The Degree of Internationalization of the RMB: a Progress Report Based on a Review

This article questions the degree of internationalization of the RMB, by providing an assessment through a review of literature. The article gives major results. Even if the success of reforms in the short term and some progress in international currency' functions are recognised, some obstacles exist that dampen internationalization. If they were removed, the share of the RMB for example in international reserves could be around 10%. The economic size of a country that represents a tipping point of the process around 20% of the global GDP in the case of China is not the sole driver of internationalization: the continued implementation of liberalization reforms is a major challenge for China. This kind of internationalization coexists with an increasing regional influence of China and the RMB. A natural influence on regional trading and financial relations, functions that are more performed at a regional level, and the growing influence of the RMB on Asian exchange rates, call for a regional currency status, which is a specific and less strict type of internationalization. Thus, the form of internationalization of the RMB is today complex.