A Study On Internationalization Of The RMB

The studies on internationalization of the RMB are of great significance both theoretically and practically. With the Chinese economy advancing, the position of RMB has been strengthened in her neighboring countries, however on account of the particularity of the circumstances in China, the existing theory of currency internationalization can not be completely applicable to our country, which requires further enhancement in the theories available according to the actual scenario in our country. Since the global financial crisis, the dramatic fluctuations of USD have left China vulnerable to increasingly tremendous risk of exchange losses. Meanwhile, in order to keep inflation within control, the cost of counteracting dollar-denominated assets is ever on the rise, which, evidently, has failed to match China’s current economic power and international status.The internationalization of the RMB will make great contribution to the solution of these problems facing our country of status quo. Nevertheless, the internationalization of the RMB has just been under way with many issues to be desired. Granted, there have been precedents of success of British pound, USD, German mark, the Japanese yen and the Euro’s serving as references, there remain great disparities between the international background of China as well as her domestic situation and those of the above-mentioned currencies. Furthermore, the currencies above vary in their own courses and model of development. It’s one of the major goals of this essay to determine which successful model China should make the full use of Based on the studies, the essay set its final goal on the policy recommendations for the guidance of the internationalization of the RMB with due analysis of China’s current issues.By means of sstandardized analytical methods, with theories applicable for the internationalization theory of RMB, the thesis will make an empirical analysis on the internationalization process of German marks as well as the similarities and differences of development between German Mark and Japanese Yen through the use of comparative analysis. Then, focusing on the revelation of the divergent courses to the internationalization, the thesis will further analyze the current scenario of internationalization of the RMB, the momentum of her development as well as her current problems. Combining the successful experience in achieving the internationalization of currencies of other countries and China’s status quo, the thesis will propose its recommendations on the relevant policies making.