The most aggressive international accusation against the RMB is China's number one trading partner, the United States. In recent years, because the United States is heavily in debt overseas, the Federal Reserve has adopted the method of increasing currency issuance to eliminate part of its debts in order to stimulate the economy. As a result, the hard currency dollar trend in the past has been depreciating, which has seen a significant decline in the euro and yen, the main world settlement currencies, causing costs to countries such as Europe and Japan to rise, exports are sluggish, and the economy is trapped in a quagmire of low growth.

The RMB, which has always been pegging the US dollar-linked exchange rate mechanism, has also continued to compare prices to most countries in the world. The prices of export commodities have become very competitive, effectively expanding the share of international trade, and the import and export surplus has continued to increase. In just a few years, the country's foreign exchange reserves have been approaching from 100 billion US dollars to the target of 100 billion US dollars.

Other countries were very jealous of the situation of China's manufacturing in overseas conquering cities and territory. The United States, the initiator, not only did not look for problems in itself, but instead believed that China secretly subsidized exports and lowered the exchange rate, which was an act of unfair competition. Using this as an excuse, it constantly suppressed the appreciation of the Chinese RMB on international occasions to solve the so-called "imbalance of imports and exports". It also incited other countries to join this "** chorus" and repeatedly attacked China's financial and foreign exchange policies. I remember that the RMB appreciation storm in Yang Xing's previous life caused China to fall into a long passive situation.

But in this life, after Yang Xing's allocation, the State Administration of Foreign Exchange has become much more confident about the reform of the foreign exchange system, and has a greater courage and a greater vision on the issue of RMB exchange reform. At this time, the policy of suddenly announcing the abandonment of keeping the US dollar and turning to a basket of currencies is no longer praised by many foreigners like in the previous life, but what they received is more doubt. Because the world economic crisis broke out in the previous life, the RMB exchange reform was forced to pull back, and the implementation of a linkage exchange rate mechanism of keeping the US dollar for a period of time has caused wider suspicion in the international community, and in fact it has a counterproductive effect on the exchange rate process.

Under Yang Xing's encouragement, the State Administration of Foreign Exchange put down its burden and proactively announced the following foreign exchange management companies and several central sovereign funds. Overseas financial centers such as Hong Kong, Singapore and London, which were preparing for the establishment of overseas RMB centers, included the US dollar, euro, yen, Singapore dollar, etc. as a basket of currencies into the RMB exchange rate reference system, giving the outside world a relatively fair and transparent impression and was well received by the market. Due to the pressure from the United States and others, the RMB appreciation is highly expected, and the settlement volume of overseas transactions of the RMB has increased significantly, and there are signs of competing with the only Asian settlement currency, the Japanese yen.

International investors are interested in securities denominated in RMB. In addition to being optimistic about their appreciation potential, they are also refreshing about the "Special Drawing Rights" (SDR) added to a basket of currencies that the exchange rate reform is focused on. SDR is a reserve currency created by IF in 1969 and is also called "paper gold" by the outside world. It was originally created to support the Bretton Woods system and later also called "SDR". SDR is not a tangible currency, but is regarded as an accounting unit for the change in the share of IF member states, and cannot be directly used for trade and non-trade payments.

For example, if the UK wants to borrow yen, it can exchange it with Japan with its own sdr share, and Japan will provide the corresponding yen to the UK, so that the sdr shares in Japan will reduce, but obtain more debts. In theory, who has the largest sdr share, can get the greatest say in Imf. Of course, since its establishment, Americans have always occupied the largest share of Sdr. No country has dared to challenge the Americans' authority in Imf, even Japan in its heyday.

The current SDR fixed value is basically composed of four currencies. The proportion is US dollar accounted for 44%, the euro accounted for 34%, and the yen and the pound accounted for 11%. But this brings a big problem. The current SDR does not effectively represent changes in the international pattern and monetary system. Among the SDR shares mainly based on export ratings, the export volume of developing countries such as BRICS, gold and diamonds led by China are increasingly occupying the mainstream of the international market. China's export share accounts for the top three in the world, but the RMB has always been excluded from the SDR fixed value. The SDR consists entirely of Western currencies, which increases the risk of international trade, which is very unfair.

IMF has long been aware of this. Many member states of the International Monetary Fund have proposed to increase the SDR share of developing countries led by China to increase their voting rights within the organization and weaken the seats and proportions of Western countries. Now the RMB exchange rate reform proposes to use gold and SDR as part of its currency basket, which not only reflects the increase in its hard currency quality (can be directly exchanged for gold), but also poses bold challenges to the international monetary system with the US dollar as its main reserve currency.

The Governor of the People's Bank of China and the Director of the Foreign Exchange Administration explained why the RMB exchange rate should be linked to the SDR. After World War II, with the establishment of the "Bretton Woods" international monetary system, the US dollar was directly linked to gold, and the currencies of various countries were recognized by various countries, which meant that the US dollar replaced the pound and became the basic currency in international trade. The US dollar had a magical power to transcend national boundaries. As a sovereign currency, the issuance of the US dollar was completely controlled by the Federal Reserve, so the United States enjoyed the dividends of coin minting. Although foreign debts were as high as a mountain, the United States could completely pass on risks by issuing US dollars. Any effect of the Federal Reserve's expansion or contraction of monetary policy by the US dollar issuer will have a chain reaction in other countries.

Unfortunately, the Federal Reserve's monetary policy has always been "doing one's own way" because it first considers the quality of US economic policies. As for the impact these policies will have on other countries, it is never within its consideration. The result is often the Fed's turmoil, and its spillover effect quickly affects other countries and the global monetary and trade system. A Fed chairman has a famous saying, "The US dollar has always been your problem, not my problem", which fully reflects the Fed's selfish attitude of being unhealthy and only being selfish.

However, since the US GDP once occupied half of the world economy after World War II, the world could only allow the United States to use the US dollar to kidnap everyone. Even though the United States later announced the decoupling of the US dollar and gold, allowing other countries to bear the huge risk of currency implementation of floating exchange rates, other countries still dared not speak out, and still regarded the US dollar as the only base currency for international trade. However, with the development of the times, Europe joined forces to form the EU and the rapid rise of the Asian economy, and all the confidence to challenge the United States. Other countries except the United States have a consensus that there are major flaws in the current international monetary system. It is time to establish a super-sovereign reserve currency to replace the US dollar. China's exchange rate reform obviously believes that SDR is a good choice.

In the past, people were frightened by the power of the United States and dared not speak out, but China's move was undoubtedly like the straightforward yelling of the children who were not wearing clothes in "The Emperor's New Clothes", which made many developing countries very interested and made Americans panic. Not only did they put out the fire everywhere, but also lowered the tone that had been attacking the depreciation of the RMB a lot.

As the main planner behind this round of exchange rate reform, Yang Xing received many benefits. As soon as the restructuring was completed, Xingfu Bank, which shifted its core business from high-risk investment to traditional bank credit, got a piece of pie from the sky. At the same time, it was granted the issuing bank of the new Hong Kong dollar and Macau dollar by the Hong Kong and Macau governments. This is a great honor. It not only represents that Xingfu Bank is rooted in Hong Kong and Macau, but has won the recognition of the people in the region, but also said that Xingfu Bank has become an important pawn in the RMB exchange rate reform and will end up fighting with overseas financial experts.

After the return of Hong Kong and Macau, due to different political systems, the central government continued to issue their own currencies. Because of its small size and economic activities have long depended on Hong Kong, half of the circulating in the market is Hong Kong dollars. Even if it issues Macau itself, it only accounts for 30% of the entire monetary system. The two banknote issuing banks, Bank of China (Macau) and Portugal Atlantic Bank have little reputation internationally, so they adopted a linkage exchange rate system for the Macau dollar to peg the Hong Kong dollar, and their financial influence is weak.

However, the three banknote issuing banks in Hong Kong are all famous. Bank of China (Hong Kong) is the earliest stronghold established by state-owned banks overseas. The other two HSBC and Standard Chartered Bank are world-renowned multinational banks. Issuing currencies is the highest recognition of a bank's ability in the region. The bank name and the signature of the president printed on the banknotes of many countries are a valuable intangible asset. Only banks with the most credibility and reputation can enjoy this honor. Originally, the three bank issued by Hong Kong dollar banknotes were all time-honored brands that have been established for more than a hundred years. Xingfu Bank was established less than ten years ago and was able to obtain the right to print money. It shows that Zhongxing Group has been investing and expanding unremittingly with Hong Kong and Macao as its core, and finally won the recognition of its performance by the government and the public.

The Hong Kong dollar issuance adopts a standard linked exchange rate system. It requires all Hong Kong banknote issuing banks at a fixed exchange rate of 1 USD to HK$7.8 and issue Hong Kong dollars in accordance with the rigorous and prudent Hong Kong Monetary Authority system. In May this year, the Hong Kong Monetary Authority carried out a major reform of the Hong Kong dollar-linked exchange rate system, expanding the exchange rate range between the USD and the Hong Kong dollar to between 7.75 and 7.85, and promised to buy Hong Kong dollars at 1 USD to prevent the Hong Kong dollar from becoming too weak, and buy the USD at 1 USD to prevent the Hong Kong dollar from becoming too strong.

Compared with the RMB that cannot be converted freely under capital accounts, the Hong Kong dollar is actually a disguised US dollar. The road to marketization and internationalization is undoubtedly beneficial to have the Hong Kong dollar as a buffer. Although one day after the RMB can be completely converted, the Hong Kong dollar may follow the footsteps of the Macau dollar, gradually become marginalized, and even integrate into the RMB system. However, for a long time, the Hong Kong dollar will serve as a reference for the liberalization of the RMB and an assistant for establishing an overseas center. The Hong Kong dollar's international status will even overshadow the brilliance of the RMB in a short period of time. Xingfu Bank, as a banknote issuing bank, has made a lot of profits.

I was running around and rushing around, so I quickly sent a chapter to give me some motivation for monthly tickets and other things!
Chapter completed!