Research On RMB Internationalization

This dissertation conduct the empirical study on internationalization of US dollar, Euro, and Japanese Yen, and the non-internationalization of Singapore dollar, drawing lessons from their internationalization process, which is based on the definition, approach, condition, measurement, and cost-benefit analysis of currency internationalization. We present the analysis of the RMB internationalization in aspects of the status, necessity, urgency, strategy, route arrangements and policy, as well as risks and the prevention approach. The conclusions are as follows,1,It is necessary and urgent for China, a country with great political andeconomic impact, to realize RMB internationalization.2,It is the right time for RMB to realize internationalization with the currentcondition.3,Chinese government should take measures to parallel the process of RMBinternationalization, RMB cross-border trade settlement, RMB investment andinternational loans, for its significant position in the whole process.4,China must continue RMB internationalization by opening up nationalfinancial market in good order, and establish the channel for oversea RMB toflow back from abroad, with RMB outflow in various manners.5,The advanced stage of RMB internationalization requires RMBconvertibility in capital account. However, china can push forward RMBinternationalization with partially opening in capital account, as convertibilityin capital account and RMB internationalization will promote one another.6,Measures should be taken to reduce risks, which coexist with benefits inthe process of RMB internationalization. 'CHAPTER ONE' introduces the structure, innovation and defects of the paper, by analyzing the value of RMB internationalization in global financial crisis, and current results of currency internationalization and RMB internationalization.'CHAPER TWO' analyses the implication of international currency and internationalization of currency, the approach, condition, measurement, cost-benefit analysis of internationalization of currency, and its relationship with convertibility in capital account.'CHAPER THREE' shows the necessity of RMB internationalization from the analysis of both positive and negative aspects , which summarize the experience of internationalization of US dollar, Euro, and Japanese Yen, and the non-internationalization of Singapore dollar. Moreover, the framework presents how to draw upon successful experiences to push forward RMB internationalization. US dollars and euro successfully implement their internationalization by formal system arrangements on global or regional level. However, Japanese Yen fails to reach the determined internationalization, for its separateness, fluctuation of Japanese Yen, and Japan's mal-functioning of a responsible, big country in the Asia financial crisis.'CHAPTER FOUR' analyzes the necessity, urgency, and status quo of RMB internationalization and comments on some viewpoints. RMB internationalization is a necessary and urgent issue, since RMB holds passive position in the international monetary system. China enjoys highly-concentrated risk for putting foreign exchange reserves mainly in US dollar, which is long being estimated to get depreciated. RMB has been widely used and circulated in many neighboring countries, and even been included the reservation capital by some individual country. RMB being given a cold shoulder in cross-border trade explains the fact that there still exist some obstacles in the process of RMB internationalization.'CHAPTER FIVE' shows the advantage, impediments, and opportunity of RMB internationalization. RMB enjoys advantages of the fact, that China is stable in politics, that china maintains high growth rate and the third largest economy in aggregate, and that it provides channels of RMB outflow through trade. What's more, China owns ample foreign exchange reserves and stable, strong currency, which has already been circulated in neighboring countries. Pediments exist mainly in RMB incomplete convertibility in capital account, lacking tools to avoid risks in exchange rate and interest rate, and limited capital channels for non-residents to get RMB. It is the right time for RMB to push forward its internationalization, when the current international financial crisis affects the confidence of the international community towards main international currencies, such as US dollars, euro, etc. to some extent.'CHAPTER SIX' presents the overall strategy of 'three steps', that is, to continue RMB internationalization on neighboring, regional, and international level in good order, and 'parallel pushing-forward ', that is, to advance the pricing and settlement of international trade, international investment, international loans, and international bonds, and to advance capital account convertibility and RMB internationalization. It also offers the specific measures to promote RMB internationalization.'CHAPTER TEN' analyses risks of RMB internationalization, such as, reducing the efficiency of Chinese monetary policy, upgrading the uncertainty of monetary demand, and increasing risks of attacks from international capital speculation.