Launch of 2019 RMB Internationalization Report in Seoul and Seminar on China-Korea Financial Cooperation

On the afternoon of October 4, the launch of 2019 RMB Internationalization Report in Seoul and Seminar on China-Korea financial Cooperation jointly sponsored by IMI, Renmin University of China, Korea Institute for International Economic Policy (KIEP) and International Business School of Zhejiang University was held in Seoul. Prof. Ben Shenglin, Co-director of IMI, Dean of the Academy of Internet Finance, and International Business School of Zhejiang University, Prof. Zhao Xijun, Associate Dean, School of Finance, RUC, Prof. Tu Yonghong, Deputy Director of IMI, Professor, School of Finance, RUC, Yang Pyeongseob, Associate Dean of KIEP, Dr. Kang Taesoo, former vice president of Central Bank of Korea and senior researcher of KIEP, Dr. An Sungbae, general director of Macroeconomic and Financial Research Office of KIEP, Prof. Chai Hee-Yul of Gyeonggi University, Prof. Hyun Suk and Prof. Kim Jung-sik of Yonsei University, Prof. Baek Seungkwan of Hongik University, Prof. Kim In-chul of Sungkyunkwan University, Prof. Rhee Chang Ook of Seoul women's University and other experts and scholars attended the meeting and delivered speeches. Dr. Kim Hyo Sang, director of International Financial Research Office of KIEP, chaired the meeting. This is the first time that RMB Internationalization Report was released in Korea. Dr. Yang Pyeongseob first delivered the opening speech. He pointed out that the economic and trade exchanges between China and Korea have entered the “321 era”, that is, the gross bilateral import and export has exceeded 300 billion dollars, the direct investment has exceeded 200 billion dollars, and the number of personnel exchanges has exceeded 10 million, which has a good prospect for development. We should seize the fourth industrial opportunity represented by financial technology opportunities, further active financial cooperation, find a win-win cooperation. Prof. Tu Yonghong interpreted the RMB Internationalization Report 2019. She first introduced the current situation of RMB internationalization and pointed out that the RMB Internationalization Index (RII) has steadily rised, from 0.02% in 2009 to 2.8% in the first quarter of 2019. RII has experienced a strong rebound after a correction, and RMB direct investment and official reserves constitute the annual highlights. Then, she analyzes the five driving forces and four challenges of RMB internationalization, which shows that long-term and unremitting efforts are needed to realize RMB internationalization. Finally, she demonstrated the relationship between high-quality development, high-level financial opening and RMB internationalization, and put forward the future work focus of RMB internationalization from the aspects of financial market development, financial infrastructure construction, macroeconomic policy coordination, etc. Dr. Kang Taesoo commented on the theme of "Road to RMB internationalization". He pointed out that China and Korea have close economic and trade cooperation. China is the largest exporter of Korea, and the potential demand for RMB trade settlement is huge. However, the bilateral trade is still mainly settled in US dollars at present and the matching degree between financial services and real economic demand is low. In the future, both sides should strengthen financial cooperation, carry out trade and financial two-wheel drive, and promote the internationalization of RMB. Later, Professor Zhao Xijun and Dr. An Sungbae delivered keynote speeches successively. The theme of Professor Zhao Xijun's speech is titled “High Level Opening of Financial Industry and RMB Internationalization”. He introduced the measures, fields and achievements of the opening up of China's financial industry, and pointed out that expanding the opening up of the financial industry is an inevitable requirement for China's economic development to enter a new stage, which can promote the establishment and improvement of China's system and rules, at the same time, reflects the high standard opening of finance, and is conducive to the continuous promotion of the status of RMB. However, the openness of China's financial industry still has much room to improve. The next stage of work will focus on the opening of the financial market, especially the capital market, which is the key factor to enhance the international status of RMB. Dr. An Sungbae delivered a keynote speech entitled “Crypto Assets and Capital Flows”. Taking bitcoin as an example, he pointed out that crypto assets have some transaction characteristics such as anonymity, cross-border circulation convenience and are easy to be used by illegal criminal activities such as money laundering and drug trade, which also aggravates the speculation color of blockchain industry and becomes another channel of capital outflow. In this regard, countries should strengthen the regulation of the field of encrypted assets, carry out close international regulatory cooperation, and strengthen the risk management of encrypted assets transactions. The roundtable discussion was chaired by Ben Shenglin. The topics of discussion included China-Korea Financial Cooperation and Digital Economy and Financial Technology. Professor Chai Hee-Yul expressed his views on regional financial cooperation in Asia. He believes that we can learn from the experience of ECU (European Currency Unit) to promote the establishment of digital currency alliance between China, Japan, Korea and other Asian countries and strengthen regional cooperation. Professor Hyun Suk pointed out that the path of RMB internationalization includes the construction and development of onshore and offshore financial markets, the use of financial technology to strengthen the linkage between onshore and offshore financial markets, and the opening of financial markets. Professor Baek Seungkwan pointed out that China may also move towards floating exchange rate system after the opening of financial market. Whether it can maintain the stability of RMB exchange rate is a matter of concern. Professor Kim In-chul affirmed the importance of capital market opening, and stressed that we should fully understand the problems and challenges brought by capital market opening, and China should gradually promote capital market opening. Professor Kim Jung-sik pointed out that there are similarities between China and Korea. He affirmed the 30-year long-term strategic plan of RMB internationalization and believed that it is worth learning by Korea. According to Professor Rhee Chang Ook, building trust is an important factor in the internationalization of RMB. There should be a cooperative attitude between governments, and the monetary authorities should have the ability to stabilize the market. Finally, Professor Ben Shenglin made a closing speech to the conference. He expressed his gratitude to KIEP and IMI for their cooperation in publishing the RMB Internationalization Report and carrying out discussions on financial cooperation between China and Korea. He affirmed a lot of work and academic achievements of IMI for RMB internationalization in the past decade, and pointed out that the prospect of RMB internationalization is bright, but the process is tortuous and has a long way to go. Also, he stressed that in the process of capital market opening, we should pay close attention to the trend of international capital and prevent the influx of hot money. Finally, he believes that Northeast Asian countries such as China, Japan and Korea have a good foundation for cooperation and broad prospects for cooperation. He hopes to strengthen cooperation between China and Korea in the future and contribute to human development.

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