There Is No Hard Landing Trend In China'S Economic Development

Fang Gang, a well-known economist and an expert member of the people's Bank of China monetary Committee, said in a forum held here today that although inflation is still high, there is no hard landing trend in China's economic development. He also said that if the RMB appreciates too fast, it will stop in the next two to three years, or stop its appreciation.

Asked whether there is a risk of a hard landing in China's economy, Fang Gang said.

Fang Gang did not respond directly to market rumors that the central bank would increase interest rates in the Dragon Boat Festival or in the short term.

In the last 8 months, he said, the people's Bank has carried out more and more frequent quantitative policies than interest rates, with the US and other economies still at zero interest rates, so increasing interest rates will increase the difference between Mainland China and other countries, causing more capital inflows.

He also believes that the central bank will increase the deposit reserve ratio, issue central bank bills and control.

Regarding the internationalization of RMB, Fang Gang said that the internationalization of RMB has been rapid in the past two years, and the internationalization of RMB is beneficial to China. It can enhance the competitiveness of enterprises in terms of trade and reduce the cost of exchange. However, we must pay attention to the two risks arising from the process. First, the import of goods from the mainland is mainly settled in RMB, but exports are still mainly settled in US dollars. With the internationalization of RMB, the country's foreign exchange reserves are increased. The second, first currencies should be internationalized, and the country should have trade deficits. At the moment, the renminbi is only "regionalized" or "Hongkong".

He said that many people in Hongkong are looking forward to appreciation.

Fang Gang said that in the process of RMB internationalization, foreign exchange reserves will inevitably increase. If the US dollar depreciates at the same time, the assets value of foreign exchange reserves will be eroded.

He believes that the current way of RMB internationalization is different from that of other countries in the way of currency internationalization.

In the face of special risks, the government should carry out pilot projects and carry out the internationalization process of RMB in stages.