Revisiting the Internationalization of the Yuan
Abstractï»¿As the worldâ€™s second largest economy, largest trading nation, and the largest foreign holder of United States (US) government bonds, the Peopleâ€™s Republic of China (PRC) needs a currency with international status that can match its economic status in the global economy. However, sequencing is important. Before the internationalization of the yuan can make meaningful progress, necessary conditions, such as the existence of deep and liquid financial markets, a flexible exchange rate and interest rates responsive to market conditions must be created. The process of yuan internationalization essentially is a process of capital account liberalization. Due to the unprecedented and complex global financial crisis and the PRCâ€™s huge imbalances, capital account liberalization has to be pursued in a cautious way. As a result, the internationalization of the yuan is bound to be a long-drawn process. The PRCâ€™s road map for the internationalization of the yuan is flawed with many missing links and wishful thinking. Yuan internationalization guided by the current road map may be proven counterproductive.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 23311.
Date of creation: Jul 2012
Date of revision:
Contact details of provider:
Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
Web page: http://www.eaber.org
More information through EDIRC
Yuan; internationalization; China; PRC; currency; international status; financial markets; exchange rate; capital account;
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Cheung, Yin-Wong, 2014.
"The Role of Offshore Financial Centers in the Process of Renminbi Internationalization,"
ADBI Working Papers
472, Asian Development Bank Institute.
- Yin-Wong Cheung, 2014. "The Role of Offshore Financial Centers in the Process of Renminbi Internationalization," Macroeconomics Working Papers 24049, East Asian Bureau of Economic Research.
- Yin-Wong Cheung, 2014. "The Role of Offshore Financial Centers in the Process of Renminbi Internationalization," Finance Working Papers 24049, East Asian Bureau of Economic Research.
- Subacchi, Paola, 2013. "Expanding Beyond Borders: The Yen and the Yuan," ADBI Working Papers 450, Asian Development Bank Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shiro Armstrong).
If references are entirely missing, you can add them using this form.