Research On Obstacles And The Path Of The Internationalization Of RMB

China has been the second largest economy in the world since2010when China overtook Japan. Undoubtedly China will gain a more and more important role in the world political and economic arena with its strength growing. However, the Yuan is still not included in the international monetary system, which hardly suits the growing need of the market. China, as the world’s second largest economy, has not gained corresponding international status. Therefore, it becomes strategic and realistic to discuss promoting international monetary system reform and promoting the internationalization of RMB.China is getting more and more widely recognized in the international community with the increase of its economic strength, laying a solid foundation for RMB internationalization. Nowadays, RMB has been widely used. For example, in Southeast Asia, Yuan has become hard currency just after the dollar, the euro and yen. In the border of southwest China and related region, Yuan is called "little dollar". The scope for the settlement of cross-border trade in the Chinese currency has increased at a geometric rate just in last five years. There are several active RMB offshore markets, such as Hong Kong, Macao and Singapore, and RMB-related products develop rapidly. Meanwhile, Chinese government has also unveiled a series of measures to clear the way for the internationalization of RMB. People’s Bank of China has signed several currency-swap agreements with different Asian countries. China (Shanghai) Pilot Free Trade Zone was founded in2013, in order to test financial reform and encourage financial innovation. Chinese government expands a trial program for settling trade deals in Yuan to most of the country, and there is no limit on the foreign trade territory. Domestic companies are conditionally allowed to move RMB offshore for direct investment purposes. According to China’s actual conditions and economic development, China has to take the advantage of the favorable situation to look for a best way of increasing RMB’s global role.This paper mainly focuses on the analyses of benefits and cost as well as obstacles of the internationalization of RMB, and brings up some suggestions based on references of other international currencies. The first chapter reviews the research of currency internationalization, preparing the basis for the further studying. The second chapter introduces the conditions and the current situation of the internationalization of RMB. The third chapter uses the quantitative analysis method and qualitative analysis method to analyze the benefits and costs and the objectives of the internationalization of RMB. The fourth chapter analyzes the obstacles of the internationalization of RMB, in order to put forward some pertinence proposals. The fifth chapter uses the comparative method to analyze the internationalization of the major international currency, such as the pound, the US dollar, Japanese Yen and the euro, in order to extract the useful experience and learn a lesson. The sixth chapter provides a strategic way to achieve the goal and some strategic measures on enlarging the use of RMB and establishing RMB backflow channels.