A study of the internationalization of the Chinese renminbi: to access its risks
Translated title
A study of the internationalization of the Chinese renminbi
Author
Wang, Youran
Term
4. term
Publication year
2018
Submitted on
2018-05-18
Pages
71
Abstract
Siden 2009 har Kina aktivt søgt at internationalisere renminbien (RMB), bl.a. gennem liberalisering af handel og investeringer, etablering af offshore-markeder og betalingsinfrastruktur samt RMB’s optagelse i IMF’s SDR-kurv i 2016. Efter et fald i den globale brug af RMB i 2015–2016, forværret af kapitalrestriktioner og devalueringsfrygt, ses der fra slutningen af 2017 tegn på genopblusset grænseoverskridende anvendelse, understøttet af initiativer som Bælte-og-Vej, CIPS og Hongkong som offshore-knudepunkt samt finansiel teknologi. Denne afhandling undersøger de potentielle risici i RMB-internationaliseringen. Med udgangspunkt i en teoretisk ramme (Mundell–Fleming-trilemmaet, teorier om valutasubstitution og valutamismatch samt finansiel risiko og smitte) kombineres en empirisk gennemgang af udviklingen i RMB-handelsafvikling, offshore-markeder, valutabytteaftaler, RMB’s rolle som værdilager og valutakursreformer i perioden 2009–2018 (med fokus på de seneste tre år) med en historisk analyse af yenens internationalisering for at udlede læring. Analysen peger på fire hovedudfordringer: begrænset pengepolitisk autonomi, spekulative angreb og kapitalflugt, valutamismatch i balancer og bredere økonomisk ustabilitet. Afhandlingen afslutter med risikostyringsperspektiver og politiske anbefalinger med henblik på at afbøde disse risici.
Since 2009, China has pursued the internationalization of the renminbi (RMB) through trade and investment liberalization, the development of offshore markets and payment infrastructure, and the RMB’s inclusion in the IMF’s SDR basket in 2016. After a decline in global RMB use in 2015–2016, driven by capital controls and devaluation concerns, cross-border usage began to expand again from late 2017, supported by initiatives such as the Belt and Road, CIPS, Hong Kong’s role as an offshore hub, and financial technology. This thesis examines the potential risks inherent in RMB internationalization. Using a theoretical framework (the Mundell–Fleming trilemma, currency substitution, currency mismatch, and financial risk and contagion) and an empirical review of developments in RMB trade settlement, offshore markets, currency swap arrangements, the RMB’s role as a store of value, and exchange rate reforms from 2009 to 2018 (with emphasis on the last three years), it also draws lessons from Japan’s attempt to internationalize the yen. The analysis identifies four main challenges: reduced monetary policy autonomy, speculative pressures and capital flight, currency mismatches on balance sheets, and broader economic instability. The thesis concludes with risk management approaches and policy recommendations to mitigate these risks.
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