Budapest to play key role in renminbi internationalisation
Participants at the seventh Budapest Renminbi Initiative Conference discussed the responsibility of central banks in addressing the challenges of our time, such as the green transition and maintaining the stability of the financial system.
Budapest to play key role in renminbi internationalisation
The Economics of Geography

Budapest to play key role in renminbi internationalisation

Photo: Róbert Hegedüs
Levente Horváth 06/05/2023 06:00

The Central and Eastern European region, and Budapest in particular, is playing an increasingly important role in the internationalisation of the renminbi. Participants at the seventh Budapest Renminbi Initiative Conference discussed the responsibility of central banks in addressing the challenges of our time, such as the green transition and maintaining the stability of the financial system.

Magyar Nemzeti Bank (MNB), Hungary's central bank hosted the seventh Budapest Renminbi Initiative Conference on "Financial Interconnectivity and the Green Transition" on 4 May. Launched in 2015, the initiative further strengthens cooperation between the Chinese and Hungarian central banks, as well as Sino-Hungarian economic diplomacy relations. It aims to help promote the internationalisation of the renminbi, enhance Budapest's role in economic cooperation between China and the Central and Eastern European region, and expand the sources of investment and financing in Hungary.
Mihály Patai (Photo: Róbert Hegedüs)
Speaking at the opening ceremony, Mihály Patai, Deputy Governor of the MNB, recalled that the Chinese economy recovered quickly after the coronavirus outbreak and the People's Bank of China (PBoC) has contributed to maintaining financial stability through a number of instruments. He said that China was one of the first countries to recognise the importance of green finance and the PBoC is at the forefront of the development of central bank digital currency (CBDC). Mihály Patai stressed that the Magyar Nemzeti Bank also prioritises digitalisation, financial innovation and sustainability, and is similarly committed to the internationalisation of the renminbi.
Yang Chao (Photo: Róbert Hegedüs)
In his welcome speech, Yang Chao, Chargé d'Affaires of the Embassy of the People's Republic of China in Budapest, highlighted the role of the MNB in the development of financial cooperation between the two countries. He recalled that "the world today is facing profound changes unseen in a century", and "great changes bring about reforms, and breed a new order". The acceleration of multipolarisation and the internationalisation of the renminbi, Yang Chao said, offered the countries of the world stability and a reliable new alternative to the US dollar. Although there is a need for unity in times of difficulty, "a certain country abuses its currency hegemony to make the world pay for its domestic economic problems, even uses the currency and currency payment system as weapons to impose unilateral sanctions", with serious economic consequences, especially in developing countries. The diplomat said China is interested in strengthening connectivity, and the Belt and Road Initiative (BRI), which is ten years old this year, is a tool for this.
Xu Chen (Photo: Róbert Hegedüs)
Xu Chen, Chairman of Bank of China (Europe) S.A. echoed similar sentiments, pointing out that those who advocate decoupling the Chinese and EU economies cannot hinder China's development, but are depriving Europe of valuable opportunities. He warned that using the dollar as a foreign policy weapon undermines confidence in the global financial system. Xu Chen recalled that the dangers of this practice were recently highlighted by US Secretary of the Treasury Janet Yellen.
Zhang Jun (Photo: Róbert Hegedüs)

The centre of gravity of the world economy is clearly shifting eastwards, and China's economic weight is also becoming increasingly important, said Zhang Jun, Dean of School of Economics at Fudan University, in his speech. In this context, he highlighted the cooperation with the Central and Eastern European region, the ASEAN countries, and the role of the BRI.

In the first panel discussion, the regional financial role of Budapest, the issues of renminbi financing, and the activities of Chinese banks in the country were discussed by Chen Zhanqing (China Construction Bank), Fang Ruixue (China Development Bank) and Zhao Xiaowei (Industrial and Commercial Bank of China). Li Kexin, CEO of the Bank of China's Hungarian subsidiary, was the panel's keynote speaker, discussing the favourable investment climate in Hungary and the impact of infrastructure investment in the region in the context of the internationalisation of the renminbi.

The role of central banks in a sustainable green transition was discussed by the second panel, featuring Zhang Bei, Deputy Director-General of the Research Bureau of the People’s Bank of China, Alain Naef, Research Economist at Banque de France, and Wing Thye Woo, Distinguished Professor of Economics at the University of California.


The author is Editor-in-Chief of Eurasia Magazine and Director of Eurasia Center

We use cookies on our website. If you consent to their use, we use them to measure and analyze the use of the website.
Information and Settings

Accept