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Renminbi's Potential to Become a Global Currency

Author

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  • Friedrich Wu
  • Rongfang Pan
  • Di Wang

Abstract

This paper is a tentative endeavor to delineate the potential of the renminbi to become a global currency. It first analyzes the critical economic, financial and policy attributes that are required to support a currency to gain an international role. It then examines whether China has the potential to acquire these attributes. The paper concludes by offering some provisional observations on the implications for Asia and the global economy, should the renminbi evolve into a world currency in the coming decades.

Suggested Citation

  • Friedrich Wu & Rongfang Pan & Di Wang, 2010. "Renminbi's Potential to Become a Global Currency," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(1), pages 63-81, January.
    • Handle: RePEc:bla:chinae:v:18:y:2010:i:1:p:63-81
    DOI: 10.1111/j.1749-124X.2010.01181.x
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    References listed on IDEAS

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    1. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-1025, July.
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    3. Menzie Chinn & Jeffrey A. Frankel, 2007. "Will the Euro Eventually Surpass the Dollar as Leading International Reserve Currency?," NBER Chapters, in: G7 Current Account Imbalances: Sustainability and Adjustment, pages 283-338, National Bureau of Economic Research, Inc.
    4. Dobson, Wendy & Masson, Paul R., 2009. "Will the renminbi become a world currency?," China Economic Review, Elsevier, vol. 20(1), pages 124-135, March.
    5. Richard N. Cooper, 2009. "The Future of the Dollar," Policy Briefs PB09-21, Peterson Institute for International Economics.
    6. World Bank, 2008. "World Development Indicators 2008," World Bank Publications - Books, The World Bank Group, number 28241, December.
    7. Fred Hu, 2008. "The Role of the Renminbi in the World Economy," Cato Journal, Cato Journal, Cato Institute, vol. 28(2), pages 219-224, Winter.
    8. World Bank, 2008. "World Development Indicators 2008," World Bank Publications - Books, The World Bank Group, number 11855, December.
    9. Ms. Kazuko Shirono, 2009. "Yen Bloc or Yuan Bloc: An Analysis of Currency Arrangements in East Asia," IMF Working Papers 2009/003, International Monetary Fund.
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    Citations

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    Cited by:

    1. World Bank & the People’s Republic of China Development Research Center of the State Council, 2013. "China 2030 : Building a Modern, Harmonious, and Creative Society," World Bank Publications - Books, The World Bank Group, number 12925, December.
    2. Reiss, Daniel Gersten, 2014. "Invoice Currency in Brazil," MPRA Paper 59412, University Library of Munich, Germany.
    3. World Bank & P.R.C. Development Research Center of the State Council, 2012. "China 2030 : Building a Modern, Harmonious, and Creative High-Income Society [pre-publication version]," World Bank Publications - Books, The World Bank Group, number 6057, December.
    4. Keddad, Benjamin, 2019. "How do the Renminbi and other East Asian currencies co-move?," Journal of International Money and Finance, Elsevier, vol. 91(C), pages 49-70.
    5. Hyoung-kyu Chey, 2013. "The Concepts, Consequences, and Determinants of Currency Internationalization," GRIPS Discussion Papers 13-03, National Graduate Institute for Policy Studies.
    6. Ho, Kin-Yip & Shi, Yanlin & Zhang, Zhaoyong, 2018. "Public information arrival, price discovery and dynamic correlations in the Chinese renminbi markets," The North American Journal of Economics and Finance, Elsevier, vol. 46(C), pages 168-186.
    7. Chee-Heong Quah & Patrick M. Crowley, 2012. "China and the Dollar: An Optimum Currency Area View," Prague Economic Papers, Prague University of Economics and Business, vol. 2012(4), pages 391-411.
    8. repec:prg:jnlpep:v:2013:y:2013:i:4:id:431:p:391-411 is not listed on IDEAS
    9. Hyoung-kyu Chey, 2014. "A Demand-Side Analysis of Renminbi Internationalisation: The Renminbi in South Korea," GRIPS Discussion Papers 14-02, National Graduate Institute for Policy Studies.
    10. Daniel Gersten Reiss, 2015. "Invoice currency: Puzzling evidence and new questions from Brazil," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 16(2), pages 206-225.
    11. Yang-Chao Wang & Jui-Jung Tsai & Qiaoqiao Li, 2017. "Policy Impact on the Chinese Stock Market: From the 1994 Bailout Policies to the 2015 Shanghai-Hong Kong Stock Connect," IJFS, MDPI, vol. 5(1), pages 1-19, January.
    12. Menzie Chinn, 2015. "Emerging Market Economies and the Next Reserve Currencies," Open Economies Review, Springer, vol. 26(1), pages 155-174, February.
    13. Hyoung-kyu Chey, 2015. "Renminbi in Ordinary Economies: A Demand-side Study of Currency Globalization," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 23(3), pages 1-21, May.

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