A Comparative Study On The Internationalization Of RMB And

Since the international financial crisis happened in2008, the discussion aboutRenminbi internationalization has been heating. As the global economic environmentchanging and the domestic financial market improving, the non-resident demand onRenminbi is growing fast. The internationalization of Renminbi is under a specifichistorical status, and the rebalance of world economy is accelerating this process,which determines the significance of Renminbi internationalization. The case of Yenis an example of currency internationalization. Japan in1980s is similar to today’sChina, so the writer will explore the way for Renminbi internationalization throughthe comparison between Renminbi and Yen in terms of internationalization process.In the content, the writer reviews the international background and domesticeconomic and trade situation of two countries in the period of currencyinternationalization process at first. In terms of the space dimension, Yen follows adirect globalization path based on its close partnership with OECD members. WhileRenminbi chooses a three-step gradual path, which is peripheral, regional and global.In terms of currency function, unit of account, vehicle of finance and store of valueare the three aspects in comparison. Then the writer summarizes the reason why Yendid not perform very well and analyzes the outlook of Renminbi. the Offshore marketand over-the-border trade settlement are two major platforms for pushing Renminbitoward world.China may come up short when it comes to the key dimensions of financialmarket development and openness. The convertibility of the Renminbi, theliberalization of capital account and financial system weaknesses are restrictivefactors for the international role of the Renminbi. The Renminbi internationalizationand financial reform should of course obey the overall reform and opening-up strategy,the issue is born from the transformation of both home and aboard environment.Sticking to the gradual path, following the law of market economy, Renminbi willachieve a more suitable international role in global currency and economic system.