21st Century Business Herald reporter Tang Jing reported in Shanghai

Recently, the "2025 Asset Management Annual Conference" guided by Southern Finance All Media Group, sponsored by 21st Century Business Herald and co-organized by Pudong Bank was grandly held in Pudong, Shanghai. Ding Zhijie, director of the Institute of Finance of the People's Bank of China, was invited to attend and delivered a keynote speech on the theme of "Internationalization of the RMB and the Development of the Asset Management Industry".

Ding Zhijie, director of the Institute of Finance of the People's Bank of China (Photo source: official photo)

Ding Zhijie pointed out that the RMB has now become the third currency with a "currency anchor" effect except the US dollar and the euro. The so-called "monetary anchor" effect refers to the phenomenon that some countries will use a certain currency as an important reference benchmark or "anchor" when formulating exchange rate policies and conducting exchange rate management, which makes the country's currency exchange rate form a certain correlation or linkage with the reference currency exchange rate.

Empirical research shows that the RMB has jointly built countries in the "Belt and Road" and especially in East Asia, showing a certain "monetary anchor" effect, and the local currency exchange rates of some African countries also have a linkage relationship with the RMB exchange rates. Unlike the "monetary anchor" effect of the euro and the US dollar, the "monetary anchor" effect of the RMB has no institutional arrangements, which reflects more the de facto linkage.

Ding Zhijie explained that the "monetary anchor" effect of the US dollar and the euro is more reflected in an institutional arrangement. For example, in addition to the United States using the US dollar, some countries use the US dollar as legal currency, such as Ecuador and Panama. There are also some non-EU member states who regard the euro as legal tender or focus on the euro. For example, the currencies that the Central African Monetary Union and the West African Monetary Union are all focused on are the euro, which are institutional arrangements.

Ding Zhijie said that the "monetary anchor" effect of the RMB is more reflected in its de facto linkage, and the main source of this linkage is China's close economic and trade exchanges with countries around the world. China is currently the main trading partner of more than 140 countries and regions, more than half of which are the largest trading partners, and the vast majority of the remaining ones are the second largest trading partners. This also means that the prospects for cross-border use of the RMB are broad and may become an important pole in the multipolarization trend of the international monetary system.

Ding Zhijie also pointed out that the internationalization of the RMB and the opening of finance are important opportunities for the development of the asset management industry. In the past, China's financial opening was more reflected in pipeline-based opening up, and it advocated "one maturity is open to the other." In the future, in the general direction of RMB internationalization, China's financial opening will emphasize steadily expanding institutional openings such as rules, regulations, management, and standards, which will also provide a more stable market and institutional environment for our cross-border asset management and cross-border asset allocation.

"With the deepening of the internationalization of the RMB, both the overseas asset allocation of Chinese financial institutions, enterprises and individuals, and the demand for the allocation of RMB assets in China by foreign investors will increase significantly. This is an self-evident opportunity." Ding Zhijie pointed out that the amount of domestic RMB stocks, bonds, loans and deposits held by overseas entities is about 10 trillion yuan, and there is still a lot of room for growth. The proportion of foreign investors in my country's capital market is about 3%, and the proportion of developed countries is generally more than 10%. From this perspective, the internationalization of the RMB will bring new opportunities to my country's asset management industry.

"However, there are challenges behind the opportunities," Ding Zhijie admitted that the entry of overseas institutions will continue to intensify competition in the asset management industry. For example, the European asset management industry has achieved rapid development in the past decade, but the number of European asset management institutions has been declining, mainly due to competition from US asset management institutions. Against this background, it is even more important for asset management institutions to consolidate their own capabilities.

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