Research On RMB Internationalization And Trade Development

Currency internationalization and trade development is an important Cutting-edge issue in the field of world economy study with the combination of theoretical and practical significance. Currently RMB internationalization has become a hotspot in both academic and political area. In this context it is essential to research RMB internationalization and China's trade development. In recent years, economic stability, rapid growth, sound monetary and fiscal policy, good balance of payments and powerful international reserves of China become the basis of soundness and higher international reputation of RMB, which has greatly speeded up the process of RMB internationalization. Since 21st century, the world has given considerable attention to the exchange rate of RMB. Whether in terms of the external pressure or from the perspective of domestic economic development situation, the exchange rate dispute is far from the end. Represented by the United States, Western countries have always been advocating that RMB is undervalued, that Chinese government is manipulating the exchange rate of RMB. Actually, Chinese government does not only over influence the exchange rate, but also push forward the reform of RMB exchange rate steadily.Exchange rate policy is an important and special policy of trade policy which influent the direction and the depth of trade development. The internationalization of a currency has an important effect on the exchange rate reforms of this currency. RMB internationalization and the changes in China's trade structure are closely related. Also, the degree of RMB internationalization is an important component of China's trade development. Under this background China's exchange rate policy must be included in the study system of the relationship between RMB internalization and trade development. China's increasingly high status in international trade determines that both RMB internationalization and its exchange rate need a stable development path, which is not only conducive to the development of China's trade but also has more important practical significance to balanced development of international trade as well as the world economic recovery.RMB has achieved internationalization partly depending on the rapid expansion of China's foreign trade. The internationalization of RMB has also promoted the further development of China's trade. On one hand, RMB internationalization can expand trade scale, optimize trade structure, and enhance trade efficiency as well as transfer trade patterns by making trade more liberalized and more facilitated. On the other hand, financial development can advance the internationalization of RMB in the way of promoting trade development.This paper is to study the mutually influencing and mutually reinforcing relationship between RMB internationalization and China's trade development. Mostly, it utilized several aspects--trade volume, trade structure and trade patterns--to study trade development. Meanwhile, it also used the mutual relationship between RMB internationalization and China's financial development in the specific analysis of the impact of internationalization on trade scale and trade structure. Further, it summarized the experiences of Japanese yen and Euro in internationalization. And then it analyzed to reveal out their general rule of internationalization, integrated the rule with RMB internationalization to conclude further conclusions:first, the RMB internationalization has a mutual promotion and mutual development relationship with trade development. Second, financial development is becoming a increasingly important factor to promote the internationalization of RMB. Third, the Japanese yen and the Euro's internationalization process suggest that both trade development and financial development play a crucial and indispensable role in the internationalization of a currency. Fourth, RMB internationalization must be effectively promoted in virtue of trade development and financial development of China.Further relevant policy recommendations to promote the internationalization of RMB are given. We should vigorously implement the strategy that using trade development to promote the implementation of RMB internationalization:first, in the aspect of trade flows, we should promoting the use of RMB in both export and import of China, even the widely use in other countries'trade. Second, in the aspect of trade area, we should promote the use of RMB from surrounding East Asia, to the whole world gradually. Third, in the aspect of policy guidance, we should encourage and guide trade participants to use RMB as a trade denominated currency, so that to raise its proportion of the use in trade gradually. And we should implement the follow-up strategy to promote the internationalization of RMB by financial development. On the basis of consolidating the results of financial development, it must be done to keep accelerating the pace of financial reform and development, which aims to offer a full-directional financial support to promote RMB internationalization.