Study On Practical Paths And Policies Of RMB Internationalization

With the deepening of globalization, every country has been faced up with developing opportunities as well as great challenges. On the one hand, globalization accelerates capital flow across the world and deepens resources allocation; on the other hand, it also causes the crisis and even contributes to financial contagion.Moreover, current international monetary system which is US dollar-centered has exposed the inherent flaws since the2008global financial crisis. Reserve currency diversification has become the consensus of the international community.As for China, the reform and opening-up policy has been carried out for over30years. According to the2010GDP data released by Japan, China has become the world’s second largest economy with remarkable economic strength and voice that should not be ignored on the stage, however, RMB has not yet established its international status. In this context, RMB internationalization has become the consensus among most scholars and a hot topic in the appeal of the improving the international monetary system. Based on high GDP and huge foreign exchange reserves, China has had the basic conditions to promote RMB internationalization, especially when financial market and foreign trade has rapidly improved in recent years. However, RMB internationalization will not be easy because of the history of current international monetary system and relatively closed financial system in our country. RMB internationalization would not happen overnight. Therefore, the author attaches greater importance to practical paths, which means we should keep pace with times and transfer research focus to practical paths and specific measures of implementation.This paper circles around function-evolving path of RMB internationalization and analyzes its practical policies, including RMB cross-border trade settlement, RMB offshore market construction in Hong Kong, currency swap agreements and RMB offshore direct transactions, in which, a detailed analysis of first two items is followed by the statement of currency swap agreements and RMB offshore direct transactions, that are more and more popular in recent years. Finally, based on the above analysis, personal opinions and policy suggestions are proposed to promote RMB internationalization. The paper is divided into seven chapters:Chapter Ⅰ.This part mainly elaborates writing background and significance of this article, literature review, writing content and methods, innovation. Literature section is divided into foreign and domestic literature and sorts out the study about RMB internationalization.Chapter Ⅱ. Theory of RMB internationalization and outline of the practical paths. This chapter briefly discusses the relevant theories like Optimal Currency Area and Grassman Law and the existing practical paths of RMB internationalization.Chapter Ⅲ. Development of RMB cross-border trade settlement. This chapter elaborates status quo of RMB cross-border trade settlement and main problems.Chapter Ⅳ. Development of RMB offshore market in Hong Kong. This chapter analyzes current development of RMB offshore market from multiple perspectives.Chapter Ⅴ. Other practices of RMB internationalization. This chapter discusses the latest progressof currency swaps and RMB offshore direct transactions.ChapterⅥ. Opinions and suggestions to promote RMB internationalization.Finally, this paper makes a summary of the full-text content and views, and look forward to the possible future changes of RMB internationalization in the last paragraph.