The Selection Of The Mode Of The RMB Internationalization

Since the collapse of the Bretton Woods System, over the years, U.S. A continued plundering the wealth of other countries by the hegemony of U.S. dollar. This makes the issue of "how to deal with dollar hegemony" becomes an urgent problem of the international community, particularly of the economy-rising countries. In the21st century, along with the rapid rise of China’s economy and the sharp increase in the volume of trade, the voices of appealing the internationalization of RMB are increasely higher. April2009, the State Council officailly approved Shanghai, Guangzhou, Zhuhai, Shenzhen and Dongguan to carry out the cross-border RMB trade settlement pilot and the prelude of RMB internationalization officailly opened. The RMB internationalization is not only able to effectively curb the dollar hegemony, but also help improve the economy and international status of China.Through the study of the world’s major international currency experiences, the paper divides the mode of currency internationalization into Capital Output Mode and Trade Settlement Mode by the modes of currency output. At present, China’s monetary authorities mainly adopt the Trade Settlement Mode to internationalize RMB, through which trade exchange-rate risk and the costs of exchange of the importers and exporters and the shrink of foreign exchange reserves reduced.In recent years, with the Trade Settlement Mode progresses, the amount of RMB in cross-border trade settlement continues to expand, however, some negative issues occurred such as the imbalance of RMB cross-border trade settlement and the circuitous loans of the offshore markets. The imbalance of RMB cross-border trade settlement will result in the continuing growth of the foreign exchange reserves, which is contrary to the original intention of the internationalization of RMB. The RMB offshore market circuitous loans will reduce the effect of RMB back of the offshore market and is not conducive to promoting the internationalization of the RMB.This paper argues that the selection of the modes of RMB internationalization should not only consider China’s basic national conditions but also consider whether the selected mode is conducive to the realization of national interests. Through comparative analysis, this paper points out:Although the choice of the Trade Settlement Mode is based on China’s basic national conditions of choice, but in long term the Capital Output Mode is more conducive to the realization of national interests of our country than Trade Settlement Mode. Therefore, China should formulate relevant policies to encourage the export of capital of RMB, especially direct investment to emerging market countries, and gradually formed to "Capital Output&Trade Settlement" double track mode of RMB internationalization to reduce the negative issues under Trade Settlement Mode and to maximize the national interests.