The Analysis Of The Internationalization Mode Of Yen And Its Implication For The Internationalization Mode Of RMB

With the quick development of China’s economy and society and the gradual deepeningof economic globalization, the internationalization of RMB is put on the agenda by theChinese government. The internationalization of a country’s currency plays a role ofstabilizing the country’s monetary exchange rate and avoiding various risks caused byeconomic fluctuations. What’s more, it might create a series of benefits such as bringing thecountry considerable seigniorage and facilitating financing. Therefore, the internationalizationof RMB is imperative. The choice of international mode is vital to achieve theinternationalization of RMB. Referencing the experience and lessons on theinternationalization of currency from other countries and regions, especially experience fromJapan which is also located in the east Asia, will inspire the internationalization of RMB. Theinternationalization progress of yen is the most worthy of research, which can provide a moreintuitive and valuable reference for the internationalization of RMB. Japan, as well as China,is located in Asia, whose economic development model has many similarities with China’s, soexperience from Japan have great reference value to China.For example, during the economic recovery, Japan’s foreign exchange reserves havebeen increasing with the development of economy, which makes Japan under greatappreciation pressure. Another example is that Japan mainly exported labor-intensiveproductions during the early stage of economic development. Various problems caused byimperfect economic system and the economic structure appear gradually with the rapiddevelopment of Japan’s economy. The above issues are similar to China’s economicdevelopment and problems faced by RMB. Thus, yen can be regarded as a valuable referencefor the internationalization of RMB.Analyzing the process and pattern of internalization of yen, combined with the changesin the world economic structure will give revelations to the internationalization of RMB. Theunique international mode of yen is the main research content in this paper. Firstly, the generalpattern of internationalization of currency will be derived by analyzing theinternationalization mode of internationalization currency such as U.S. dollar and Euro.Secondly, analyzing the unique pattern of the internationalization of yen by retrospecting theprocess of the internationalization of yen, comparing the internationalization of yen with thegeneral mode of currency internationalization. Besides, summarizing the advantages anddisadvantages of the mode of yen and drawing experience and lessons. What’s more,combining other countries’ path of internationalization of currency with China’s economicdevelopment pattern and current situation is vital for China to choose the suitable path ofinternationalization of RMB.