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Renminbi internationalization as a response to the global imbalance

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  • Yuning Gao
  • D’Maris Coffman

Abstract

The build-up of huge foreign exchange reserve makes China a net creditor and also brings in significant challenges to the Chinese economy. Considering the internationalization of the renminbi as China’s response to the global imbalance, this paper analyzes the effect of renminbi internationalization on the formation of reserves and compares its benefits and costs in rebalancing China’s external position with those of outward direct investment. It assesses the current progress in the practice of using the renminbi in cross-border trade settlement and in the development of the offshore renminbi market. It further examines the possibility of the renminbi serving as a global reserve currency in the future.

Suggested Citation

  • Yuning Gao & D’Maris Coffman, 2013. "Renminbi internationalization as a response to the global imbalance," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 11(2), pages 139-151, May.
    • Handle: RePEc:taf:jocebs:v:11:y:2013:i:2:p:139-151
    DOI: 10.1080/14765284.2013.789683
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    1. Maurice Obstfeld & Kenneth Rogoff, 2007. "The Unsustainable US Current Account Position Revisited," NBER Chapters, in: G7 Current Account Imbalances: Sustainability and Adjustment, pages 339-376, National Bureau of Economic Research, Inc.
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    3. World Bank, 2011. "Global Development Horizons 2011 : Multipolarity - The New Global Economy," World Bank Publications - Books, The World Bank Group, number 2313.
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    Cited by:

    1. Rubini, Lauretta & Pollio, Chiara & Spigarelli, Francesca & Lv, Ping, 2021. "Regional social context and FDI. An empirical investigation on Chinese acquisitions in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 402-415.
    2. Löchel, H. & Packham, N. & Walisch, F., 2016. "Determinants of the onshore and offshore Chinese government yield curves," Pacific-Basin Finance Journal, Elsevier, vol. 36(C), pages 77-93.
    3. Loechel, Horst & Packham, Natalie & Walisch, Fabian, 2013. "Determinants of the onshore and offshore Chinese Government yield curves," Frankfurt School - Working Paper Series 202, Frankfurt School of Finance and Management.

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