The Effectiveness of RMB Internationalization

Abstract

Due to the 2008 economic crisis, the global economic and monetary system requires new blood. Hence the emergence of alternative currencies is inevitable. Based on this situation, this paper will analyze how Macroeconomic policy would influence Renminbi (RMB) being internationalization. In order to explore the result, this paper took "The Belt and Road Policy" as the main case, and after reviewing the international monetary, the research used the SWOT method to analyze RMB. The paper finally found out that China is the second-biggest economy globally, and China has a strong power to control the exchange of RMB; with that, RMB has laid a solid economic foundation and has the potential to be more internationalized. The internationalization of RMB would give more social benefits to China. However, since the internationalization would take so long, some may consider where the opportunity cost could be so high, which makes the internationalization less valuable. It does not affect the Chinese government continues to push the progress of internationalization of the RMB, but it may need longer than the exception. The implication and suggestions are also discussed at the end of this paper.

The Relationship Between RMB Internationalization and Sino-US Trade

“…Similarly, there is a massive argument over how to continue to internationalize the RMB, such as accelerating the construction of the international banking system and continuing to promote trade cooperation with neighboring countries [10]. Indeed, the RMB internationalization will not only boost China's economic development [11], but will also help maintain the international monetary system's stability [12].…”