Research Of Choices About RMB Internationalization

Over 30 years of China's reform and opening up, China's economy has undergone earth-shaking changes. Our total economic output has exceeded Japan and became the second largest in the word. Along with the significant increase in irtemational status and overall national strength, China has already played a very important position in the world economy. Meanwhile, China's influence on the world economy, even the international community, has been enhanced. Any kind of international currency's growing up must have a powerful economic strength as a backup, no matter U.S. dollar, Japanese yen or the euro. With China's national strength and its comprehensive impact on international economic and political affairs rising, RMB internationalization must be put on the agenda. This is a natural course of the development. Now, RMB has already been circulated in some Asian countries and around. Moreover, China's economic development has not only accumulated economic base and international reputation, but also provided a solid foundation for RMB internationalization.The financial crisis in 2007 has fully demonstrated the shortcomings of U.S. dollar dominance of the international monetary system. In this crisis, China suffered the lightest. As the outstanding performance, RMB internationalization has boomed once again. Besides to gain seigniorage, RMB internationalization has more important significance. Firstly, it can change the unfair order of the current international monetary system, and bring a more equitable financial environment. Secondly, it will improve the awkward situation of a power economy with small currency. Thirdly, it can bring more opportunities for China's economic reform and new economic growth points. Fourthly, It can reduce the depreciatory risk of the current China's foreign exchange reserves with more than 70%U.S. dollar. Lastly, it will also decrease the transaction costs and the exchange rate risk for China's enterprises, so, this will improve their international market competitiveness to some extent.Japan and China are the Asia's two largest economies. They are not only geographically close, but have the similar rapid economic development stage and background. China and Japan have both experienced 30 years'rapid economic growth from a closed economy to a market economy. In this phase, both two have adopted the export-oriented development model, and accumulated huge foreign exchange reserves from trade surplus for years. Meanwhile, both were facing the dual pressure of currency appreciation and the financial markets liberalization. Therefore, we can draw lessons from the Yen international experience for the Implementation of RMB international.Finally, by comparing the yen international background conditions, and with reference to the experience and lessons of Yen international, the paper put forward some rationalization path and policy suggestions to the promotion of RMB internationalization. Surely, it has taken into account the existing conditions and the international environment. RMB internationalization should be on basis of the domestic and international finance, with foreign currency transactions as an initial point. Starting from the neighboring ASEAN countries as well, then, it will come to the world from a certain region. This is the suitable path for RMB internationalization combined with the actual situation in China. Furthermore, the author has not only proposed the direction of the RMB internationalization, but also given some policy recommendations and thinking. If we can actively improve and deepen various reform measures, the process of RMB internationalization will must be further promoted after RMB regionalization.