Reforms for External Opening-Up of the Financial Sector and Their Prioritization

Zhang Bin
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Zhang Bin: Chinese Academy of Social Sciences, Institute of World Economics and Politics

Chapter Chapter 8 in Exploration on China’s Economic System Reform under New Normal of Development, 2026, pp 155-174 from Springer

Abstract: Abstract Currently, the RMB exchange rate formation mechanism reform, the foreign exchange reserve management system reform, the capital account reform and the promotion of RMB internationalization are the key tasks in China’s financial sector external opening-up strategy. This chapter mainly discusses the specific manner and order in which the above reforms should be implemented, with the conclusions as follows: In terms of the reasonable reform order, priority should be given to the RMB exchange rate formation mechanism reform, and a wide-range fluctuating RMB exchange rate formation mechanism is advisable in the near-term future. The foreign exchange reserve management system reform should also be promoted as soon as possible, with a focus on setting up the sovereign pension funds with parts of the foreign exchange reserves, so as to increase the foreign exchange reserves investment income and return the foreign exchange to the people. The RMB internationalization and the further opening-up of capital account should be placed in the latter stage of the reform process. The opening-up of capital account should be promoted in a gradual and pilot manner, and the RMB internationalization should be focused on the construction of market infrastructure.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-95-2461-7_8

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DOI: 10.1007/978-981-95-2461-7_8

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