The internationalization of RMB can establish an international trade system for RMB settlement, enhance China's international status and increase international game tools. However, the export orientation, the dominant international market size and the construction of international financial supervision system also affect the internationalization of RMB.
1. With the internationalization of RMB, a trading system settled in RMB can be established to facilitate enterprises or individuals to conduct overseas transactions.
However, this requires a large domestic market in China and a large international market dominated by China. .
(1) China, like Germany and Japan, is an export-oriented country. Even if it goes out through international aid and loans, it will still earn back in export trade.
(2) The reason why the Swiss franc can't be internationalized is that the Swiss economy is too small, and the currency flowing out is much larger than the domestic economy can carry. Once the Swiss franc returns, the impact on the Swiss economy is unbearable.
2. The internationalization of RMB will make China increase monetary instruments in the game between countries, but it needs to match its international status and effective international financial supervision system.
(1) The United States can monitor and control the flow of dollars internationally. However, the RMB has not yet established a global regulatory system. During the Southeast Asian financial crisis, Thailand did not monitor that Soros had borrowed a lot of Thai baht, so it could not be controlled in advance.
(2) Internationalization of RMB will lead to two RMB exchange rate systems: the RMB exchange rate set by China Administration of Foreign Exchange and China financial market, and the exchange rate in overseas RMB trading market. The latter will amplify the trading volume through financial derivatives and other tools, which will lead to the transfer of RMB pricing power from China to foreign countries and the decrease of China's exchange rate controllability.
The content of this article comes from: The New Encyclopedia of Financial Law (Fifth Edition) edited by China Law Publishing House.