Research On The Monetary Cooperation And Conflict Between The Internationalization Of RMB And US Dollar Hegemony

This paper is based on theoretical analysis and logical reasoning. Through theoretical analysis, it explains the realistic foundation of the existence of the conflict between the internationalization of the RMB and the U.S Dollar: There are potential conflicts between the benefit growth on the international process and the potential benefits reducing of the Dollar. Base on the international monetary policy coordination theory and the game model of monetary policy in China and the United States, this paper has found the support in practice and monetary policy.Through the demonstration on game model, this paper finds that the size of the international monetary gain is related to discount factor-patience of gamers. To get more international monetary gain, you should have enough patience. If both gamers have the same patience, China and the United States will share the international monetary gains, and the income should be almost equal. China should take appropriate strategies for cooperation, not always chooses passive adjustment, when RMB faces the clampdown from the Dollar Privilege. This paper also finds that Stackelberg Leadership Model improve the loss of gamers. If RMB want to achieve international goals, China should not only consummate it’s financial market, but also reform it’s economic system. Moreover, China should abandon the Follower mode and participate in international financial cooperation initiativily. Monetary policy cooperation between China and the United States is the best win-win solution.