The Factors Of RMB Internationalization

On October 1,2016,the RMB was formally included in the Special Drawing Rights Basket(SDR)by the International Monetary Fund(IMF).This event is not only an important part of the internationalization of the RMB,but it is also a recognition of the country's comprehensive national strength and development level as well as the international use of the RMB.However,due to various factors,after joining the SDR,the internationalization of the RMB did not make major breakthroughs as expected by all parties,even to a certain extent,there has been a downward trend.In October 2017,the international payment of RMB fell from sixth place to seventh place(by amount),the share was only 1.46%,far lower than the RMB international payment status of the same period two years ago(fifth place,share 1.92%).Moreover,the RMB is still at a relatively low level in the international monetary system,which is obviously inconsistent with China's current role in the global economy,trade,and investment.Therefore,it is necessary to analyze the main influencing factors of RMB internationalization,and to study the factors that affect the internationalization of RMB before and after the SDR and the degree of influence.The main contents of this paper are:To sort out and evaluate the process of the mainstreaming of the RMB internationalization index in the industry and academia,and then to select a more authoritative and scientific indicator for the internationalization of the RMB to lay the foundation for further empirical analysis.Through comprehensive considerations,the RMB international payment market share(GMS),cross-border RMB index(CRI)and offshore RMB index(ORI)are selected as proxy indicators for RMB internationalization.Secondly,with the help of relevant indicators,we have conducted a practical analysis of the scale of RMB internationalization and the trend of RMB internationalization.We draw the conclusions that the level of RMB internationalization will fluctuate and decline in the short term,but it will not hinder the long-term development trend.The empirical analysis of the influencing factors of the RMB internationalization is divided into three aspects.First,the three long-term equilibrium relationships between the RMB and the influencing factors are studied in conjunction with the selected three indicators of the RMB internationalization agency.Second,the event of RMB joining the SDR is conducted.The analysis was conducted to examine its role in the internationalization of the RMB and the changes in the influencing factors before and after the RMB's participation in the SDR.Third,the VAR model was used to study the dynamic relationship between RMB internationalization and various factors and the future level of RMB internationalization.The main conclusions of this paper are:In the long run,economic strength,currency stability,and currency profitability all play a role in the internationalization of the RMB,affecting the process of internationalization of the RMB;after the RMB joins the SDR currency basket,the influencing factors have changed.The impact of the increase in economic strength on the internationalization of the RMB has decreased significantly.Both the proportion of GDP and the change in the proportion of trade have no significant effect on the RMB internationalization index.The increase in the stability of the value of the currency measured by the exchange rate volatility is prior to joining the SDR,the internationalization of the RMB was facilitated,and the stability of the RMB after joining the SDR became an obstacle to internationalization.Dynamic analysis revealed that there is a certain inertia in the internationalization process of the RMB,and the internationalization level in the previous period has implications for the future process.Significant influence.In the coming period,the level of RMB internationalization will continue to increase,but its speed may slow down.