Dissertation
Dissertation > Economic > Fiscal, monetary > Finance, banking > China's financial,banking > Exchange rate,foreign financial relations

Major Obstacles and Counter Measures of RMB Internationalization

Author WangXiuHong
Tutor ChenXiaoLi
School Shandong University
Course Industrial Engineering
Keywords RMB Internationalization Major obstacles Policies and Measures
CLC F832.6
Type Master's thesis
Year 2011
Downloads 204
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Currency internationalization means a currency is accepted and used as a medium of exchange, unit of account and store of value by countries other than the issuing one.RMB internationalization, is the process during which RMB circulates outside China and accepted commonly by other countries as a pricing, settling and storing currency. Many currencies have been internationalized prior to RMB internationalization. Since 1960s, with the internationalization of Japanese Yen, European currencies’incorporation and the appearance of Euro Dollar, the currency internationalization has caused more and more person’s interests. Some one even takes currency internationalization as "writing bad check" by vivid comparison, However it’s not so easy to make other countries be keen to the "bad check". History has proved that this relies on the "government credit" based on strong political, economic and military power. In recent years, our economy has been developing fast and the opening to the outside world degree has been enhancing gradually. Our legal tender RMB,as the medium of exchange, method of preserve and the payment means, has been more and more commonly used by the surrounding countries and the Hong Kong and Macao territories, Which means the setout of its internationalization.The thesis analyses the current phase, realistic base and disadvantages of RMB internationalization. Based on this, the thesis compares the sameness and difference between foreign and RMB currency internationalization. Then it puts forward the strategy used for the reference of RMB currency internationalization.With China growing into the second largest economy, RMB currency internationalization will improve the strategic position of China in international finance and win more say for China. The promotion of RMB’s internationalization is an unprecedented cause for China, therefore we need to absorb experience from various aspects. With discussion about the currency internationalization of US dollar, Japanese Yen and Euro dollar,the thesis analyzes the obstacle of RMB currency internationalization. Comparing the characteristics of our economy with others,the thesis gives countermeasure and suggestion to RMB free exchange, interest rates liberalization and the optimization of domestic financial system.The innovating point is that instead of just theoretic countermeasure and suggestion more practical measures with high value for realistic reference put forward in the thesis.

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