flexible foreign exchange regime, as well as lifting up the remaining capital control measures. greater transparency is also needed – for instance, by increasing access of international credit agencies to the onshore renminbi market. however, capital account liberalisation requires a sound domestic financial system, as well as adequate institutional capacities, including firm supervision and macroprudential regulation. otherwise, a push towards more openness could cause volatile capital flows and financial instability. therefore, increasing the international role of renminbi will likely be a gradual process. opening of the financial system is a balancing act – and so far, chinese authorities have been successful in maintaining the balance. over the long term, structural conditions are in place for the renminbi to one day become a key international currency. as the world economy grows, more liquidity providers may be needed – perhaps resulting in a multipolar financial system, with multiple reserve currencies. and international investors will want to increase their stake in the chinese economy. china ’ s ongoing shift towards domestic consumption and services - oriented growth will mean an increased commercial potential across an array of sectors. opening up the financial sector to more foreign participation will allow china to fully harness these new opportunities. thank you. 3 / 3 bis central bankers'speeches

vitas vasiliauskas : the experience of the bank of lithuania in investing in china ’ s bond markets speech by mr vitas vasiliauskas, chairman of the board of the bank of lithuania, at the global summit on “ reserves management : navigating volatilities and the frontiers of innovation ”, beijing, 9 december 2019. * * * good afternoon, ladies and gentlemen, it ’ s my pleasure to join you today. in terms of investing in china ’ s bond markets, the bank of lithuania has been one of the pioneers among the central banks in europe and beyond. we have also recently become the managers of the ecb ’ s renminbi portfolio. i suspect this is the main reason why i was invited to this summit. therefore, i do not want to dwell on things that you all are very well aware of. instead, i will focus on something you probably have not heard about – on the “ china experience ” of the bank of lithuania, describing how and why we “ went to china ”. later i will provide some remarks on the remaining obstacles for further involvement of institutional investors – such as ourselves. i will conclude by briefly discussing the overall prospects of renminbi internationalisation – the over - arching topic of our panel today. but, before moving on, let me just briefly mention a couple of points on the international role of the renminbi, which will show why the timing of our involvement in the chinese bond markets was not so self - evident. indeed, over the last few years, china has made progress in opening up the country ’ s financial sector. from lifting the caps on foreign ownership in financial sector institutions, to increasing access to its onshore market – china is making more renminbi - denominated assets available to foreign investors. but these achievements were enabled by one key turning point that came before the most recent developments. the major milestone, of course, was the addition of the renminbi into the imf ‘ s sdr basket in 2016. this was a historic event, signalling to global investors that china was emerging as a significant stakeholder in the global monetary and financial system. subsequently, international investors, particularly sovereign investors, became much more interested in china. in this context, the bank of lithuania was ahead of the curve in 2012. that year, we decided to become one of the first central banks to enter china ’ s onshore bond market. this decision had come well before the ren