The Study On The Internationalization Of RMB

With the development of globalization and30-years’ high-speed growth of China’s GDP, Renminbi is becoming more influential in global market. After the recent financial crisis, given that US dollar depreciates drastically and that Euro zone is haunted by sovereignty debt, the motion of reformation of currency system gains support widely. As part of emerging market, China has made an example in face of financial crisis, and presents strong growth in GDP, trade volume, and currency value. Hence it’s considered to play a more significant role in international financial system.First, the author reflects on related thesis on the globalization of currencies and concludes the preceding theoretical and practical experience. Then the author summarizes present situation concerning the internationalization of RMB, analyzes the advantages and disadvantages about the issue and points out the existing problems. After that, a qualitative and quantitative analysis is performed on the latitude and depth of the internationalization of the Japanese Yen, from three different perspectives-in the invoicing of international trade, as an international reserve currency as well as its role in the global financial market.Based on the experience of the Japanese Yen, the author compares the deterministic factors of Renminbi with the Japanese Yen, and identifies that the RMB will be faced with more difficulties in terms of the invoicing in the international trade. Besides, there is a great restriction on the internationalization of RMB with regard to the openess of financial system, the stability of inflation and exchange rate, etc. Whether the internationalization of RMB will be accelerated will be decided by the reforms of the capital market and financial system. Finally, the author gives some suggestions about the internationalization of RMB.