Income And Cost Analysis Of RMB Internationalization

Over the past several decades, the fast economic growth in China and itsincreasing economic integration with the other countries have lifting greatly theinternational status of China. During the Asian financial crisis, China was seen as aresponsible country, for its efforts in keep the stability of the RMB. Now, China is notonly the world’s third largest economy and second largest trading nation, but alsoholds the largest amount of foreign reserves in the world. China is no longer anoutsider in global financial events, and its currencies have more influence to the othercountries in the world. Something about RMB internationalization becomes the hotspot in China’s decision-making strata and the academic circle.First，the author did some research to the RMB internationalization’s literatureand material，especially on the income and cost of the RMB internationalization. Sofar, the scholars already has the systematic approach about the income and cost ofRMB internationalization, they got the different viewpoint and conclusion．Then, the article would collect the domestic and foreign data to discuss what thecurrency internationalization is and how this economic phenomenon to influence acountry. We would clear about the RMB internationalization definition、the condition、the degree and the prospects for development in the theory stratification plane.With China’s own actual, we would collect the Chinese data to do some theoryand qualitative analysis from two aspects separately, namely, the income and the cost.When talking about internationalization is beneficial to China, the article wouldfocuse on the analysis of seigniorage income from other countries and the empiricalanalysis. When it comes to the cost of the currency internationalization in China,something about monetary substitution would become the key point, the article woulddiscuss the relationship between the rate of currency substitution and some factors inthe macroeconomic with some empirical analysis.Finally，from the analysis of the above, the author would summarize how topromote RMB internationalization in China on the current economic situation andpropose some policy about the RMB internationalization correspondingly.