China’s growing economic standing suggests a power shift for the twenty-first-century global economy, as exemplified through the internationalization of China’s currency, the renminbi (RMB). RMB internationalization can fill China’s financial integration gap by promoting faster internal financial reforms, stronger interconnectivity between trade and finance, and greater economic responsibility. The authors of the first instalment of the 2014 Jr. Fellows policy brief series argue that since RMB internationalization is still in the infancy stage, the Group of Twenty (G20) should play a globally active role in guiding the process in the years to come. It should view RMB internationalization as an opportunity to benefit both China and the other major economies. They conclude that G20 members should take immediate action to increase the number of currency swap agreements and trading hubs, encourage greater RMB international usage and strengthen global financial institutional reforms in order to sustain a stable financial system. Greater involvement by the G20 in the RMB internationalization process will help underpin the financial multipolarity present in the world today.
Power Shift and Renminbi Internationalization: Recommendations for the G20
CIGI Jr. Fellows Policy Brief No. 12