9月18日，我院副院长朱宁教授做客CCTV News《Dialogue》栏目，就上海自由贸易区话题发表评论。朱宁教授认为，上海自由贸易区是近几年中国改革中最清晰、最重要的创新。
 

Zhu Ning: Yes, I think, clearly, for as far in these years as it has been concerned, I think this will be clearly one of the most or the most important innovations in Chinese reform. There are probably a couple of reasons to look at this way. The first is, I think, there have been a lot of rumors or expectations about what is going to happen with the full convertibility of RMB Yuan and I think the Free Trade Zone which is set up as a free zone is possibly designed to speed up, is not complete or accomplish this reform. The second step, I think, it is probably more fundamental, I think, primarily has to imagine what is wanted. Within the Free Trade Zone, there will be a relaxation of regulation and also a reduction of the impact of government policies, which will be like another big step towards a more and more oriented reform. So, I think, in that regard, this is also setting a very very good step forward for Chinese reform in the next few years.

Zhu Ning: Well, there have been a lot of discussions about the Likonomics in the way it is. In the way there is a reflecting a reform towards a more and more market-oriented economic growth or economic thinking, but on the other hand,….

Zhu Ning: Yes, I think, it eventually this is a passing ground for how would the economy reform if it lacks or if it relaxes regulations on key factory prices such as interest rate and the exchange rate. So, I think yes. This is a very good or very talented reduction point of, I think, where the economic reform is headed in the next few years. But that is just at the one, a quick point, that is, I mean, there is not forget Chinese, Shanghai economic growth in the past couple of years has been lagging almost the entire country. I think, that is also one way to jump start Shanghai economic growth again, just to say, well, given Shanghai economic growth has reached a point which is quite ahead of other parts of China that are still lagging the developed economics that are trying something new which will keep sustaining Chinese economic growth.

Zhu Ning: Yes, I personally have been living in Hongkong for a couple of years. I think there have always been concerns from the Hongkong side about whether Shanghai really eventually becomes a truly international financial center; if that has been achieved, what is going to be the competition to Hongkong. But I think, I mean, there probably two ways that Hongkong certainly is too concerned about this. One is, I think Hongkong has been shouldering the responsibility for bridging the gap between foreign investors and I think the mainland markets. That is under the historical contact of there have been a lot of constraints on both the free trade policies and on the convertibility of RMB Yuan. But, once we have all those been liberalized, I think, there is not that much of difference between where these physical transactions have to take place. The second is, I think, Shanghai, in terms of its knowledge about the rest of the economy, in terms of its economic ties to the rest of the economy, is much closer than Hongkong. So, don’t think it is going to be a head-on competition more of its differentiation or a more preside marketing of each city.

Zhu Ning: Well, I think, that is an interest way in the currency convertibility, but then, there is not forget the fact that after US economy overtook that of the UK, it took another seventeen or so years before the US dollars become the true dominant international currency in the entire world. So there are some differences between the sides of the economy as Kim has mentioned and the quality of the economy and the international influence of the country’s home currency. But there are probably two things that China has to be very careful with what has happened to Japan. One is, why Japan has to try really hard to faster an offshore Yuan market during its economic peak, but they hasn’t really worked out, because it has to rely on the foreign companies and the foreign countries’ receptions of it. The Japanese cannot push it very hard. If it keeps pushing, then, it will be not very effective. The second, which, I think, is probably more important, is how will China deal with its own structure problems. I mean, how will China try to have, I mean, its currency been liberalized, its Yuan been full convertible. I think that will set the real market determined interest rate and currency rate. Without that, I think even it can try really hard to push RMB into overseas markets, most of the investors come in for the setoff arbitrage speculation not for the setoff and try to use more currency, more RMB to do more business within the Zone.

Zhu Ning: It also means very different things for international currency. I mean you can have your currency been for what else except for trade purposes but then it is another big step for your quantitative easing to receive as a reserve currency. 

Zhu Ning: Well, I think there are probably several ways to further reform Chinese financial sector or to set the market oriented interest rate. I think, one is you have to introduce or allow the introduction of more financial institutions. I think we have the small-loan companies, the peer-to-peer lending. And now we are talking about the internet finance. So we have to introduce more players to complement the now currently, the current financial sector which is currently being dominated by the banks. Secondly, you have to have more products. I mean we have just recently introduced the trust futures which is a very good step forward. And then we would like to integrate the appropriate bond market. The bond market would have a good price being set that the people can appropriate the use, appropriate risk from their investing. And the last is you want to create a new market. I think that is what we are hoping for for the Shanghai Free Trade Zone.

Zhu Ning: Well, I think that actually if you look at what have been happening in the past eight years or basically the exchange rate reform has been going on in the past eighty years, and I think we will reach a point. I think both the PBOC and some of the overseas investors are feeling that the RMB exchange rate is reaching its long-term equivalent rate. So, I think, if that is the case, I think you would probably see a wider trading banks or a relaxed trading bank for RMB Yuan to be allowed to trade. So, I think, if that really happens, then the market has already set a big part of the RMB. So, I think it is not too far away from that. I just want to make one distinction. I mean, people think that if you have fully liberalized the exchange rate, then, it means that the PBOC or central bank would not interfere with the exchange rate. I don’t think that is a proper notion, because if you look at the banks of Japan, if you look at the ECB, it is not that. The central bank would not interfere with your exchange rate just like it would not interfere in 99.9% of the time.
Zhu Ning: Exactly
Zhu Ning: Exactly
Zhu Ning: Market mechanism, exactly.

Zhu Ning: So, I mean people are a little too worried about what if there is going to be one harm shock to the system. But, I don’t think….

Zhu Ning: Yeah, I think that is a very good question. I think the AVIC economy definitely has a lot of profound impacts on the entire East-Asian region and on China particularly. I think probably two things. One is, the destressing or the weakening of Yuan is having a profound impact. I think people are thinking that, well the appreciation or depreciation of Yuan is having a direct impact on China. Yes, that is sure. But then there is not forget that Japan also has a lot of free direct investments in China which is certainly being helped by the appreciation or the fluctuations of the Yuan. So, if you look a step further, I mean, I just finish my business in IMF. I think the second impact is actually, shortly, AVIC is leading the impact, the direct impact of Yuan. So, it is not as huge as people have thought. In another sense, I think Chinese try to upgrade its manufacture sector so it can directly compete with Japan’s manufacture. At this moment, there is not that much of competition or direct completion between these two countries’ exports. So, I think it is not as bad as it is thought and then going back to Japan, I think, the biggest issue is, first of all, whether AVIC could successfully reform its taxes and export policies and then whether they shorten shock to the economy can really sustain economic rebound in Japan.

Zhu Ning: Yeah, I think that is exactly the reason why I think the reform in the free trade zone or the liberalization of the financial sector is so important to the next-step reform in China. I think the banks, they manage to earn a huge number of the profits but then there is an expense of the real economy. So I think how we motivate or stimulate the banks to better serve the small and medium enterprises, I think that is one reason why we are having for the free trade zone. In the free trade zone, I think hopefully by setting up the foreign banks or banks which are freely set up so that there is a competition for facilitating a better financing of the real economy.

Zhu Ning: Yes, I think there will be some diversity of the luxury shopping, my opinion.

Shanghai Free Trade Zone