQE policy was takenJust after the Lehman shockAt that timeJapan Bank of JapanDidn't do anything specialBut just two years agoThe Abe government decided to do thatIn order to conquer the deflationThe purpose is to conquer the deflationSo it is quite importantTo continue this policyOtherwise we cannotChange expectation in the marketSo I'd like to also supportMr. Kurada's ideaThe second point isCapture account liberalizationCapture account liberalization issueWhile it is very importantCapture liberalize these thingsHoweverThis will give investorsFreedom to investAt the same timeFreedom to make a capital flightIn that sense, as I mentionedThe sequence of the policy is very importantWhy asset marketIncluding stock marketAnd exchange marketSo volatileThe reasonOne of the main reason isThe real economy is very volatileReal economyOr GDP statistics is so reliableOr notMany people are watchingNot GDP statisticsNot electricity consumptionEtc.So it is very importantTo have the transparency of the economyAnd the reliability of the economyThe confidence of the economyAs was mentioned by Premier LiIt is quite necessaryAnd important for Chinese economyLotternaCan I just return to this issueOf what are the benefits ofI don't deny that there are someAnd you've mentionedThe benefit that your tradeCan be in your own currencyWithout exchange rate riskWhat do we know aboutWhat tends to happenThere is an extraordinary tendencyAcross the worldWhen we switchWe have a new reserve currencyFor it to go from oneWhich is sort of 70% dominantTo another which is 70% dominantWe've never had a 50-50 patternWe went from an environmentWhere sterlingUK sterling back in 1914Was 70% or 80%And then a few other currenciesUsed 10% or soAnd then we switched to a modelWhere the US dollar was dominantAnd people used the euroBut it's much less than US dollarThere seem to be some extraordinaryStrong processes wherebyThe world focuses onOne store of liquidityOne numeraireAnd I think we franklyDon't know how that's going to play outWhat I'm sure is going to happenAnd will be for the benefit of your economyAnd I think for other economiesIn East Asia and South East AsiaIs I think that the supply chainsOf South East Asia and East AsiaWill predominantlyDenominate in terms of using the RMBAs the transaction accountIn exactly the way that the euroIs not a huge reserve currencyOr an internationalized currencyIn terms of trade betweenLatin America and North AmericaOr Latin America and AsiaBut it is the dominant currencyIn terms of trade flowsBetween Poland and GermanyOr Turkey and GermanyIn one's immediate areaAnd along the supply chainsThat existI think we would see thatAnd that would be to the benefitHow about the capital sideIs that to the benefitNow clearly if you areA relatively small open economyWhich borrows and are not a reserve currencyAnd you tend to borrowIn US dollarsYou're a turkey or an IndonesiaThere is a disadvantageWhich is the exchange rate riskOn your capital accountHowever, I can't see an environmentMuch coming up in the futureWhere China is going to be runningSuch large current account deficitsThat it is a big borrowerFrom the overseasAnd therefore I think the relative advantageIn borrowing in RMB versus dollarsIs neither here nor thereAnd on that areaSome people sometimes sayBut we were if in a reserve currencyWe wouldn't have this riskIn our foreign exchange reservesJust be awareThat is a nonsenseForeign exchange reservesHave to be claims on another countryAnd unless the USIs going to start issuingIt's treasury bonds in RMBAs long as you runCurrent account surplusesAnd the US runsCurrent account deficitsYou're going to end up owningUS assetsAnd they're going to be denominatedIn dollarsAs for whether the USGet a huge benefitFrom being the international currencyIt's called the exorbitant privilegeAs presidentShe's got this one once called itObviously they have the factThat they can runLarge current account deficitsAnd they don't have to worryAbout how they'll be financedBecause someone in the worldIs going to want to hold dollarsOn the other handThat has been a double edged swordFor the USBecause the flip sideOf those current account deficitsHas been credit boomsWhich have occasionally got out of handAnd caused major problemsSo I think there is an advantageOn the trade sideI think it will show upIn the supply chainsOf East Asia and AsiaBut on the capital sideI think broadly speakingYou know, there'll be advantagesAnd disadvantagesAnd the disadvantages can be considerableTo the extent that JapanBecame a reserve currencyA internationally traded currencyA currency in which peopleIs speculatedIn the 1970s and 80sIt wasn't necessarilyTo Japan's advantageIndeed the very major appreciationOf the Japanese yenIn the late 1980sAfter the Plaza AccordsDriven by capital flowsWanting to invest in the Japanese yenBecause everybody thoughtIt was going to go relentlessly upWere a major problemAnd a major determinantOf the crash of 1990From which Japan's economyHas never fully recovered rapid growthSo just be awareThere are problems to be managedAs a result of this processAs well as some advantagesThank you, LieutenantWe only have one minute leftSo I think you have the final wordMaybe you want to adjust a little bitOn the transparency issueAnd other issue if you likeI think the major challengeFor the Chinese economyIs to continue to grow fastWhile reducing the dependency on investmentsThis means that the domestic economyIs going to play a much biggerAnd more important roleThe important thing for the global economyIs that China continues to growThat is a part of a stable global developmentSo the best way of solving thisIs actually to focus on structural reformIn the domestic sectorTo get the state-owned enterprisesTo be more efficientTo have a larger part of the resource allocationDone by market pricesThis is difficultAnd it's the same problemThat we have in EuropeIt's the same problemThey have in JapanThat the domestic sectorIs too regulatedAnd too little competitiveAnd that is actually the best wayOf stabilizing the developmentOf the currencySo to do the transitionFrom a high investment economyWhile also opening upThe domestic economyAnd being more efficientTransparency issueWell, transparency will helpBut we have seen many transparentCentral banksLike the Federal ReserveCommit terrible mistakesSo it really doesn't helpIf you don't dealWith your fundamental structural problemsAnd I would agree with Lord TurnerThat the reserve currencyHave actually helped the USTo make a number of very serious mistakesGreat, we're just on timeAnd please join me with a big applauseTo thank our panelistsAnd we hope that the R&BWill become international currency soonAnd please enjoy the rest of the meetingThank you