Zhou Xiaochuan, former governor of the People’s Bank of China, said that the process of bailing out economic entities, accelerating recovery and overcoming the epidemic will inevitably entail a certain cost. He believes that the most obvious cost may be inflation, but not necessarily inflation in the traditional sense.
He points out that the spillover of global macro policy is now becoming more obvious, so the impact of global expansionary macro policy is bound to have a transmission, and its channels and forms of influence need to be further studied. Macro policy, no matter how it is formulated, must have a degree of control, that is, it is hoped that it achieves the maximum advantages and functions, while minimizing side effects.
Regarding the view of digital RMB, Zhou Xiaochuan believes that it is not a form of development that relies mainly on digitalization, and that the cross-border use of digital RMB depends mainly on the share of RMB. He believes that digital RMB is still mainly serving small amounts in cross-border. As for some voices saying that digital RMB will cause much impact or damage to the global financial system, he said that “it is not that serious”. He also said that as the share of RMB gradually increases, the digital RMB will naturally increase. This is not mainly dependent on digital development, but mainly on the yuan. This is a gradual process, which is determined by the market participants themselves, not unilaterally, so the credibility of the RMB should be gradually improved, including the infrastructure of cross-border payments.
Talking about how to better solve the debt problem of Belt and Road developing countries, he said that it is not easy to mention “zero wipe” and debt elimination, which will easily cause moral hazard and at the same time cause the rating of these countries to drop, which will affect new financing.
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