The Study Of RMB Internationalization

The internationalization of RMB is the inevitable result of China's long-term economic growth and increased political strength, which consistent with the interests of our national development strategy. RMB internationalization means China can get a position in the international, status and have power to participate world rules establishment in international economic affairs. This power is a reflection of the country's political forces, as well as a potential international economic resource.In the evolution of the global financial system, the internationalization of RMB not only conducive to the multi-polarization development of the international monetary system, but also means China can reflect the nation's long-term interests and economic goals in the world economy by setting down the international financial rules to achieve its corresponding systemic benefit.The international currency system of the 20th century is a core currency surrounded with some outer currencies, just like the structure of the solar system. It is improper, since it has obvious flaws. The political pattern should be multiplex rather than the hegemony of America. In fact, no financial system today could redistribute the commonwealth to us dollar holder only. We should strive for constructing a new system to discard the dominion the America. The structure of the 21st century should be two or three core currency, constructed in different trading zone, competing with US dollar. In January 1st of 1999, Euro began in use. Obviously, the growing unification of Europe makes a solid political and economic foundation to vie with US dollar. Working as a stroke to the currency system, Euro makes a model for the followers.In 1997, the international reputation of RMB get an enormously elevation through the high degree of responsible attitude demonstrated by the Chinese government in the Asian financial crisis, which began to be accepted neighboring countries and regions residents gradually as a trading and clearing currency and circulate in the surrounding areas. In the year of 2007, the global financial system is structured destroyed by the subprime crisis in American. The crisis led to renewing the global main currency which gave a great opportunity for RMB internationalization.The study of internationalization of RMB differs from a general study of pure theories. It has a strong realistic meaning. So some analysis measures, such as combination of theories research and positive analysis, combination of quantitative analysis and qualitative analysis, combination of antitheses and induction, etc. are adopted in the paper. As to the concrete contents, the thesis first described some academic evidence for the internationalization of currency, then analyze the potential income and risk of the internationalization of RMB. After that, the internationalization process of US dollars,EURO and Japanese YEN are compared between each other and their successful experience which China could use for reference are summarized. In addition, this paper analyzes the current situation of all conditions that the internationalization of RMB will need according to the basic conditions for currency internationalization raised by IMF. At last, some suitable strategic choices,for the internationalization of RMB are claimed.The article starts from the theory of money internationalization, assays situation of RMB internationalization and compare the three big process of money internationalization. Probing the feasibility and the choice of path of RMB internationalization.. Expound the concrete ways of push on RMB internalionalization.In the first part, the writer begins with logical concepts, defines the connotation of the internationalization of currency, divides the levels of the internationalization of currency and measures the degree of the internationalization of currency.In the second part, the writer analyzes the present condition of RMB internationalization, the exchange of RMB in common item has already realized; the market for changing RMB has also formed; the formation mechanism of rate is valid; a great deal of RMB is circling out. The character of RMB internationalization. the weak basis exists with the currency internationalization; the transformation of economy exists with currency internationalization; the role as common currency in the country exists with the role as international currency in global scope. The condition of RMB internationalization. the economical power is the basis; the exchange of RMB pushes RMB internationalization; the trend of financial internationalization is the outside condition; the dependence of the four grounds deepens the economical basis of the four currencies to integrate.In the third part, the writer, taking three major currencies in the world as Dollar, Yen and Euro as samples, reviews their process of internationalization, analyzes and obtains their respective characteristics.Through analyzing the characteristics in the process of internationalization of the samples currencies, the writer seeks the general law of currency internationalization:strong economic power is the basis of the internationalization of currency; developed and perfect financial market is the carrier of the internationalization of currency and it supplies the internationalization with policies; overvaluation in an enormous disadvantage to the development of currency in the process of internationalization.In the forth part, the article introduces the benefit and the lost of RMB internationalization. As for the benefits of RMB internationalization, the most direct interest is the increase of seigniorage revenue. And the process of RMB internationalization could change the dominant roles of US dollar, which could support the diversification of world political and economic structure, and it would facilitate the external economic activities and the development of multilateral exchange between countries, and especially it would facilitate the economic and trade activities and external investment in our neighboring countries. Also, RMB internationalization could enhance monetary and fiscal discipline and deepen the development of domestic capital market.In the late part, the writer mainly devotes to the discussion of necessary reform and policy measures for RMB internationalization and the several stages that the RMB internationalization would experience. The reform and policy measures are that the economic regime reform should facilitate to establish modern corporation system, transit the mode of economic increase, advance the development of foreign trade and external investment, accelerate the free convertibility of capital account, boost the control and independence of central bank, maintain the stabilization and promote the development of financial market.