Understanding the Internationalization of the Renminbi
In response to the Great Recession since 2007 that exposed the weaknesses of a dollar-centered international currency system, China started to take measures to internationalize its currency, the renminbi. Against the backdrop of China’s fast economic growth, renminbi internationalization naturally caught the attention of the financial community and academic circles. This chapter addresses itself to three aspects of renminbi internationalization—why China wants to internationalize its currency, how China goes about doing it, and how far renminbi internationalization can go. The chapter concludes that the success of renminbi internationalization hinges upon whether China can effectively reform its financial sector, a “high ground” China’s politico-economic system is based upon.