The internationalization of the renminbi has entered an adjustment and slowdown phase, said Lian Ping, Chief Economist at the Bank of Communications at a forum on Tuesday.

At the forum, held by Hong Kong Exchanges and Clearing Limited (HKEx), Lian said that there is still a ways to go when it comes to the renminbi's internationalization. The decrease in interest rates may bring new opportunities to the renminbi bond market. The circulation of Panda bonds—Chinese renminbi-denominated bonds from a non-Chinese issuer—–has been increasing in recent years, but the scale of Panda bonds cannot catch up with that of Dim sum bonds (bonds issued outside of China but denominated in Chinese renminbi).

The IMF has included China's yuan in an exclusive group of currencies that make up the basket of the IMF's Special Drawing Rights (SDR). According to Lian, renminbi internationalization benefits from a large portion of payment and settlement occurring in renminbi in international balance of payment.

In the short term, the stability of China's renminbi exchange rate is the main constraint of the offshore renminbi market development. Lian said the rapid development of the offshore renminbi market benefits from China’s high-speed economic growth and China's foreign trade, which causes the offshore market to hold high expectations of the renminbi's appreciation, and makes more overseas investors want to hold renminbi.

As China's economy slows down, however, and the interest margin between renminbi and USD narrows, the offshore market will start to hold a lower expectation of the renminbi's appreciation, and foreign investors be less willing to hold renminbi. The renminbi therefore faces depreciation pressure, which counts as one challenge in the denomination’s internationalization.

"If China keeps an economic growth rate of over 6.5 percent in the next few years, it will signal that China's economy has recovered," Lian said. Lian also stated that there is no need to overreact to China's "L-shaped" economy.

"Although the economy in Chinese mainland might have slowed down, recent statistics indicate that the economy has already begun to recover, and China's government will further support economic growth through fiscal policies and supply-side reform," Lian said.