Beijing promises currency reforms, but on its timetable
Chinese officials in US say yuan will be made more convertible, but only after capital outflows are cut and corporate debt is curbed
China has given assurances on currency convertibility and easier access to its financial markets, while also warning the US not to carry through on threats to erect trade barriers.
The messages were delivered by People’s Bank of China Deputy Governor Yi Gang and Chinese ambassador to the US Cui Tiankai at a conference in New York. They show a China eager to steer a steady course with the US after the summit between presidents Donald Trump and Xi Jinping in Florida this month.
Yi told a conference at Bloomberg’s New York headquarters that China would prioritise improving the convertibility of the yuan after it succeeded in cutting capital outflows and reducing overleveraging in its domestic corporate sector.
“We have to work on removing existing barriers to the internationalisation of the renminbi so that we can make it a freely usable currency,” Yi said, adding that exchange rate reform would be “market-driven” and based on the needs of Chinese companies and households.
Responding to feedback from foreign financial institutions, the PBOC intended to allow “better service for offshore renminbi transactions” including easier payment infrastructure and issuance of more licenses for foreign institutions to underwrite and settle yuan-denominated bonds, Yi said.