The Selection Of RMB Internationalization Path Under The Constraint Of Target Interest

The global economy has been hit hard by the subprime crisis in the United States and the European debt crisis. International monetary system which dominated by the dollar has been impact. People expect more international currency. At the mean time, Chinese economy continues to develop. By the end of 2015, the total economy and total goods trade of China all rank second in the world, and they hold the upward trend. The status of China in the global economy and the market continues to rise. However, the international status of China’s legal tender currency RMB is not consistent with the status of China’s economic power. Therefore, many domestic and foreign experts and scholars support that RMB should seize the chance to become an international currency as early as possible.This article analyzed the selection of RMB international path under the constraint of target interest, expected to promote the RMB internationalization.The contents of this article are as follows: the first chapter is the introduction, pointed out the background and the significance, describes the basis framework and research methods, points out the innovations and shortcomings; the second chapter is based on current situation of RMB internationalization, giving the constraint of target interest, and giving the principle, background and effect of the target interest; the third chapter says the experience of the nations which have accomplished the internationalization of currency showed that the target interest affects the path, and the different paths lead to different results, success or failure. And this is a reference to RMB internationalization; the fourth chapter is with the Chinn and Frankel model and Stata12.0, empirically analyzing the influence factors of currency internationalization and the result. At the meantime this chapter gives the influence of these factors on the choice of the path of internationalization of the RMB; the fifth chapter summary the research conclusion, put forward the selection of RMB internationalization path under the constraint of target interest.This article gives the main conclusion by analysis. Firstly, we take RMB internalization as a part of China’s macro strategic layout and cooperate with China’s globalization strategy. The target interest of RMB internalization says at the primary stage to eliminate China’s participation in global economic activity in the "original sin", to improve China’s position in the global industrial chain, and to achieve a positive interaction between the real economy and the internationalization of the currency; at the intermediate stage to resolve China’s excess reserves, control of international financial risks, and to win the initiative in international competition; at final stage through theinternationalization of the RMB to promote the steady growth of China’s economy, so that China has become the world’s financial power, economic power. Secondly, we should pay attention to the impact of economic fundamentals when we give the path under the constraints target of RMB internationalization, including the improvement of economic development, foreign trade strength, financial market construction, boost the strength of the RMB exchange rate, and so on, and we should improve RMB charm. Finally, it comes to the conclusion that the path of RMB internationalization interests under the constraint of target interest is: at present stage we should focus to steadily create overseas demand for RMB; at middle stage focus on deepening reform for financial market; at late stage focus on all aspects of a comprehensive upgrade.