China Analysis: Redbacks for Greenbacks: internationalising the renminbi

Redbacks for Greenbacks? The internationalisation of the renminbi

The interactions between the Chinese economy and the rest of the world are now huge, but expectations – and hopes – that Beijing would internationalise its currency as its economy converged with others have been frustrated. Why? 

In the latest edition of China Analysis – ‘Redbacks for Greenbacks: The internationalisation of the renminbi’ – published by ECFR and Asia Centre, we look at the debate between Chinese economics experts.

Important trends include:

• China’s monetary and financial policies are underpinned by geopolitical calculations.
   
• China has built a tradition of using money and financial institutions as a tool rather than an end in itself, after a century and a half of being on the losing side of currency conflicts. 
   
• Every year that Beijing keeps capital controls it buys time for China’s hypergrowth, outcompeting other emerging economies and leaving the West to grapple with the difficulties of its open economies.
   
• Chinese economists and geopoliticians hint at the possible disappearance of European economic power, with relish and without apparent regret.