Research On RMB Regionalization In Central Asia

Since the outbreak of the international financial crisis in2008, as the Chinese government introduced a series of policies, RMB internationalization process has developed rapidly, the international community’s recognition of the RMB has raised gradually. The five Central Asian countries is China’s important neighbors and partners, Central Asia is also the focus of competition among great powers. So Strengthening monetary and financial cooperation with Central Asian countries and promote RMB regionalization in Central Asia seems quite necessary. Implementation of cross-border trade and investment in the use of RMB can reduce the exchange rate risk among Chinese and foreign enterprises. It can deepen economic ties between China and Central Asian countries, but also enhance China’s influence in this region.From the point of view of existing conditions, the economic cycles of China and Central Asian countries have slightly higher consistency, so the cost of promoting RMB regionalization seems low. The rising trade association degree also provides a strong trade power for RMB regionalization. Meanwhile, China’s growing economic strength will get a greater impact in Central Asia, It will provide strong support for the use and circulation of RMB in this region. In addition, the cooperation mechanisms such as the Shanghai Cooperation Organization provide important platforms for financial and monetary cooperation between China and Central Asian countries. Although there are still many weaknesses and challenges, in the long term, the prospect of RMB regionalization in Central Asia is optimistic.RMB regionalization in Central Asia is still in its infancy, in recent years, with the deepening of financial cooperation and developing of financial innovation, Cross-border RMB business between China and Central Asian countries is developing rapidly, RMB settlement amount of cross-border trade and investment increased every year, RMB regionalization trend seems more obvious. For the deficiencies in the RMB regionalization process, this paper argues that the government should promote the RMB capital in output, accelerate the establishment of the free trade area and establish a sound RMB return mechanism.