Research On The Currency Competition In The RMB Internationalization Process

The currency competition is an inevitably question in a country currency internationalization process. In history, US dollar substitution British pound; the rise and decline of Japanese Yen; the birth and development of Euro, all were the currency competition results.Looking from this angle, the RMB internationalization also needs to participate in the currency competition, challenges the status of the US dollar, Yen, Euro and so on international currencies. We can call it the new currency competition, because it has never seen before a developing country currency compete with the developed country currency. The RMB will be facing what kind of challenge? Whether it does have the strength to win? How should our Government formulate the effective strategy? Based on these questions, this paper has formed one about the currency competition and the RMB internationalization research frame.This article firstly describes the relationship between the currency internationalization and currency competition,Focus on explaining the factors of currency competitiveness,paving the theoretical foundation;Then base on the currency functions'data, introduces the major international currencies competition situation and the RMB status from global and regional views, to provide a overall understanding of the existing international monetary pattern that RMB challenges;Next,Select major indicators, using the Factor Analysis to evaluate the currency competitiveness between RMB, US dollar, Yen, Euro, British pound and Swiss franc. The conclusion demonstrated the RMB has the internationalization potential and financial factor is the biggest barrier, then summarize its advantages and disadvantages by further analysis.Next, Review the history of US dollar, Yen and Euro internationalization to sum up experiences for RMB;At last, we put forward the strategies.The paper concludes that the RMB internationalization should adopot the market maintain and market alliances strategies. Market maintain means improving the RMB competitiveness to lay an internationalization basis; Market alliances means seeking the regional monetary cooperation to expand the influence of the RMB.In this process,the government should support to establish a effective and controlable RMB outflow-inflow mechanism,and China also needs to coordinate the interests of all parties, in order to create a stable political environment for the RMB internationalization.