The Road Of Internationalization Of The Rmb Under The Capital Controls

Under the globalization trend, all countries attach great importance to the internationalization if their currency. In the present study, topics of free convertibility and internationalization of the RMB are of related. In December 1996, RMB achieved current account convertibility, and then discussions are focused on capital account. Internationalization of the RMB and free convertibility under capital account are closely linked.With the growing power of China, the position of RMB is increasing gradually. Under the impetus of the border trade, the RMB started circulation abroad spontaneously. Given that fact, the Chinese government began to implement the appropriate policy adjustments to promote the process of internationalization of RMB. April 8, 2009, the State Department announced Shanghai, Guangzhou, Shenzhen, Zhuhai, Dongguan city as the cross-border settlement, RMB, and in July 2, announced the implementation of official document, which means that cross-border settlement of RMB is officially launched, and RMB step into the international process.This paper starts from the theory of currency internationalization, and then we discuss the relationship of internationalization in currency, and free convertibility under capital account. Experience of the internationalization of other major currencies is summed up. On this basis, the status of RMB internationalization at present is analyzed, combing with the status of China's capital account liberalization and cross-border settlement of RMB. We design the path of RMB internationalization under the control in the capital account: to actively develop border trade and economic cooperation with neighboring countries, to expand the scale of cross-border settlement and expand influence in the region, and to gradually make the RMB as China and China's neighboring countries'regional currency. In the process, we can achieve the balance between the gradual liberalization of the capital account control and the safety of financial market. RMB can eventually become freely convertible currency, and conversion from the regional currency to international currencies is countable.