Implications Of Yen’s Internationalization To RMB’s Internationalization

As a country upgrades its global economic status, the country will inevitably achieve itscurrency internationalization. On the other hand, the degree of a currency internationalizationreflects the country’s position in the global economy. Acquiring the publish right of thecurrency is significant to both the development of a country’s economy and the improvementof the position in global economy. However, the currency internationalization is a long-termprocess, affected by many factors including the economic strength, the extent of financialmarket liberalization, financial environment, national policy and so on.After World War II, the Japanese economy developed fast and became the second largesteconomy. To adapt to its rapid economy development and obtain the benefits from Yen’sinternationalization, Japan has began to promote Yen’s internationalization since1960s.However, after half a century, the ration of Yen’s usage in the international trade was verysmall, comparing to that of US dollar, Euro and Pound Sterling. The internationalization ofYen was not achieved and the development was not that good, but which was paid moreattention was that Japan had established a relatively perfect financial system through theprocess of Yen’s internationalization and the opening of its national financial market. Tokyohas also become one of the world financial centers. Therefore, there must be someexperiences and points learning from Yen’s internationalization to China. Nowadays China’seconomy is becoming more and more stronger. To adapt to the improvement of China’seconomic role in global economy, both the status and the role of RMB will changesignificantly, becoming an international currency gradually. In addition, the financial crisistriggered by USA subprime mortgage crisis made people around the world lose trust in USdollar. Therefore, there is a sharp contrast between American economy recession and rapideconomic development in China. RMB’s internationalization has attracted much attentionfrom world policy makers and the theoretical circle. From current situation of RMB’sinternationalization, RMB has already played an important role in some countries and areas. RMB has already be used and circulated in ASEAN countries. However, it does not meanRMB has already been an international currency, there are still many factors preventing theRMB’s internationalization.There are many similarities between RMB’s internationalization and Yen’sinternationalization in twentieth century. This article analyses the factors hindering Yen’sinternationalization through the study of the process of Yen’s internationalization and itscurrent situation. Then, based on the current situation of RMB’s internationalization, it alsoputs forward countermeasures of RMB internationalization from the inspiration of Yen’sinternationalization. RMB’s internationalization will experience a long period, thus, Chinaneeds to take full use of its advantages and improve its disadvantages to create a gooddomestic and international environment. In addition, China can try to avoid the failures ofYen’s internationalization from the lessons and experiences of Yen’s internationalization.