From Money to RMB-nisation

Abstract

Internationalisation of the renminbi (RMB) did not receive much attention from the financial markets until the late 2000s when China started to promote its currency for international usage ardently.¹ Structural changes in the global economy have emerged to facilitate the rise of the RMB (as discussed in Chapter 1). Despite research on the RMB subject, the motivation for Beijing to push RMB internationalisation (or RMB-nisation, as we shall also call it in this book) has not been well analysed. The financial markets seem to have taken RMB-nisation as given. Academics have mostly put RMB internationalisation in the straitjacket of existing theories and research. But proper understanding of the drivers behind China’s decision to internationalise the yuan is key to gauge the success (or failure) of the steps taken and foresee and assess the next steps down the road.