Why must the Renminbi be controlled? The core is not the exchange rate, but the lack of competitiveness Recently, regarding the Renminbi CRS、 A lot has been written about foreign exchange controls and capital outflows, but returning to the fundamental question, why does China need to stabilize the RMB exchange rate through foreign exchange controls? Why should we prevent large-scale capital outflows? The core is that the competitiveness of the Chinese yuan itself in the global market is not enough. There are several reasons why the competitiveness of the Chinese yuan is insufficient: Firstly, China lacks essential global purchasing goods. China exports a lot, but most of them have advantages in production capacity, supply chain, cost, and delivery, but there is almost no advantage in absolute pricing power. Many times when buying Chinese goods, it is because they are cheap, fast, in large quantities, and stable, rather than because it is completely impossible to buy without China. As long as the buyer does not have to buy, it is difficult for the seller to demand that the other party settle in RMB. The reason why the US dollar is strong is not only because of the US financial openness, but also because the US has mastered the high-end chip ecosystem, operating systems, cloud services, software platforms, financial markets, US debt assets, US debt system, global clearing network, and military security order that cannot be avoided globally. Even if they hate the US dollar, many countries, companies, banks, funds, and central banks cannot avoid it. The issue with the Chinese yuan is exactly the opposite. China has sold a lot of things, but not enough are strong enough to make others have to settle in Chinese yuan. Secondly, the RMB asset pool is not strong enough. To internationalize a country's currency, it is not about letting others accept the Chinese yuan, but about whether others are willing to hold the yuan for the long term, whether they are willing to use the yuan for financing, whether they are willing to use yuan assets as reserves, and whether they are willing to use yuan bonds as collateral after receiving the yuan. Behind the US dollar lies US bonds, which are the world's most core safe assets, liquidity tools, and collateral. Although there are Chinese treasury bond bonds, Chinese banking system and Chinese assets behind the RMB, from the perspective of international investors, market depth, hedging tools, legal transparency, freedom of capital entry and exit, and policy predictability cannot be compared with the US dollar system. Thirdly, China's long-term trade surplus has actually limited the outflow of the renminbi. International currency must flow in large quantities overseas in order for others to have your currency. The long-term trade deficit of the United States is equivalent to continuously exporting US dollars to the world, while China has a long-term trade surplus. After selling goods, foreign exchange flows back to China, and coupled with capital account controls, it is difficult for the RMB to naturally settle into a large-scale financial cycle overseas. The Chinese yuan can be used for some trade settlements, but the settlement currency is not equivalent to a reserve currency, let alone a global financing currency. Fourthly, there is a conflict in policy objectives. For China, financial security takes priority over currency internationalization, so the renminbi cannot flow freely like the US dollar. As long as capital cannot freely enter and exit, it is difficult for the RMB to become a truly global currency. However, if it is completely free to enter and exit, it is easy to trigger capital outflows and exchange rate pressures in the current situation where the competitiveness of RMB assets is insufficient. So the lack of competitiveness of the RMB is not simply due to exchange rate control, but because the RMB has not yet formed a complete global currency loop. The commodity side lacks sufficient irreplaceable high-tech pricing power, the asset side lacks a deep global safe asset pool, the financial side lacks a sufficiently open financing and collateral system, and the institutional side lacks a free exit mechanism for global capital to hold with confidence in the long term. The real problem with the Chinese yuan is that there are too few "goods" sold in China that must be settled in Chinese yuan. In fact, this question is very simple. Just look at who the business representatives brought by the US team during this visit to China are, and who the Chinese entrepreneurs attending are, you can see the gap. Companies such as Tesla, Apple, Nvidia, Qualcomm, Citigroup, Goldman Sachs, and BlackRock come from the United States, representing global technology platforms, core chips, financial capital, payment networks, and asset management rules. There are also very outstanding entrepreneurs in China, but I don't need to say more about what they represent. Let's make a bad joke, American businessmen are researching how to make money from all over the world, while Chinese businessmen are researching how to make money from Chinese people. To internationalize the RMB, relying on export scale and trade surplus is not enough. What is truly needed is global irreplaceability. Only when others must buy your technology, access your platform, use your financial assets, and comply with your industry rules, is your currency eligible for long-term holding by others. Bitget is here, VIP! Crypto、 US shares CFD， Global Advantage One Stop Layout