Columbia International Affairs Online: Working Papers

CIAO DATE: 04/2015

Internationalization of the Renminbi: Developments, Problems and Influences

Ming Zhang

March 2015

Centre for International Governance Innovation

Abstract

Due to the 2008-2009 global financial crisis, the Chinese government began to promote renminbi (RMB) internationalization in order to raise its international status, decrease reliance on the US dollar and advance domestic structural reform. This internationalization has achieved progress not only in cross-border trade settlement, but also in the offshore RMB markets. However, the rampant cross-border arbitrage and the relatively slow development of RMB invoicing compared to RMB settlement are becoming increasingly problematic.