The Dynamic Mechanism And The Path Choice Of Renminbi Internalization

Since the enactment of reform and opening-up, China’s economy develops rapidly, and stands among the highest in the world. After the financial crisis in 2008, shift changes occur in each country’s comprehensive national strength. World trade and international settlement developed to the direction of diversification. In the same time, international monetary system is undergoing fundamental adjustments. The Chinese government seized this opportunity to accelerate the process of internationalization of the RMB. With the gradual liberalization of the capital account, the status of the yuan and China’s international status does not match, which has caused reflections on what promote the internationalization of RMB and further development path.Firstly, this article reviewed the history of the dollar and drew the enlightenment for China. Then through the analysis of the status of the RMB from eight aspects, we drew the conclusion that the internationalization of RMB was under the transition from the initial stage to the intermediate stage. Meanwhile, this paper analyzed the structure of the Chinese economy and the financial system, there are many problems hindering the development of the internationalization of RMB. Secondly, this paper described the dynamic mechanism of RMB internationalization in depth. The force in the market demand dominated and government force assisted it. It’s the cooperation of the two forces that promote the internationalization of the RMB. Based on the above dynamic mechanism and the experience of the three major international currency, this paper presents the path of the development of RMB internationalization. The RMB internationalization is a lengthy process which requires a phased and orderly manner. It can be divided into three stages which have corresponding characteristics, and each stage should set its goal. Gradually RMB realizes the goals of perimeter, regionalization and internationalization. And from the perspective of international payments, each stage has corresponding renminbi circulation. Finally, from the basic guarantee of RMB, cross-border flow, the international financial markets and risk prevention angle, this article put forward some safeguards.