Title: Size Matters? <i>Renminbi</i> Internationalization and the Beijing Consensus
Abstract: Internationalization of the Renminbi (RMB) has become a new buzzword, leading to various theories about its impact and prospects. “Currency War,” a best seller in China that Chinese leaders have reportedly read, engages in a conspiracy theory depicting how the United States and its investment banks made the US dollar the international reserve currency. Commentators have therefore established that currency internationalization requires strong state action at a critical juncture. The British pound, for example, remained the dominant currency even after the United States replaced the United Kingdom as the biggest economy in the late nineteenth century. Not until after World War II did the United States spend nearly two decades pushing the US dollar to the pinnacle by using the postwar economic conditions in the United Kingdom to its advantage. It has also been argued that the transition to a high-growth economy requires exogenous “accidents and good fortunes” that break the path dependence and institutional equilibrium at a lower level of growth. Interestingly, this sounds very similar to the recent comment of Zou Xiao-chuan, the President of the People's Bank of China (PBoC): “RMB internationalization requires luck and opportunity, and the [recent] global financial crisis is the one.”
Publication Year: 2017
Publication Date: 2017-03-22
Language: en
Type: book-chapter
Indexed In: ['crossref']
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