Renminbi Internationalization: Prospects and Implications for Economic Integration in East Asia
AbstractThis paper argues that renminbi (RMB) internationalization and China's strategic interests in ASEAN will combine to deepen economic integration and pave the way for creating a de facto RMB bloc consisting of the 10 ASEAN countries, China, Hong Kong, and Taiwan—a grouping we call ASEAN+New3. Such a currency bloc is likely to weaken the initiatives of the existing ASEAN+3 (China, Japan, and Korea) for regional monetary-financial cooperation because neither Japan nor can Korea join the new currency bloc for economic and political reasons. This paper also argues that RMB internationalization would delay the resolution of the trade imbalance between East Asia and the United States because China would be pressured by the other members of ASEAN+New3 to maintain stability of the RMB vis-à-vis the U.S. dollar. © 2011 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal Asian Economic Papers.
Volume (Year): 10 (2011)
Issue (Month): 3 (October)
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- Arvind Subramanian & Martin Kessler, 2012.
"The Renminbi Bloc is Here: Asia Down, Rest of the World to Go?,"
Working Paper Series
WP12-19, Peterson Institute for International Economics, revised 2013.
- Subramanian Arvind & Kessler Martin, 2013. "The Renminbi Bloc is Here: Asia Down, Rest of the World to Go?," Journal of Globalization and Development, De Gruyter, vol. 4(1), pages 49-94, August.
- Torsten Ehlers & Frank Packer, 2013. "FX and derivatives markets in emerging economies and the internationalisation of their currencies," BIS Quarterly Review, Bank for International Settlements, December.
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