Rmb Internationalization Research

The progress of RMB internationalization has begun, and with strengthening of China's synthetic strength and deepening of economic and trade intercourse between China and other countries in the world, RMB internationalization must be pushed forward. Thus, it is urgent to research such problems as what strategies to take to reduce the risk in RMB internationalization and obtain more internationalization benefits, finally, to render RMB a international currency successfully.The present paper will make a deep research on the relative questions about RMB internationalization from five aspects as follows:In the first part, we focus on defining scientifically the RMB internationalization. On the base of analysis on the meanings and functions of international currency, we present the RMB internationalization definition and analyze the relationship between RMB internationalization and RMB free convertibility, and between RMB internationalization and regionalization in detail.In the second part, we analyze the conditions for RMB internationalization in detail, including international political role, economic scale, the stability of currency value, the financial market development and the share in the world trade.In the third part, we first analyze the degree of RMB internationalization from the historical and international contrast dimensions, and then deeply analyze the current situation and potentiality that RMB possesses to fulfil official founctions( as anchor currency, official reserves and interventions) and private functions(as denomination, portfolio allocation, vehicle and substitution currency ) from currency international functions and currency competition.In the fourth part, we mainly study the effects of RMB internationalization on China, Asia and the world. Especially, we analyze deeply the effects of RMB internationalization on China, including the positive effect(international seigniorage benefits, deficit finance, international politic benefits, the promotion of finance, investment and trade, the asymmetric advantage of money policy, reducing the risk of crises), the negative effects(focusing on series of policy dilemmas with RMB internationalization). Finally, we make an comparative analysis for RMB internationalization effects under different exchange rate regimes.In the fifth part, we put forward the RMB internationalization strategies with China's characteristics from basic national conditions. We study and design such problems as the strategic steps of RMB internationalization, the exchange rate policy on different stages of RMB internationalization, the opening strategies of the capital account, the development of financial markets and international monetary relations, while we also make a deep research on how to push forward the RMB internationalization by participating in the regional currency cooperation.According to our research, we make several valuable conclusions as follows.1. We should grasp the definition of RMB internationalization from two dimensions including dynamic and static states.2. Under different international currency regimes, the internationalization effects are different; and six policy dilemmas will be faced with RMB internationalization; the higher China's synthetic competition power and RMB international status are, the more benefits we can obtain by RMB internationalization, and the less we will assume. Whereas, The costs of RMB internationalization may be higher than the benefits.3. It is a prerequisite for its internationalization to keep RMB internal and external value steady during the period from the initial to complete internationalization. During the period when RMB makes for the central international currency from the completely internationalized currency, RMB exchange rate should be gradually more flexible to reduce the cost of the internationalization and obtain more asymmetric benefits.4. RMB exporting scale should correspond to China's strength and RMB international status, which is in favor of reducing the cost of RMB internationalization.5. On the initial stage of RMB internationalization, China's balance of payments should be kept surplus, especially, the current account surplus will be more important. As the degree of RMB internationalization is very high, a sustainable structure of balance of payments is as follows: combining deficits in the trade account and surplus in the current account with deficits in the capital and financial account.