Cross Border Capital Flows Are Frequent And Capital Markets Are Facing New Challenges.

In recent years, great progress has been made in the internationalization of the RMB, and the institutional arrangements have been "coming to an end".

First, RMB capital account convertibility is expected to be realized within the year. Zhou Xiaochuan, governor of the people's Bank of China, said at the 2015 annual meeting of China's high-level forum recently that China proposed to accelerate RMB capital account convertibility 4 years ago. 2015 is the last year of 12th Five-Year. It will strive to achieve this goal through all aspects of reform.

Wang Yungui, director general of the comprehensive administration of the State Administration of foreign exchange, recently said at a news conference that the administrative license for foreign exchange administration under direct investment has been basically abolished. Now 85% of the capital account is convertible, it can be said that only one "last mile" is left to achieve the convertibility.

At present, offshore funds mainly flow into A shares through QFII, RQFII and Shanghai and Hong Kong channels. This year, under the background of capital account convertibility and speed increase, relevant systems will continue to be perfected to facilitate offshore capital inflow. This includes the continuous relaxation and possible cancellation of QFII and RQFII quota, as well as the continuous improvement of the Shanghai Hong Kong pass system and the opening of Shenzhen Hong Kong link.

In March, the QFII quota limit was broken. Previously, the foreign exchange bureau stipulated that the investment quota of a single QFII should not be less than $50 million per time, and the aggregate amount should not be higher than the equivalent value of US $1 billion. In December 2012, the foreign exchange bureau relaxed the restrictions on the QFII quota, stipulating that the investment quota of sovereign funds, central banks and monetary authorities could exceed 1 billion dollars. In March 26th, foreign exchange data showed that Fidelity Fund (Hongkong) Limited received a US $1 billion 200 million QFII investment quota in March 26th.

The foreign exchange bureau issued a circular recently that the foreign exchange capital of foreign invested enterprises will be managed by foreign exchange settlement. The notice has been implemented since June 1st. This means that foreign enterprises will fully say goodbye to the "payment settlement system" and freely choose the timing of capital settlement. This also means that the level of convertibility under direct investment is further expanded.

The two is the gradual accession of RMB to SDR. SDR is an international reserve asset created by IMF in 1969. It is also used as a nominal monetary unit to measure the share allocated by IMF members. at present SDR The basket includes four currencies: the US dollar, the euro, the pound and the Japanese yen. In May, the IMF board of directors will introduce China's relevant Renminbi into the basket of SDR currencies. appeal In the fall, the IMF board will conduct a five year assessment of the SDR basket of currencies. It is expected that the IMF board will decide on whether the renminbi will be included in November.

Three is A shares Actively prepare for war to be included in the MSCI index. Attracting foreign funds to invest in A shares is conducive to optimizing the structure of A share investors and promoting stable development of capital market. This is a consistent policy of China's capital market opening to the outside world. Promoting A shares into the internationally renowned index will effectively expand the international impact of China's capital market and promote long-term institutional investors investing in the A share market.

Insiders said that if A shares successfully joined the international index, asset managers and ETF funds tracking the global index and regional index would deploy A shares in large numbers. An agency issued a report that if A shares were included in the MSCI index, the allocation of A shares in theory would exceed $2 trillion.