The Imbalance Problem In The Process Of RMB Internationalization Research

Under the impact of the financial crisis, the dollar’s international monetarydominant role gradually gets weak, and the influence of RMB to the globaleconomic is rising significantly these years. As the Chinese government launched aseries of RMB internationalization strategy, RMB internationalization became thefocus of economists’ attention both at home and abroad, and that the process of itwhether can promote smoothly also became a hot topic.This paper mainly investigates the imbalances in the RMB internationalizationprocess. China’s international balance of payments disequilibria is getting moreserious, both with the current account surplus and capital account surplus, andChina’s foreign exchange reserve much more higher than normal level. There areseveral reasons. One is that our international trade is in the vertical trade division.Another reason is that currency substitution brings some effects to China’seconomy. All of these factors have caused negative effects to certain aspects ofChina’s international balance of payments.This paper firstly analyzes the basic concept of RMB internationalization,including what is RMB internationalization and the necessary conditions andbenefit of it. Then, we focus on the effects RMB internationalization brings toChina’s international balance of payments. There two aspects discussed—China’strade division in the world economy and currency substitution, and we also useeconomic model and empirical analysis to get practical analysis results, reachingthe conclusion about how RMB internationalization aggravates China’sinternational balance of payments disequilibria.For the impact of economic imbalances on RMB internationalization, wedraw the conclusion by referring to Yen’s internationalization experiences. Weanalyze the reasons for Yen’s failure from two aspects—international trade andfinancial market, and also give the applicability of Yen’s experience for RMB.In the end of this paper, we put forward the policy of how to avoid aggravating China’s imbalance of economy according to the conclusions above.