Event reports
The first panel analysed the rise of the RMB and the future of the international financial system. First Prof. Dr. Xu Yonglin, director of the School of Finance at the Shanghai Institute of Foreign Trade (SIFT), illustrated the previous process and future steps of the RMB internationalisation. Through the expansion of international trade and direct investment in RMB, important steps towards liberalisation of the currency have already been taken. In the following years a stronger market orientation of the key interest rates and an increased competitive orientation of Chinese banks are necessary further developments.
Brian Ju, assistant vice president of Deutsche Bank in Shanghai, emphasised the main advantages of an internationalisation of the RMB for the People’s Republic. Through trading in RMB, the exchange rate risks of Chinese companies are eliminated, the dependence on the US dollar and the American financial policy are reduced and Chinese banks are forced to raise their efficiency. He highlighted that China's influence on the international financial system will increase, but that it will take quite a long time until the RMB will be used as a reserve currency to a large extent. Moreover the internationalisation of the RMB is also a fundamental requirement to reach the goal of the Chinese government of establishing Shanghai as an international financial centre by 2020, which was pointed out by Sheng Yichao, a master student at SIFT, in her presentation.
During the second panel the effects of the internationalisation of the RMB on the world economy and the perspectives for the future economic development in China and Germany were discussed. Prof. Dr. Xu Mingqi, deputy director of the Institute of World Economy at the Shanghai Academy of Social Sciences, explained how the RMB liberalisation intensified the trading relationships to countries, with which China already has agreements on direct currency settlement.
The KAS scholarship holder Niklas Veltkamp talked about Germany’s competitiveness in a changing world economy. He highlighted that mostly the small and medium sized enterprises (SME) guarantee the competiveness of the county. Further advantages of Germany are the solid infrastructure, the efficient labour market and the effective rule of law. Challenges can be seen in the rising energy costs and the demographic change, as it may lead to labour shortages. Xiao Qingfen, student at SIFT, stated that China can only stay competitive through increasing innovations. In the context of rapidly increasing wages the added value in China has to be raised significantly. To be able to reach these goals, not only investments in education and research have to be extended, intellectual property rights also need more protection.
The third panel discussed the global responsibility of China and Germany. Prof. Dr. Zhang Haibing, director of the Institute of World Economy at the Shanghai Institute of International Studies, illustrated the major principles of China’s development cooperation. She pointed out that Chinese projects are usually implemented fast and cheaply and meet the requirements of the recipient countries.The KAS scholarship holder Kristina Kellner then talked about Germany’s contribution to the establishment of fair development opportunities worldwide. The German development cooperation concentrates mostly on capacity building and currently focuses on education, health, good governance, rural development and sustainability.
In the following discussion it was critically mentioned that China needs to focus more on using local resources and labour when investing in developing countries, in order to make better use of the potential of the Chinese engagement. Furthermore it is desirable that the People’s Republic increases her involvement in tri- and multilateral developing project, as Chinese approaches (focusing on infrastructure) and western approaches (capacity building) are often complementary.