from a new Book From Cambridge:
In this new book, Zhang Xianwang
“Discusses the global role of the renminbi. After reviewing its economic and trade growth experience, we review the evolution of China’s exchange rate policy after reforms, review the debate on whether the renminbi is overvalued or undervalued, introduce China’s renminbi globalization policy, Describes offshore renminbi transactions, assesses the current global status of the renminbi, and discusses the geopolitical tensions of the past few years. The internationalization of the renminbi since 2009 has been uneven and uneven. Despite strong performance in the early 2010s, However, the renminbi is underrepresented in the global market, and its global role does not match China’s economic strength. The path of renminbi internationalization is affected by China’s economic performance and
geopolitical factors. “
Regarding RMB internationalization, Cheung noted:
After reaching its high point in 2015, the process of RMB globalization has been quite uneven and even reversed in some areas. This change, along with China’s tightening of (administrative) foreign exchange management, financial deleveraging policies, and concurrent increases in global uncertainty and geopolitical tensions have simultaneously reduced global demand for yuan-denominated assets. In addition, the outbreak of the Sino-US trade dispute and the subsequent shift in perception of China are also not conducive to the international use of the yuan. The coronavirus pandemic of 2020 presents another opportunity for China to regain momentum in currency globalization. In the first half of 2020, the epidemic had a greater impact on China; however, with effective public health control measures, China demonstrated its economic resilience at the end of 2020 and 2021.32. The rapid recovery of the economy and the stability of the renminbi have made renminbi-denominated assets more attractive to international investors and increased the global usage of the renminbi.
In the following subsections, we describe China’s main policies to promote RMB internationalization and discuss its outsourcing practice—offshore RMB transactions. China’s renminbi internationalization program addresses and interacts with a wide range of topics. While a comprehensive account of RMB internationalization is beyond the scope of this study, we provide an overview.
resource: Zhang (2022).
Any scholar who wants to understand China’s exchange rate policy must read this book.
My take on previous articles on Chinese currency including Eswar Prasad’s get currency (2015), by Paulo Subacchi people’s money (2017). My point of view Regarding the status of the renminbi relative to the U.S. dollar, it was raised at a recent meeting Board of Governors – New York Fed Meeting.
If the author’s name sounds familiar, he (along with me and Eiji Fujii) co-authored Greater China Economic Integration (2007) (we are updating now), several works on RMB misalignment (recently, Cheung, Chinn and Xin, 2017), exchange rate forecasts (recent Cheung, Chinn, Garcia Pascual, Zhang, 2019), and about China’s import and export (Zhang Qianqian, 2015).
