RMB Internationalization: Exploring Trends and Implications

Abstract

The aim of this paper is to provide a comprehensive analysis of the historical evolution of the internationalisation process of the RMB and to assess its current status in the global economy. At the same time, in light of the evolution of the current international monetary system, especially the key stages of the gold standard, the Bretton Woods system and the Jamaican system, it provides an in-depth exploration of the challenges of the times, such as exchange rate stabilisation and de-dollarisation, faced by the internationalisation of the RMB. The article focuses on the ten milestones of RMB internationalisation, detailing the collaborative efforts and achievements of East Asian economic powers such as ASEAN, China, Japan, and South Korea in promoting the internationalisation of the RMB. These achievements reflect the positive response to external economic developments and highlight the growing importance of the RMB in the international monetary system. The article analyses the positive role of the Belt and Road Initiative in promoting the internationalisation of the RMB. It has facilitated international economic exchanges and cooperation by simplifying the financing process. The article also provides an in-depth analysis of the many factors affecting RMB depreciation, such as trade wars. It reveals the wide-ranging impacts of these factors on various sectors, especially Chinese exporters. Based on this, the article emphasises the significance of preserving the stability of the RMB exchange rate as a crucial factor to be fully considered while advancing the internationalisation of the RMB. Lastly, the article proposes several constructive suggestions to further promote the internationalisation of the RMB, which offer valuable references for the future development of the international monetary system.