Chapter1 Internationalization Index of Renminbi 1
1.1 RMB internationalization index and its principles 1
1.1.1 Internationalization of the RMB 1
1.1.2 The definition of RMB internationalization index 2
1.1.3 The pu rpose of the compilation of RMB internationalization index 2
1.2 The compilation principles of RMB internationalization index 3
1.3 The compilation method of RMB internationalization index 5
1.3.1 Indicator system 5
1.3.2 The source and processing of data 8
1.3.3 The model of RMB internationalization index 11
1.3.4 The implication of RMB internationalization index 12
1.4 The level of RMB internationalization since 2010 12
1.4.1 The performance 0f RMB internationalization index 12
1.4.2 The analysis 0f the variation of RMB internationalization index 13
1.5 Comparisons among internationalization index of major currencies 15
Chapter2 Current Situation of RMB Internationalization 17
2.1 RMB cross-border trade settlement 18
2.1.1 Characters of RMB cross-border trade settlement 18
2.1.2 Comparison of international trade settlement currencies 22
2.2 RMB transactions in international financial market 25
2.2.1 Foreign exchange market 26
2.2.2 Stock market 28
2.2.3 Derivative market 29
2.2.4 Overseas credit market 31
2.2.5 International bond and bill market 32
2.2.6 Offshore financial market 35
2.3 The current situation of direct investment and securities investment 38
2.3.1 RMB overseas direct investment 38
2.3.2 RMB foreign di rect investment 39
2.3.3 Foreign-invested RMB financial assets 39
2.4 RMB swap by monetary authorities 40
2.5 RMB in global foreign exchange reserves 42
2.6 Exchange rate of RMB 43
2.6.1 RMB exchange rate system 43
2.6.2 RMB exchange rate 45
2.7 Current situation of China’s capital account openness 50
Chapter3 Important Incidents and Their Influences 56
3.1 Realize overall cross-border trade settled in Renminbi 56
3.1.1 Ever expanding scope of cross-border trade settled in Renminbi 56
3.1.2 Ever increasing content and amount of Renminbi settlement of cross-border trade 57
3.1.3 Analysis of the influences 59
3.2 Start experiment units of cross-border Renminbi capital flow 62
3.2.1 Secu rity trade in capital market 62
3.2.2 Renminbi direct investment 65
3.3 Renminbi prepares to serve as reserve currency 67
3.3.1 Sign cu rrency exchange agreements with foreign countries 68
3.3.2 Foreign governmental institutions start to pay attention to Renminbi 71
3.4 Building Hong Kong offshore Renminbi market 74
3.4.1 Signing and revising of Clearing Ag reement 75
3.4.2 central government supports Hong Kong to be Renminbi offshore financial center 76
3.4.3 Finance service and market innovation 77
3.4.4 Existing problems and prospect forecast 81
Special column 3-1 Hong Kong and Shanghai：competition and cooperation 83
Special column 3-2 Deviation between CNH and CNY 86
3.5 Foreign exchange trade with smal l currency is developing 88
3.5.1 Small currencies traded over the counter are increasing 88
3.5.2 Start experimental units of small cu rrency interbank regional market 90
3.5.3 Analysis of the influences 90
Chapter4 Annual Hot Issues on the Internationalization of Renminbi 93
4.1 Does the international ization of RMB require the continuous expected appreciation of RMB？ 93
4.1.1 The pressu re of RMB appreciation is the result of superposition from many factors 94
4.1.2 RMB continuous appreciation may endanger its internationalization process 95
4.1.3 The value of RMB should be maintained within the equilibrium level in the long term 96
4.2 Does it necessary to open a publ ic capital account as the prerequisite of RMB internationalization？ 98
4.2.1 The liberalization of capital account is a gradual process 98
4.2.2 RMB internationalization and capital account liberalization are complimenting 100
4.2.3 The liberalization process of capital account 103
4.3 What is the need of building Hong Kong offshore RMB market？ 106
4.3.1 Hong Kong’s offshore RMB market background 106
4.3.2 Attempt in having a way out from“USD Trap” 108
4.3.3 RMB offshore market’s risk 110
4.3.4 Crisis or opportunity 113
Chapter5 Historical Opportunities of the Internationalization of Renminbi 115
5.1 The continuous growth of China’s total economy and foreign trade scale 115
5.1.1 The strength of economy is the premise of its currency’s internalization process 115
5.1.2 The internationalization of currency is the objective need of international trade 116
5.2 Most developed countries in the western world have fallen into economic recession 118
5.2.1 America has enforced two rounds of quantitative easing but gets little effect 118
Special column 5-1 USA：From subprime crisis to economic crisis 121
5.2.2 European sovereign debt crisis intensified 124
Special column 5-2 How the debt crisis spread to the entire Euro Zone 126
5.2.3 The expose of drawbacks of the economic model in Europe and the United States 127
5.3 The promotion of the emerging countries’economies has pushed the reform of international monetary system 128
5.3.1 BRICs have become an important force in the world economy 129
5.3.2 BRICs have gained more power in the international monetary financial system 132
5.4 The large scale of foreign exchange reserve has built the credit foundation of internationalization of Renminbi 134
Special column 5-3 Controversial ways of using foreign exchange reserves 136
5.5 The inclusiveness spirit in the Chinese culture 137
Special column 5-4 Jungle principle of western countries and the Confucian principle of China 138
Special column 5-5 Cultural reflection on Japan’s history 143
Chapter6 Challenges of the Internationalization of Renminbi 145
6.1 Imbalances in the model of economic development and economic structure 146
6.1.1 China is a country with large trading scale rather than a powerful trade nation 147
6.1.2 Economic structu re imbalance 148
6.1.3 Weak technical innovation 149
6.2 Vulnerability of the domestic financial system 151
6.2.1 The financial model has a strong dependence on the government 152
6.2.2 The financial system is at the low level of marketization 155
6.2.3 Excessive monetization of economy 157
6.2.4 Monetary policy lacks independence 158
6.2.5 Pressu re of being replaced by the offshore Renminbi market 160
6.3 Severe external economic environment 162
6.3.1 The“inertia”in the international monetary system 162
6.3.2 Speculative risk of the outflow of Renminbi 165
Chapter7 Conclusions and Suggestions 168
7.1 Major Conclusions 168
7.2 Long-term strategies of the international ization of Renminbi 170
7.3 Short-term strategies of the international ization of Renminbi 171
Appendix 1 A Summary of Views：An Interpretation of Internationalization of the RMB 175
Appendix 2 Review of the Internationalization of World’s Major Currencies 207
Appendix 3 RMB Cross-border Business Innovation of the Bank of Communications 225
Appendix 4 RMB Internationalization Chronicle 236
References 250