The AMCM representative was invited to attend the "2013 Internationalization of RMB Global Forum" in Shanghai on 26 May 2013 and make a speech on the relevant theme, which is summarized as follows: In the 12th Five-Year Plan, the Central Government has explicitly set out the strategic plan of "expansion of RMB cross-border use and gradual realisation of RMB capital account convertibility". The Forum focused on the RMB internationalization, which has attracted lots of attention in the Mainland as well as global financial markets. After the eruption of the global financial crisis, the international financial landscape has undergone significant transformation. While the world would welcome China's currency reform towards free convertibility, concerns for destabilising capital flows, against a backdrop of prolonged adoption of quantitative easing policies by advanced countries, have notably heightened. The AMCM representative believes that although relaxation of capital control towards free convertibility and hence the internationalization of the RMB remain the ultimate goals of the currency reform, the process would proceed at a gradual pace, ensuring the stability, safety and soundness of the Chinese financial system. As a Special Administrative Region (SAR) of China, Macao is small in economic size but can contribute to the internationalization of the RMB. In fact, Macao is always an advocate of free market system; there is no exchange control; the financial markets and institutions operate freely; there is free flow of funds into and out of the SAR, which together have formulated its uniqueness and competitive edges. Furthermore, Macao has relied on its special geographical and historical conditions in performing its function as a liaison platform for economic cooperation between China and Portuguese-speaking countries. The 12th Five-Year Plan clearly supports Macao's development into a service platform for economic cooperation between China and Portuguese-speaking countries, whereby the appropriate economic diversification of Macao can be enhanced. As a matter of fact, banks with capital from Mainland China and Portugal have accounted for the lion's share in Macao's banking industry. Some banks of Chinese capital have executed business cooperation agreements with financial institutions in some Portuguese-speaking countries. In view of the existing competitive advantage, the SAR government is leading local financial institutions to make full use of the development opportunity offered by Portuguese-speaking countries, aiming at further business expansion. As such, Mainland China could direct suitable financial institutions and enterprises to invest in Portuguese-speaking countries through Macao as the platform, following the nation's strategic direction of "internationalization". Such a move would have spill-over effect on other economic/trade activities, while the Macao financial system can provide the supporting services. In November 2010, the then Premier of the State Council, Mr. Wen Jiabao, visited Macao for the 3rd Ministerial Conference of the "Forum for Economic Cooperation between China and Portuguese-Speaking Countries". He announced a series of policy measures to promote Macao to be the platform for economic cooperation between China and Portuguese-speaking countries. He hoped that Macao would perform "core function" in promoting RMB trade settlement in the process, which would further embody Macao's position as platform for economic cooperation between China and Portuguese-speaking countries. At the moment, Shanghai is the "onshore" RMB centre while Hong Kong is the leading "offshore" centre. Macao can strengthen its cooperation with Shanghai and Hong Kong, exploring the opportunity arising from the orderly financial reform in the Mainland. To cope with the need of the country, Macao can serve as a platform for regional economic and trade cooperation, through which it can help create an accommodative environment conducive to external trade and overall economic development of the country. Under such positive interaction, we can promote jointly the process of the internationalization of the RMB. For the full text of the speech, please browse the Internet website: http://www.amcm.gov.mo/cms_upload/general/press_release/20130526_Speech_English.pdf
