Financial opening had been a sticking point with Mr Trump, who's accused China of being a one-sided beneficiary of global commerce.
RMB Internationalisation: Where to Next? | Bulletin – September Quarter | RBA
UBS Group AG late on Friday became the first global firm to win approval from Chinese regulators to gain control of a local securities joint venture after sweeping financial opening measures were begun last year. Huatai Securities Co got the green light to list depositary receipts on the London Stock Exchange, making it the first Chinese firm to obtain permission to issue shares through the stock-trading link between LSE and the Shanghai Stock Exchange that's expected to start in coming weeks.
Chinese authorities issued final rules allowing its banks, which are among the world's largest, to expand in the asset management business. Banks' wealth management units can invest up to 20 per cent of their own funds into products issued by themselves.
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Policymakers also eased margin requirements for stock futures trading, reversing a clampdown imposed in Markets cheered when they reopened Monday. A Bloomberg Intelligence gauge of brokerages was set for its biggest gain since Oct 30 and the main equity index rose with the yuan.
Internationalising China’s Financial Markets
Pressure from the US and other countries seems to be pushing China to open up quicker than policy makers probably envisioned a year ago, said Andrew Polk, co-founder of Beijing-based research firm Trivium China. Skip to main content.
China embraces financial opening away from Xi-Trump glare. Mon, Dec 03, - PM.
China announced a number of steps over the weekend that take the country closer to the promised opening of its financial markets, away from the glare of the high-stakes meeting where Presidents Xi Jinping and Donald Trump called a truce in their trade war. World's wealthiest families stockpiling cash as recession fears grow.
The goal: internationalisation. A key part of this integration has been the internationalisation of the renminbi RMB.
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The native benefits are somewhat obvious: reduced exchange-rate risks for exporters and importers and support in limiting risks to Chinese trade from supply shocks to the US dollar as was the case during the global financial crisis. The international economy also stands to benefit however; renminbi internationalisation provides broader access to offshore renminbi capital markets, which can reduce borrowing costs. And for international companies operating in China, using the renminbi reduces currency risks and can deliver better pricing. To be sure, there are also disadvantages.
China embraces financial opening away from Xi-Trump glare
Additionally, if the renminbi becomes a reserve currency, the central bank would bear more responsibility for the rest of the world as the macroeconomic policies of reserve-currency-issuing countries often have significant spill-over effects. This could reduce its independence. Internationalisation also stands to increase the probability of asset bubbles and financial instability if the purchase of renminbi-denominated assets becomes more liberalised. Much of the answer lies in understanding the success of internationalisation to date.
China has so far taken the road less-travelled for its currency internationalisation, trying to develop an offshore renminbi market while maintaining strict capital controls and tightly regulating financial markets. Renminbi internationalisation seemed to take off between and Import payments exceeded renminbi export payments, creating a currency outflow that saw offshore renminbi deposits increase from next-to-nil to more than USD billion by