Research Of The Costs And Profits Of RMB Internationalization

In 2009, the RMB gradually began to use in cross-border trade settlement. In recent years, the RMB internationalizationhas developed faster and faster. In the international trade transactions and foreign direct investment, the use of the RMB has been increasing; gradually established a sound platform for cross-border RMB services; RMB bond issuance increased; the RMB has become the reserve currency in more countries. In particular, at the end of 2015, the International Monetary Fund (IMF) announced that the RMB would join the SDR basket of currencies, which means that the internationalization of the RMB has moved a big step forward. China as a big country of the world's total economic output and trade volume, the internationalization of the RMB is also an important symbol of China's economic development. The main contents of this paper are the current situation and international degree of RMB internationalization, as well as the cost and benefits of it.Domestic and foreign scholars'study on international currency and RMB internationalization focused on the international currency definition and more concentrated in the theoretical and policy research. The main purpose of this paper is the internationalization of RMB, especially the cost and benefit of RMB internationalization. On the basis of the research achievements of previousscholars, the first part introduces the achievement and development of RMB internationalization in various aspects in recent years, and then use the qualitative and quantitative analysis method to study the cost and benefit of RMB internationalization.This paper is divided into six parts. Part 1 is the introduction. First of all. this part introduces the research background and significance, and puts forward the research question, namely the cost and benefit analysis of RMB internationalization. And then introduces the research ideas and framework of this article, and briefly describes the possible innovation and shortcomings of this paper. Part 2 is the theory and literature review, the main contents are about domestic and foreign scholars on the internationalization of the currency theory and the RMB internationalization of the literature review, including the meaning ofinternationalization of the RMB, conditions, the path to achieveand so on. Some studies are summarized and reviewed. The existing researches on the cost and profit of RMB internationalization are focused on qualitative analysis, and lack of quantitative analysis with real data. Part 3 is about the internationalization of the RMB Current Situation Analysis. Through the analysis of the current terms of the circulation of RMB in neighboring countries, currency swaps, the application of international settlement, foreign bond issuance, and the performance of the RMB internationalization of research the status quo, draw the degree of internationalization of the RMB. And use the international currency of the Index to evaluate the degree of the internationalization in the RMB quantitative assessment. Part 4 is the theoryanalysisabout the cost andincome of RMB internationalization. This part uses the theoretical analysis that the cost of internationalization of RMB mainly include:"ternary paradox" problem can not be resolved; RMB internationalization is facing the risk of reversal; the RMB will be similar to the US dollar in the face of "Triffln problem"; The market is more vulnerable to external shocks and so on. It is concluded that the internationalization of RMB will benefit from the international seigniorrage revenue, the international status of RMB and China, the dependence on the US dollar in foreign exchange reserves, the development of China's foreign trade and OFDI, and so on. Part 5is the quantitativeanalysisofinternationalization of the RMB's income and cost.Firstly, this part calculates the degree of RMB currency substitution, and then builds an empirical model to estimate the scale of circulation of foreign currency and seigniorage revenue. Part 6 is the conclusion and suggestion of this article, based on the previous analysis, research paper, this paper demonstratesvarious costs compared to the possible internationalization of the RMB, profit of RMB internationalization bring more effective, or should vigorously promote the process of internationalization of the RMB, and made some policy recommendations based on our situation.