Chinese government officials offered assurances on currency convertibility and easier access to its financial markets while simultaneously warning the US government about following through on threats to erect trade barriers.
China is prioritising full convertibility of its currency and plans to ease restrictions on foreign investors in its onshore capital markets, People's Bank of China Deputy Governor Yi Gang said in New York, adding that these initiatives follow success in efforts to stem capital outflows and reduce overleveraging in the domestic corporate sector.
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"We have to work on removing existing barriers for the internationalisation of the renminbi so that we can make the renminbi a freely useable currency," Yi said at a conference at Bloomberg LP's New York headquarters. Renminbi exchange rate reform will be a "market-driven" process based on the needs Chinese companies and households.
Responding to feedback from foreign financial institutions, the PBOC intends to allow "better service for offshore renminbi transactions" including easier payment infrastructure and issuance of more licenses for foreign institutions to underwrite and settle renminbi-denominated bonds, also known as "Panda bonds", Yi said.
China will also cut red tape and provide more regulatory and tax treatment transparency for foreigners wanting to participate in domestic fixed-income and equity markets.
Meanwhile, China's Ambassador to the US, Cui Tiankai, who spoke at the same conference, warned against the imposition of trade barriers, particularly as Beijing and Washington recently committed to 100 days of talks aimed at finding a way to balance trade flows. The US's 2016 trade deficit with China was US$347 billion, according to US government data.
Last week, Trump announced measures to better enforce "Buy America" legislation, by reducing waivers and closing loopholes that contractors use to source foreign products for US government projects.
US Commerce Secretary Wilbur Ross cited Chinese steel imports, specifically, as potentially undercutting the ability of domestic producers to meet increasing demand from US military equipment manufacturers.
"There's much talk about trade imbalances and calls for fair trade. Trade's benefit for both countries is a matter of fact; fairness is sometimes a matter of perception," Cui said.
"Whether this balance will be achieved by increasing trade flows or by raising trade barriers is a matter of choice," Cui said, adding that the US could help resolve the imbalance by dropping restrictions on exports of some energy and high-tech products to China.
China's imports rose 31 per cent on year in the first quarter of 2017.