The development strategy of the internationalization of China's financial market?

Since the reform and opening up, China's economy has been developing rapidly, and going global is the general trend. Finance as a product of the commodity economy, at the same time as a basic means of managing the commodity economy, is bound to go global with the Chinese economy is gradually going global.

I. Connotation of financial internationalization

The so-called financial internationalization refers to the financial activities beyond the national boundaries, from the local and regional development of traditional business activities to global innovative business activities. Its specific content includes: the internationalization of financial institutions, the internationalization of financial markets, the internationalization of financial business, the internationalization of financial assets and income.

1. The internationalization of financial institutions means that the financial industry of a country establishes branches abroad, carries out financial business, and forms a network of financial institutions with sensitive information, appropriate scale and reasonable structure. Under the condition of reciprocity, foreign financial institutions are allowed to enter the country and open up its financial market.

2. The internationalization of the financial market means that the domestic financial market is linked to the international financial market, so that the domestic financial market becomes an integral part of the international financial market, so that the domestic capital is optimally allocated in a broader market, while absorbing and utilizing the foreign capital, and participating in the international capital cycle.

3. The internationalization of financial services refers to the further extension and development of domestic financial services to the outside, from the traditional regional business, such as deposits, lending, investment, but the scale, nature and object has been a significant difference.

4. The internationalization of financial assets and earnings refers to a country's financial industry in overseas assets and earnings, accounting for the proportion of its overall assets and earnings to reach a certain scale, become an important part of a country's financial industry, and have some of the characteristics of the international financial industry.

Two, China's financial internationalization process

Financial internationalization is the development of China's socialist market economy needs China to achieve with the world market economy is the only way to realize the reform and opening up the policy, the implementation of international business. The rapid development of international trade and production internationalization inevitably requires financial institutions to provide export financing, loans to set up branches overseas to provide appropriate services. The increasing number of three-funded enterprises, foreign exchange business also requires the domestic financial business and the international financial market as a whole, and therefore requires the acceleration of the process of financial internationalization, so that both the operation of the RMB business, and foreign exchange business, both domestic business, and international business in accordance with international practice, expanding foreign contacts and exchanges, and actively participate in the international market.

China from the end of the 1970s, the government-led top-down economic and financial system reform. This reform, through the administrative force, quickly by way of financial legislation and regulations, to establish a central bank as the main body, local banks, foreign banks and other non-bank financial institutions as a subsidiary of a variety of financial institutions co-existing and division of labor and coordination of the socialist financial system, which has become the basis for the internationalization of finance.

1. The process of internationalization of financial institutions

1) China has successively joined some international financial organizations, such as the International Monetary Fund, the World Bank Group and the Asian Development Bank. The World Bank gave China a loan of 320 million U.S. dollars in 1993, and in 1995 provided a loan of 400 million U.S. dollars to China for the implementation of the seventh railroad program. The Asian Development Bank's investment projects in China have amounted to 39, totaling US$4 billion. China's Agricultural Bank participated in the Asia-Pacific Agricultural Credit Society and the International Federation of Agricultural Credit to strengthen international ties in agricultural credit business. State time China and foreign central banks, commercial banks and other financial organizations in the strengthening of ties with many foreign banks to establish an agency relationship in order to better carry out international business, for the internationalization of the economy.

2) China's financial institutions have set up a number of branches overseas. Only the Bank of China in more than 10 countries and regions overseas to establish more than 400 institutions, in February 1992, the British "Banker" announced for the first time in the world's largest multinational banks in the Bank of China ranked No. 8, the end of 1993, its announcement of the world's 1,000 largest bank rankings, the Chinese mainland, six banks on the list: ICBC 13th, 19th Bank of China, 39th CCB, 49th Agricultural Bank of China, 145th Bank of Communications, Investment Bank 527. In addition, six banks under the Hong Kong and Shanghai Banking Corporation Group (HKBCG), in which Chinese capital holds the majority of shares, are also on the list.

3) Foreign-funded and joint venture financial institutions in China occupy a certain proportion. According to statistics, there are nearly 30 countries and regions of the 120 foreign banks in China's 15 cities opened more than 40 branches and 225 permanent representative offices. 1992 Shanghai BNP Paribas International Bank was officially established in the fall. These foreign financial institutions overall strength, international business volume, high quality personnel, flexible business strategy, high level of modernization, and the application of world-class science and technology and communication facilities, not only the formation of China's financial institutions, certain competitive pressure, but also to make China's financial institutions better, closer to learn advanced financial management and action methods, conducive to the development of China's financial industry to the internationalization of the development.

2. The internationalization of the financial market

The so-called financial market refers to the place or field of financial assets trading activities. The market is always the most concentrated place of economic and financial activities, and the last place to reflect all the performance, any economic entities and individuals can not be separated from the market for a moment.

China's financial market in the true sense of the word is gradually formed after the reform of the economic system, to now only more than ten years, inevitably informal, the form is inevitably childish, so to further mature and improve the domestic financial market on the basis of the realization of convergence with the international market, because the international financial market contains a huge potential for capital, with advanced financial instruments, with a perfect management system, its Customer resources and economic background can create better opportunities for our country and provide fairer conditions. Of course, blindly enter the international market, the use of irrational strategies will suffer losses, so we first understand the international market situation, followed by learning to use international financial instruments, and again to create the conditions for a good image of themselves in the international market.

1) The process of RMB internationalization

From the trend of world economic development, a number of international trade and international financial centers will emerge in the Pacific Rim, and our country also hopes to have such financial centers to join the international competition, so it is necessary to accelerate the process of RMB internationalization. The conditions needed for the internationalization of the RMB are: the free convertibility of the RMB, the continuous growth of economic strength, effective control of inflation and the balance of payments current account remains good.

The free convertibility of the RMB is centered on the exchange rate issue. In this regard, China has taken a key step forward, that is, since January 1, 1994, the implementation of the exchange rate convergence, the establishment of a single managed floating exchange rate system based on market supply and demand.

This initiative is conducive to domestic commodity prices close to international market prices, is conducive to the role of the exchange rate to regulate exports, and to cope with the complexity and volatility of the world economic changes; is conducive to cost accounting, business management, so that there is a more unified standard accounting system; to put an end to the foreign exchange black-market transactions, the foreign exchange market is pure, and conducive to the domestic economic cycle and the international economic cycle of the coincidence; is conducive to the China The company's participation in the World Trade Organization (WTO) and in a wide range of international economic exchanges.

The growing economic strength and favorable balance of payments situation.

China's 20 years of reform and opening up has been a period of rapid development, with an economic growth rate of about 10 percent per year, and a growing overall economic strength. The country when the effective control of inflation, the balance of payments was a surplus trend, in 1994, China's exports amounted to 121 billion U.S. dollars, imports of 115.7 billion U.S. dollars, at the same time, foreign exchange reserves of 51.6 billion U.S. dollars, is moving towards the ranks of the economic powers, which all contribute to the internationalization of the yuan.

2) The internationalization of China's securities market

Many of China's financial institutions have successfully issued bonds in the international bond market many times. Large sums of construction funds have been raised to support the country's economic construction.

European market

China International Trust and Investment Corporation European Yen Bond 1988.1 15 billion yen

Shanghai Municipal Investment Trust Company European Yen Bond 1988.6 15 billion yen

Asian market

Chinese International Trust and Investment Corporation European Dollar Bond 1993.3 Singapore 150 million dollars<

Japanese Yen Private Placement Bonds 1985.10 Japan 10 billion yen

Japanese Yen Public Placement Bonds 1991.10 Japan 15 billion yen

Bank of China Japanese Yen Public Placement Bonds 1984.11 20 billion yen

1985.4 20 billion yen

1985.10 30 billion yen

1986.4 70 billion yen

1989.4 20 billion yen

Tokyo Dollar Bonds 1985.10 150 million U.S. dollars

Shanghai Municipal Investment Trust Company JPY Public Bonds 1986.2 25 billion yen

Guangdong International Trust and Investment Company JPY Public Bonds 1986.9 20 billion yen

In 1991, China issued RMB-denominated, foreign exchange-traded RMB-selected stocks (B-shares) with a nominal value of about RMB 380 million to foreign investors, absorbing foreign exchange of US$240 million through the premium issue. By February 1993, the total capitalization of the 10 listed companies in Shanghai was US$650 million. 1992.10 China Brilliance Automobile Holdings Inc. was listed on the New York Stock Exchange in the U.S.A. Brilliance shares valued at US$800 billion were oversubscribed by as much as 12 times, and the price of the shares doubled during the period of October-December. 1992.11 China International Travel Service (CITS) issued shares on the Hong Kong Stock Exchange issued shares to raise HK$400 million. 1993.7 Tsingtao Brewery Co., Ltd. successfully listed in Hong Kong, which is the first time that a Chinese state-owned enterprise is listed in Hong Kong, followed by Shougang stock listed on the New York Stock Exchange, a success, China's securities market is in line with the world.

3) China's gradual orientation to the world's insurance industry

New China's insurance market since its formation has not been interrupted with the world's insurance market, even in the 1950s to 1970s, the People's Insurance Company of China was canceled, but still as the People's Bank of China has been a division of the import and export business for China's services.

Today, the insurance market is facing a new task of going global while continuously developing and maturing. As we all know, externally China has successfully entered the WTO, and internally it has established the goal of establishing a socialist market economy, the end result of the two is that China has stepped into the world's economic sequence. China's goal is to obtain an economic status that matches that of a political power and is getting closer and closer to its goal. As the pace of economic development accelerates, the insurance industry will play a greater role. When the normal operation of the national economy is interrupted by unpredictable and unexpected factors, the insurance industry plays a pivotal role in economic compensation, restoring the order of production and life as soon as possible, and ensuring the sustained and stable development of the economy. Therefore, how to cooperate with the internationalization process of China's economy, to ensure the smooth integration of the national economy with the world economy, and at the same time to complete their own goal of going global has become the new task of China's insurance industry.

China's insurance industry to enter the world insurance market has become the development direction of China's insurance industry. The People's Insurance Company of China has participated in many world insurance organizations on behalf of China, and has established business relations with more than 1,000 insurance companies and reinsurance companies in more than 100 countries and regions. Through reinsurance dealings, not only has China been actively involved in international insurance activities, but also the underwriting capacity of PICC has been expanded. For example: a few years ago, the Australian star launch emergency off the car, the star and arrow without damage, but the launch failure of the People's Insurance Company of China paid more than 6 million U.S. dollars in compensation, due to the foreign reinsurance, sharing compensation, reduce their own responsibility. Such as Daya Bay nuclear power plant such as the total insured amount of 2 billion U.S. dollars of the project, it must be the international market to diversify the risk. Therefore, the development of China's insurance industry is not only a question of self-improvement, but also to coincide with the development trend of the world insurance market.

Three, China's financial internationalization problems

1, the macro policy is not good, the comprehensive environment is not coordinated

Policy and environment are the two cornerstones of financial internationalization. At present, China's foreign financial policy is generally loosened, but there is still a long way to go from the standard of internationalization. There are heavy constraints on the exchange of internationalized financial institutions, tools and talents, and the separate and cooperative development of projects. At the same time, the comprehensive environmental factors such as economy, culture, geographic location, transportation conditions, infrastructure, etc. also seriously affect the development of China's financial internationalization. In the face of the formation and rapid development of the modern world information network, China's banking industry in the office automation, computerization made some investment in the timely understanding of international financial information, processing business plays a positive role, but with the international big banks than the gap is very far, obsolete and outdated facilities are difficult to fight with the equipment of the advanced foreign-funded banks, and also varying degrees of restriction on the development of the domestic business, to open the international financial market. The negative impact on the opening of the international financial market.

2, the constraints of the financial system

Many of the shortcomings of China's financial system is not only due to macroeconomic policy mistakes, but also due to the lack of intrinsic binding force of the system itself. The economic base is irrationally constructed. The traditional command-based economic system fundamentally negates the market economy, leading to irrational allocation of resources, poor economic performance, low efficiency, and finance in a shallow state. China's financial reform is lagging behind enterprise reform, and the process of its own entrepreneurialization is also slow, with an unsound internal constraint mechanism. China's current financial industry is in a "quasi" entrepreneurial state, banks lack independent property rights, power is overly concentrated in higher-level banks, and social credit activities are run in deviation from the law of value. After the initial reform, the incentive mechanism has been awakened, but the corresponding restraining mechanism has not been established. Only under the premise of the separation of government and enterprise, to achieve the unity of power, responsibility and profitability, in order to revitalize the financial institutions, to the world.

3, the number of foreign institutions is small, the scale of foreign assets and liabilities is small, the level of internationalization is low, affecting the internationalization of China's financial industry.

Currently, only the Bank of China has a higher degree of internationalization, has a wider range of branches and service outlets overseas, while other banks have fewer branches overseas, the allocation of foreign exchange funds, the collection of information on the international financial market, the borrowing and lending of funds are adversely affected. This affects the efficiency of the use of foreign exchange funds, restricting China's multinational financial services to the depth of the direction of development is also difficult to make China's multinational banks among the ranks of the world's multinational banks. China's joint venture, foreign-funded financial institutions, although there is a certain degree of development, but the proportion is too small, the pace of development is far less than the three-funded enterprises, nearly 60,000 three-funded enterprises, although it brings a huge amount of foreign capital accumulation, but put into operation after the main supporter is still the domestic banks, China is gradually liberalizing the RMB business of foreign-funded banks, foreign-funded banks are from the risk of a small, large returns on international settlements, such as intermediate and foreign exchange business to go out with the domestic banks to compete in all aspects, China's multinational banks to compete. Banks to carry out a full range of competition, China's NOKIA company early repayment of huge loans from the Bank of China, switch to foreign bank loans, which should give domestic banks a warning.

4, closed for a long time China's financial industry is not familiar with or not accustomed to the international common practice, do not adapt to the requirements of the trend of world economic development.

Many of China's practices are inconsistent with international practice. Financial supervision, mainly by administrative order, the legal system is not sound; the international common mortgage, the domestic issuance of loans mainly rely on credit guarantee, and even administrative orders issued; loan interest rates do not reflect the actual situation of supply and demand for funds, the enterprise demand for loans also has no interest rate elasticity. Under such circumstances, Chinese banks entering overseas will face extremely severe international financial forms and may be subject to discriminatory treatment. China has not fully adopted international standards in the supervision, auditing, accounting, statistics and clearing system of financial institutions, so the domestic and foreign financial industries cannot compete at the same level and on the same basis, nor can they be measured by the same standards, which is also a major obstacle in the internationalization process.

In addition, the issue of talent is a major constraint on business development. It is manifested in insufficient quantity and low quality, and not many people really know international finance and modern investment. At the same time in the use of talent, the lack of a set of reasonable and effective talent competition mechanism. China to achieve financial internationalization, must solve these problems.

Four, on China's financial internationalization of a few suggestions

1, deepen the domestic reform, according to international practice to transform the financial industry, the establishment of an open financial system, improve the central bank macro-control system.

The central bank should strengthen the construction of laws and regulations: for example, the Banking Law, the Central Bank Law, the Securities Law, the Leasing Law, the Credit Guarantee Law, the Debt Settlement Law, the Settlement Law, the Bills Law, the Foreign Exchange Management Law, and the Companies Law, etc., which shall be in line with the international standards and the objective laws and regulations and international regulations.

Specialized banks develop in the direction of commercial banks, strengthen the construction of the management system of specialized banks, and establish a mechanism of independent operation, independent accounting, self-financing, self-restraint, and fair competition centered on the improvement of economic efficiency.

2. Gradually establish its own network of overseas financial activities, expand openness to the outside world, and actively create conditions to push Chinese financial institutions into the international market.

The 'sending out' of financial institutions is a political, risky, complex and wide-ranging endeavor. We can not blindly set up, hasty start, should be based on the existing institutions network, the establishment of the necessary institutions, focusing on the expansion of its functions, and improve its ability to compete in the international market. There are three ways to set up overseas branches: multinational banks, multinational banking groups and multinational group banks.

3, actively and steadily expanding the introduction of foreign banks, the establishment of Sino-foreign joint venture financial institutions

The entry of foreign-funded banks, some people are worried that it will be squeezed out of the national banks, and not allowed to operate in the local currency business, do not operate in the local currency business can not be regarded as a real entry. Hong Kong's foreign-funded banks account for 76% of the total, instead of crowding out the local banks, but to push the local banks to a new height, creating a wide range of international contacts, many sources of funds, well-informed Hong Kong's banking industry. Of course, China should also exercise the sovereignty of the host country, the implementation of the 'appropriate protection, reciprocity, national treatment, for my use' principle, with reference to the Basel agreement, the relevant provisions of the WTO, in conjunction with the specific circumstances of the country, according to the law and scientific management, to promote equal competition among Chinese, foreign and joint venture financial institutions.

4, strengthen the link with Hong Kong's financial market, to cultivate the country's financial center

Development of financial institutions, the development of international financial business, is bound to establish a close link with the international financial market, the development of an externally oriented country, in order to actively and effectively participate in the international financial market, open up the country's market, and to cultivate the country's financial center is very necessary.

Financial prosperity of Hong Kong is undoubtedly our country's number one financial center, our country to use its role as a window to attract more overseas funds. At the same time in Shanghai, Guangzhou, Dalian and other developed cities to cultivate one or two international financial center for China's economic construction services.

5, strengthen the cultivation of talents proficient in international financial business, training and creating a complex, expert financial team.

Financial international practice, the law is very strict, the relevant professionals is extremely important. China's lack of talent in this area has become a constraint on the internationalization of China's financial, as soon as possible to study a set of talents with the international market to adapt to the training program has been China's financial internationalization of the imminent problem.

V. Conclusion

Financial internationalization is an excellent form of utilization of foreign capital in China. Improving the international competitiveness of enterprises and the development of the financial industry itself are inseparable from financial internationalization. Financial internationalization is an important part of the internationalization of China's economy, to implement the economic take-off, the road of financial internationalization must go on.