Second, China's sustained economic development has gradually become a world economic power, providing a more solid material foundation for RMB internationalization. Since 1990s, China's economy has made great progress. According to relevant data, from 1990 to 1998, the average annual growth rate of China's GDP was 9.8%, while that of the United States, Japan and Germany were 2.5%, 1.5% and 2.4% respectively. Among them, from 1996 to 2002, the average annual GDP growth rate of China was 8.3%. In the same period, the import and export of commodities increased substantially and maintained a surplus. The accumulated surplus reached145 billion US dollars, and the foreign exchange reserves increased rapidly, ranking second in the world. As far as trade is concerned, the total import and export volume of China in 2002 was US$ 4 143 billion, up by 3 1.5% over the previous year, of which exports were US$ 249.2 billion, up by 27.8% over the previous year, and imports were US$ 225 1 billion, up by 35.8% over the previous year, with a surplus of 24/kloc-. In terms of capital transactions, the utilization of foreign capital improved in 2002, and 22,347 foreign-invested projects were newly approved, an increase of 32. 1% over the previous year. The national contracted investment was US$ 62.4 billion, up by 5 1.3%, and the actually utilized foreign capital was US$ 40.7 billion, up by 35%. In addition, the business scope of overseas enterprises in China is constantly expanding, involving foreign trade, real estate investment, information consultation, finance and insurance, etc. The management of enterprises has gradually diversified from a single trade. At present, China's overseas enterprises are all over five continents1more than 20 countries and regions, with total overseas assets reaching 2 trillion yuan. With such a fast-growing economic base, especially the foreign trade and balance of payments surplus for many years, the RMB has long been in a hard currency position. According to the current situation, it is predicted that China's economy will maintain the momentum of rapid growth in the next 10 year, which will make RMB a currency that can reassure all countries, greatly enhance the international reputation of RMB, and thus lay a solid foundation for the internationalization of RMB.
Third, the RMB has been freely convertible under economic projects, which has taken an important step towards internationalization. With the implementation of the Regulations on Foreign Exchange Control in People's Republic of China (PRC), the foreign exchange restrictions on non-trade and non-recurrent trade under current account have been abolished; Later, the State Administration of Foreign Exchange issued the Measures for the Administration of Personal Use of Foreign Exchange by Domestic Residents, which abolished the restrictions on personal use of foreign exchange and expanded the scope of foreign exchange supply. The central bank promulgated the "Regulations on the Administration of Settlement, Sale and Payment of Foreign Exchange", which brought foreign-invested enterprises into the bank settlement and sale system and removed the obstacle of full convertibility of RMB current account; Dai Xianglong, the former governor of the central bank, sent a letter to the IMF to announce that China formally accepted the requirements of the second, third and fourth paragraphs of Article 8 of the IMF Agreement, thus marking that China has achieved full convertibility of current account, which is another milestone in the process of China's historic transformation and decisive integration into the world market. Realizing convertibility under the current account will further enhance the confidence of the international community in the bright future of China's reform and opening up.
Fourthly, China's financial system is improving day by day and its financial market is gradually maturing, which provides reliable hardware guarantee for RMB internationalization. In order to meet the needs of reform and opening up and form a financial system with policy banks, state-owned commercial banks and joint-stock commercial banks as the main bodies under the leadership of the People's Bank of China, the state has successively promulgated and implemented the People's Bank of China Law, the Commercial Bank Law and other financial laws and regulations, providing reliable legal norms and guarantees for the operation of financial institutions. The national foreign exchange management system has gradually changed from direct management to indirect management, and the current account settlement and sale of foreign exchange system has been implemented. The inter-bank foreign exchange market was established, the current account RMB was convertible, and the exchange rate was consolidated. The RMB exchange rate has entered a single and managed floating exchange rate system based on market supply and demand, and the market competition mechanism has been introduced into foreign exchange management, gradually realizing the transformation from exclusive foreign exchange management by China banks to equal participation by most banks. The formal networking of China Foreign Exchange Trading Center indicates that China's foreign exchange market has entered a new era of unified supervision and steady development. Subsequently, the spot transactions of RMB against major foreign currencies such as US dollar, Japanese yen and Hong Kong dollar started one after another, and the establishment of a unified national financial market was announced. The central bank carried out open market operations and launched RMB forward foreign exchange transactions in due course. The above measures show that China's financial system and financial market are developing in a direction conducive to the free convertibility and internationalization of RMB.
Although the time is ripe for RMB internationalization, some obstacles cannot be ignored, such as the realization of RMB capital account convertibility, the immaturity of financial market, the strategic realization of China's sustainable economic development, and the imperfection of financial management system.