1. 3 policies for Internationalization of RMB

2.  major player in international trade and finance continuously growing by 9 to 10 percent per annum for the past three decades the second- largest exporter of manufactur ed goods China

3.  relatively shielded from the global financial crisis of 2008 expansion of domestic demand rapid rate of bank credit state-owned banks and non-bank companies of the PRC are comparable with their counterparts in the Western world. Background

4.  Internationalize the RMB to make it as: a medium of exchange unit of accountstore of value Internationalization of RMB For transaction with non-resident

5.  allow RMB as a trade settlement currency between five mainland cities: Shanghai Guangzou Shenzhen Zhuhai Dongguan some other countries in East and Southeast Asia. 1 st policy

6.  build the RMB bond market to develop the RMB business in Hong Kong. issuance of RMB denominated bonds by five state-owned banks in 2007. allow commercial banks to issue yuan- dominated bonds in HK 2 nd policy

7.  the amount of bond issuances in Hong Kong has increased over time 2007 - RMB 10 billion 2008 - RMB 12 billion 2009 - RMB 16 billion

8.  Extend the currency swap facility Argentina Belarus Russia Pakistan 3 rd policy

9.  The China-ASEAN Free Trade  1)increase the two-way trade 2)further use of the RMB for trade settlements.

10.   RMB is not a convertible currency  China controls capital flows  The core of the Chinese financial market is the underdeveloped state-owned banks  Market infrastructure & institutions are not comparable to those in HK and other world- class open financial markets Shortcomings

11.  The End