The Research On The RMB Internationalization Strategy Based On The Cost And Benefit Analysis

In2008, the eruption of financial crisis had a crush on the global economics. In orderto keep the stability of the economics, the major economies took many economic actions.The Fed took loose monetary policies to increase the supply of money to the financialmarket, as a result pushing the price of goods to a higher level. The exchange reserve ofChina continues to accumulate with the continuous accumulation of the U.S trade deficit asan excuse for the United States to force china to appreciate the RMB exchange rate. Butthe truth of the problem is the deficiencies of the current dollar-oriented monetary system.First, after the collapse of the Bretton Woods system, the world needs a currency to act asmeasures of the value of goods and means of payment and functions of storing. At thistime, because of the strong economy, political stability, and the large scale of financialmarkets, dollar extends its functions in the Bretton Woods system. But the Triffin problemstill exists, that is the controdiction between the stability of the dollar and the output of thedollar. In order to improve the trade balance, the United States forced RMB to appreciate,but bringing great trouble to our country’s exporting department. The implementing ofRMB internationalization strategy is not only good for the import and export enterprises ofour country to grasp the rights of settlement, but also for lowering the pressure of moneysupplying. The bad situation of Euro and the weak dollar has provided a rare opportunityfor the internationalization of the RMB.Currency internationalization is the product of a country’s economic development to acertain stage, and is decided by a country’s economy and the scale of foreign trade. Theprocess of RMB internationalization needs not only promoting measures but also measuresto control the risk.This paper focuses on the benefit and cost analysis of the internationalization of RMB.The first part reviewed the research of currency internationalization, and the second part isthe conditions of the internationalization of the RMB, development state and degree ofinternationalization. The third part used the quantitative analysis method and qualitativeanalysis method to analyze the benefits and costs of the internationalization of the RMB. The fourth part used the comparative analysis method to analyze the process of the majorinternational currency, and extracts the useful experience. And the result is benefitsoutweigh the costs. The fifth part provided some strategic measures to promote theinternationalization of the RMB.