The Impact of "Belt and Road" Initiative on the Internationalization of Chinese Renminbi

Abstract

President Xi proposed building the Silk Road Economic Belt and 21st-Century Maritime Silk Road, which became known as the “Belt and Road” Initiative. In 2016, the RMB (Chinese currency) officially joined the SDR (Special Drawing Rights), and the RMB’s entry is the integration of the Chinese economy into the global financial system. The internationalization of the RMB is the need for the development of global economic integration and the development of China’s international trade. This “initiative” provides strong support for the internationalization of the RMB. Besides, how to achieve balance in maintaining the country’s economic stability and promoting currency internationalization has always been a difficult issue faced by Chinese monetary authorities when the issue of “big country with small currency” presented. Based on the theory of internationalization of currency, this paper discusses the mutual promotion between RMB's internationalization and the "Belt and Road" initiative, the role of the "Belt and Road" Initiative as a driving force to RMB’s Internationalization.