Can the Chinese bond market facilitate a globalizing renminbi?

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dc.contributor Bank of Finland Ma, Guonan Yao, Wang 2016-02-16T08:11:34Z 2016-02-16T08:11:34Z 2016
dc.identifier.isbn 978-952-323-087-3
dc.identifier.issn 1456-5889
dc.description.abstract A global renminbi needs to be backed by a large, deep and liquid renminbi bond market with a world-class Chinese government bond (CGB) market as its core. China’s CGB market is the seventh largest in the world while sitting alongside a huge but non-tradable and captive central bank liability in the form of required reserves. By transforming the non-tradable cen-tral bank liabilities into homogeneous and tradable CGBs through halving the high Chinese reserve requirements, the size of the CGB market can easily double. This would help over-come some market impediments and elevate the CGBs to a top three government bond mar-ket globally, boosting market liquidity while trimming distortions to the banking system. With a foreign ownership similar to that of the JGBs, CGBs held by foreign investors may increase ten-fold by 2020, approaching 5 percent of the 2014 global foreign reserves and facilitating a potential global renminbi, especially in the wake of the renminbi’s inclusion into the basket of the IMF Special Drawing Rights.
dc.format.extent 30
dc.language.iso ENG
dc.relation.ispartofseries BOFIT Discussion Papers
dc.subject Bofit-kokoelma
dc.subject SP
dc.subject RP ST
dc.subject Kiina
dc.subject.other bond market
dc.subject.other government bond market
dc.subject.other renminbi internationalization
dc.title Can the Chinese bond market facilitate a globalizing renminbi?
dc.type Paper
dc.identifier.urn URN:NBN:fi:bof-201602161028
dc.subject.jel F02
dc.subject.jel E42
dc.subject.jel E44
dc.subject.jel E58
dc.subject.jel G10
dc.subject.jel H63 BOFIT Discussion Papers
dc.series.year 2016
dc.series.number 1/2016
dc.series.sortingnumber 0001 6.2.2016
dc.subject.yso obligaatiot
dc.subject.yso valuuttapolitiikka
dc.subject.yso valuuttavaranto
dc.subject.yso globalisaatio
dc.subject.yso valuutta
dc.subject.yso keskuspankit
dc.contributor.orgunit Institute for Economies in Transition (BOFIT)

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