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.

The European Council on Foreign Relations does not take collective positions. This paper, like all publications of the European Council on Foreign Relations, represents only the views of its authors.

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