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The internationalisation path of the renminbi. Bruegel Working Paper 2012/05, 13 March 2012

Vallée., Shahin (2012) The internationalisation path of the renminbi. Bruegel Working Paper 2012/05, 13 March 2012. [Working Paper]

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    Abstract

    As China’s economic might grows, its standing and that of its currency in the international monetary system become increasingly pressing issues. The crisis seems to have reminded the Chinese authorities of the dangers of a unipolar monetary system, and they have therefore accelerated their plans to internationalise the renminbi (RMB). The goal of this internationalisation strategy is not clear and China has not defined publicly the monetary system it aims to achieve. Nevertheless, there are more and more signs that the internationalisation of the RMB is progressing, notwithstanding major challenges. Conventional wisdom and the majority of the literature posits that the RMB will not succeed in its internationalisation process until China fully opens its capital and financial accounts, makes its exchange rate flexible and liberalises its financial sector. These three obstacles are real but circumventable. However, if China's internationalisation strategy follows a path that concentrates on overcoming immediate challenges in order to raise the status of the RMB to that of a second-tier world currency, the Chinese authorities will still have to undertake substantial reforms if they intend to place the RMB on a footing comparable to the dollar or the euro.

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    Item Type: Working Paper
    Subjects for non-EU documents: EU policies and themes > External relations > international economy
    Countries > China
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Bruegel (Brussels) > Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 19 Mar 2012 09:44
    Number of Pages: 40
    Last Modified: 19 Mar 2012 09:44
    URI: http://aei.pitt.edu/id/eprint/34041

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