Comparative Study On UK And Germany's Motives To Promote The Internationalization Of RMB

China has been enthusiastically promoting the internationalization of its currency the RMB since the 2008 Global Financial Crisis.Based on the international currency typology formulated by Susan Strange,RMB is currently a negotiated currency,which calls for political analysis of both the issuing state and that of the 'followers' as well as the interplay between them.However,many researches on RMB are focused on politics within the issuing state and works on why follower states support RMB are relatively scant and the majority of them simply investigate the economic considerations.Hence,we introduce international currency theories and Putman's two-level game theory to investigate the incentives of the follower states and the underlying reasons by adopting cases of the UK and Germany.We probe the motives of Level ? actors(domestic interest groups)and find that British support primarily derives from the financial industry's desire to develop London into an RMB products trading hub.Meanwhile,the real economy's need for RMB solutions constitutes Germany's foremost motive.We argue that this divergence is determined by interests and institutions with the latter—the cleavage between Liberal Market Economy(LME)in Britain versus Coordinated Market Economy(CME)in Germany—being more prominent.Then,we propound that Level ? actors(chief negotiators)are influenced by interests and ideas with the former performing a dominant role.For Britain,inking agreements with China had helped to boost commercial relations with the country,facilitating British recovery from the GFC and Conservative Party's reelection.For Germany,China's aid during the Eurozone crisis had helped Chancellor Merkel(Christian Democratic Union)to cap Euro depreciation and bailout packages,lending support for her reelection.Supporting the RMB thus arguably serves as a goodwill return.Finally,by adopting Norloff's three faces of power framework,we find that though China has been strengthening its power,but has not yet achieved a magnitude to warrant a transfer in power from the U.S which meanwhile has not been substantially perishing power in these two countries.The implication is the still-limited usage of the RMB compared to the dollar.Finally,we explore the relative importance of the two levels and argue that Level ? is the leading force while Level ? plays a supporting role.However,under some circumstances,Level ? would initiate agreements to provide public goods to the supporting coalition.