The Study Of RMB Internationalization Under Dollar Decline

With the eruption and deepening of the subprime crisis, the dollar’sinternational status has been unprecedentedly challenged. The voice of de-dollarization keeps rising and dollar-dominated international monetary system is onthe rock. In this case, the world’s non-dollar currencies speed up the process ofinternationalization. Taking this opportunity, the internationalization of RMB is alsoin rapid progress. With China’s international rankings of economic strengthimproving, as well as the international political status rising, RMBinternationalization is of great concern. Therefore, this thesis conducts an in-depthanalysis into the theoretical foundations for the practical promotion of RMBinternationalization.Under normal circumstances, a country’s currency internationalization is theinevitable outcome of a certain level of comprehensive strength in economy, politics,culture and son on. In the meanwhile, the currency internationalization in turnpromotes the economic and social development. Thus not only the developedcountries also the developing countries attach great importance to currencyinternationalization, active in pushing their currencies to the world.Due to China’s rapid economic development, the stability of RMB and thetendency of internationalization in our neighboring countries and regions, China’simplementation of RMB internationalization now have certain internal conditions. Inaddition, the global financial crisis triggered by the subprime crisis has shaken thedollar hegemony, resulting in the query of existing international monetary system,which means the mature external environment. Therefore based on our currentsituation our country should make full use of these advantages and seize thisopportunity to open up a road for currency internationalization with Chinesecharacterizations. This thesis is mainly divided into five parts to elaborate the issueof RMB internationalization under dollar depreciation. The first part is about currency theory, which mainly includes two aspects; thefirst is Adam Smith and Marx’s classical money theory, the second aspect is Keynes’smodern monetary theory.The second part is about the shaking of dollar’s credit. As a result of thespamming US dollar and the excessive innovation in financial products, dollarhegemony is threatened. The detailed illustrations of the historical process for USdollar’s international status will offer some lessons for the internationalization ofRMB.The third part is the cost and income of RMB internationalization. This part willfirstly analyze the RMB internationalization by SWOT, and then make a quantitativecomparison based on the empirical data, finally reach the conclusion that the incomewas greater than the cost of RMB internationalization.The fourth part contains the specific strategy for promoting RMBinternationalization. This part first theoretically explains the basic ideas andprinciples for the strategy in the RMB internationalization promotion, and thendescribes in detail steps and measures for promoting RMB internationalization.The fifth part covers some suggestions, risks and precautionary measures forRMB internationalization. It will present some policies to guarantee the smoothlypushing forward of RMB internationalization from legal aspects, and some dodgesand precautionary measures for the risks during the process of RMBinternationalization.