[21-12] Recent trends of liberalization of capital transactions
December 27, 2021
Yosuke Russia: Teikyo University Faculty of Economics
Abbreviation
Graduated from the Faculty of Law of the University of Tokyo in 1980 and joined the Bank of Japan.He retired in the Bank of Japan in 2011 after working as a secretary of the China Embassy Economics Department, Deputy Director of the Bank of Japan Hong Kong Office, and the first Bank of Japan's first Beijing Office.After working at Shinkin Chuo Bank and Nihon University, he has been in his current position since April 2018.He has authored "Chinese Economic Macro Analysis" (co -authored), "Co -design of East Asian Regional Cooperation" (co -author), "Current status and issues of the Chinese capital market" (co -author), "Reality of China's Foreign Economic Policy" (co -authored)Such.
In this column in September this year, the People's Bank of China announced on September 19, the 2021 RMB internationalization report (hereinafter referred to as "report"), but this time, the trend of liberalization of capital transactions.I would like to consider more detail.
Internationalization of the yuan through Hong Kong
As mentioned in this column in September this year, we will consider the rise in the RMB payment ratio to the international transactions of China, and the RMB is widely used worldwide.The former is relatively steadily progressing, but the latter has not yet progressed enough.One of the reasons why the latter has not progressed is that capital transactions are still widely regulated or supervised in China.In particular, in terms of short -term capital transactions, in Japan, the real demand principle of foreign exchange forward transactions in April 1984 was eliminated by the elimination of the "yen retrofit regulation", which is a regulation for bank exchange positions in June of the same year., Short -term capital transactions have been substantially liberalized.In China, the principles of the forward transactions and the bank exchange position regulation are still firm, and short -term capital transactions are strictly restricted.However, the investment of bonds and stocks, which are relatively long -term capital transactions, has been promoted to some extent.
In this "report", the ratio of the paid of the human -built in the 2020 China's paid external paid is 46..It is indicated as 2%.Eleven years after the start of the RMB internationalization in July 2009, the effects of the RMB, which were virtually 0%, grew to a level of 50%of the total.On the other hand, for the current account, the ratio of the people of the people in the total transaction is 17..It is only 8%.This means that most of the capital transactions are being made in the people of the people.On the other hand, if you look at the affiliate of the people by region, Hong Kong is 46 as a whole..It occupies a large part of 0 %.Therefore, it can be seen as a center of capital transactions with Hong Kong by the Chinese yuan.By the way, next to Hong Kong is Singapore 12.9%, 5 in the UK.4%, Macau 3.7%, Taiwan 2.Following 7%, Japan is the 6th place 2.It is 6%.
Capital trading between Hong Kong and mainland China
Speaking of capital transactions performed in the people of the people of the people of the mainland China and Hong Kong, the first RQFII (the Hermine -RMB overseas institutional investment system) is listed.This was introduced in Hong Kong in December 2011, and the conventional QFII (overseas institutional investor system) sends money from overseas to foreign currency, and invests in securities such as stocks and bonds in China.On the other hand, remittances from abroad are performed at the RMB.In this system, the upper investment limit was set for each institutional investor.After that, it was recognized by overseas countries other than Hong Kong, but looking at the upper limit of investment as of May 2020, the total of Hong Kong institutional investors is 365.1 billion yuan, 722.9 billion in the world.It accounts for more than half of the original.
Next, the Shanghai / Hong Kong Stock Connect (Ko -dori), which started in November 2014, is listed.As described in this column in July 2019, by linking the Shanghai Stock Exchange and the Hong Kong Stock Exchange, investment through a financial institution that participates in the other stock exchange on a securities traded on one stock exchange.It became possible to do.In December 2016, the Shenzhen / Hong Kong Stock Connect (Fukudori Dori) was also launched.For the currency used for investment, the remittance from Shanghai / Shenzhen to Hong Kong is used by the RMB for the remittance from Hong Kong to Shanghai and Shenzhen.Initially, the upper limit of the day of the day was 10.5 billion yuan from China to Hong Kong to Hong Kong to Hong Kong to 13 billion yuan, but in May 2018, the former was 42 billion yuan.The latter was 52 billion yuan, both yielded four times.
In July 2017, a system called the Bond Connect (Ticket Union), which allows overseas institutional investors to buy and sell in the banking bond market on mainland China via Hong Kong.At this point, Hong Kong's bond payment organization (CMU), which is only for investment in Hong Kong to mainland China (northern), the bond registration settlement mechanism in mainland China, and the Casodian Bank system that manages deposited securities.Linked, overseas institutional investors can trade bonds handled directly in the mainland of China and directly handled in the inter -bank bond market through an account provided by CMU.There was no investment limit on the north.
Recent trends
In May 2020, the investment limit for each QFII and RQFII institutional investors was abolished.This is a major event in terms of liberalization of capital transactions.Looking at the securities investment balance from overseas by Chinese foreign asset debt statements, 34 at the end of 2020..It shows a significant increase of 6%.
On September 10, 2021, a crossborder welsh management Connect (straddling border rosai -dori) started in the so -called "Daigan Ward (Grator Bay Area)" between Hong Kong, Macau and Guangdong Province.Investors in Guangdong Province can invest in investment products sold by Hong Kong and Macau banks (facing south), and investors in Hong Kong and Macau can invest in investment products sold by Banks in Guangdong Province.Facing north).The upper limit of investment is 150 billion yuan for both north and south, and individual investment limit is set to 1 million yuan.
On September 24, the south facing the Bond Connect (Ticket Union) began.Investment in bonds in Hong Kong from mainland China has been possible by QDII (domestic qualified institutional investment system) and RQDII (Hermany -built domestic investment institutional investment system), but will be implemented in Bondonnect in the future.Through the link between the Hong Kong bond payment organization (CMU) and the mainland China's mainland, it has become possible to trade more conveniently and quickly.At the beginning, the investment institution on the mainland China side is a primary dealer (first -class trade merchant) for public market operations approved by the People's Bank of China, and the Hong Kong side trading partner is designated as the Hong Kong Financial Management Bureau (HKMA).It is considered a market maker.There is no investment limit on the north, but the south facing has a total of 500 billion yuan per year and 20 billion yuan a day.
Liberalization of long -term capital trading is steadily progressing
As described above, China's long -term capital transaction liberalization is steadily progressing, centered on Hong Kong.According to the Deputy Governor of the People's Bank of China at the Stock Connect -facing south -facing ceremony held on September 24, "This south -facing starts, the Central Government will keep and increase the status of the Hong Kong Financial Center.It is a sign of high -level emphasis, embodies the fact that Hong Kong's long -term prosperity, stability, and determination of development and determination are supported by the central government. "The start of the crossborder welsh management connect and Bondonnect south -facing south -facing in September this year is a measure that promotes the liberalization of capital transactions and promotes the internationalization of the RMB, and is upset by the enforcement of the National Safety Law.The aspect of leverage by the central government to the Hong Kong financial market is rich.
There is no doubt that these measures have become more convenient for capital transactions between mainland China via Hong Kong and overseas.In the future, there is a possibility that a business related to capital transactions between mainland China and overseas will be more active in Hong Kong.As a result, it is expected that the ratio of human -built settlements in China's foreign transactions will increase steadily.
(Completed)