Market freedom for export earnings to be deposited abroad

Wen/Liu Xiaozhong Recently, the State administration of foreign policy decided since October 1, 2010, in Beijing and Guangdong Rusu four to select not more than 10 pilot enterprises, to carry out export revenue to store foreign policies pilot.　　This is another policy breakthrough in China's reform of the exchange-sale system since the transfer of the central bank and the foreign-exchange authority from forced-sale to a willingness to sell the exchange. The current accumulation of foreign exchange reserves makes the central bank passively put on a large amount of basic money, not only strengthen the pressure on the renminbi appreciation, but also reduce the independence of the central bank's monetary policy.　　Due to the cramped of private sector investment channels and the low interest rate of deposit and loan control, the huge amount of excess currency liquidity cannot be effectively allocated, thus forming huge financial repression, and finally, the large amount of liquidity cruising in the housing market, stock markets and so on, pushing up domestic asset price bubbles and inflation risks. To allow some export income to be deposited abroad is helpful to relieve the pressure of passive launch of base currency, to create certain conditions for RMB exchange reform, and to some extent, to improve the dependence of monetary policy of central Bank. At the same time, it is also helpful to improve the efficiency of the funds of the enterprises with frequent cross-border trade, and reduce the cost of cross-border exchange of frequent foreign exchange payments. However, regulatory authorities have provided policy legitimacy for the retention of part of their export earnings overseas, and have not been able to provide market rationality for pilot enterprises.　　To improve the effectiveness of the pilot and encourage enterprises to retain some of their export earnings overseas, it is also necessary to introduce supporting policies to improve the market freedom of retained export earnings of the pilot enterprises. First, the appreciation of the renminbi is expected to be an important factor in keeping some export earnings from being retained overseas. At present, the flexible range of RMB exchange rate is limited and the trend is upward, which virtually provides the trade department with the risk controllable foreign exchange arbitrage space, which makes it unwilling to hold excess foreign exchange.　　As a result, policies such as the introduction of export earnings to retain overseas pilots, the need for more flexible exchange rate policy follow-up, only the RMB exchange rate flexibility and frequent exchange costs to the trade sector risk costs, and the appreciation of the renminbi to gain a certain balance, the trade sector will reduce the expectation of the renminbi appreciation of the return on the pursuit of income. Secondly, the availability and market viability of the pilot policy will be directly affected by the market space for the investment and financing of some foreign export earnings. At present, offshore RMB offshore market has not yet become a system, the pricing mechanism of its risky assets is also due to the management of the implementation of strict renminbi Cross-border circulation pipeline Licensing, there is a domestic shadow pricing problem. This means that the offshore RMB offshore market is confronted with the contradiction between the complete marketization of transaction and the imperfect marketization of risk asset pricing.　　Therefore, to encourage the trade department to retain part of export income abroad, not only the offshore renminbi market construction, but also the convertibility of RMB capital items and control of the further relaxation, but also need to reform the interest rate marketization of the effective follow-up. Again, the effective promotion of the pilot also needs to change the current license-type trade control. It is not possible for an enterprise with export income to be deposited abroad to retain its export earnings abroad at all times. Some may have foreign remittance demand but no funds available, while others have foreign currency retained abroadBut may not use the remittance demand, balances this overseas export income the effective supply and demand, besides provides the overseas to deposit the export income the investment and financing channel, more importantly still should moderate reform current trade permit system, namely gradually cancels in the iron ore, the energy and so on raw Material field import license system, Allow more trade sectors to import domestic resources according to internal and foreign demand.