China’s Monetary Ambitions: RMB Internationalization in Comparative Perspective

Abstract

What is the political process of China's move to internationalize its home cur-rency? How different is Chinese RMB internationalization from the currency internationalization of other great powers? What is the international destiny of the RMB? By addressing such questions, this study challenges three prevailing views of RMB internationalization: realist determinism, American exceptionalism, and liberal hype. This article argues that a feedback model can be useful for our understanding of the process timing and direction of RMB internationalization. This study also identifies key similarities and differences among Germany of the 1930s, the United States of the 1960s, and today's China in their currency internationalization. This comparison will reveal important structural factors that may contribute to a slow path to full RMB internationalization, and the emergence of the hybrid model of China-centered monetary order in the East Asian region. his study seeks to address the process, nature, and prospect of renminbi (or RMB) internationalization. 1 What is the origin and process of China's move to internationalize its home currency? How different (or similar) is RMB internationalization from the currency internationalization of interwar Germany and postwar America? What is the international destiny of the RMB? By addressing these questions, this study challenges three prominent views of RMB internationalization: realist determinism, American exceptionalism, and liberal hype. Structural realists tend to claim the inevitability of RMB internationaliza-tion, as a rising power will seek to extend the influence of its currency abroad. The American exceptionalism view implies that as a beacon for the liberal international monetary order, postwar America adopted unique approaches to its currency internationalization, distinguishing itself from other great powers such as T