Table Of ContentResearch Series on the Chinese Dream
and China’s Development Path
Yuanzheng Cao
Strategies for
Internationalizing
the Renminbi
Research Series on the Chinese Dream
’
and China s Development Path
Project Director
Xie Shouguang, President, Social Sciences Academic Press
Series editors
Li Yang, Vice president, Chinese Academy of Social Sciences, Beijing, China
Li Peilin, Vice president, Chinese Academy of Social Sciences, Beijing, China
Academic Advisors
CaiFang,GaoPeiyong,LiLin,LiQiang,MaHuaide,PanJiahua,PeiChanghong,
Qi Ye, Wang Lei, Wang Ming, Zhang Yuyan, Zheng Yongnian, Zhou Hong
Drawing on a large body of empirical studies done over the last two decades, the
Research Series on the Chinese Dream and China’s Development Path seeks to
provideitsreaderswithin-depthanalysesofthepastandpresent,andforecastsfor
thefuturecourseofChina’sdevelopment.ThankstotheadoptionofSocialismwith
Chinese characteristics, and the implementation of comprehensive reform and
opening, China has made tremendous achievements in areas such as political
reform,economicdevelopment,andsocialconstruction,andismakinggreatstrides
towardstherealizationoftheChinesedreamofnationalrejuvenation.Inadditionto
presenting a detailed account of many of these achievements, the authors also
discusswhatlessonsothercountriescanlearnfromChina’sexperience.Thisseries
willbeaninvaluablecompaniontoeveryresearcherwhoistryingtogainadeeper
understanding of the development model, path and experience unique to China.
More information about this series at http://www.springer.com/series/13571
Yuanzheng Cao
Strategies
for Internationalizing
the Renminbi
123
YuanzhengCao
BOCInternational Research Corporation
Beijing
China
ISSN 2363-6866 ISSN 2363-6874 (electronic)
Research Series onthe ChineseDream andChina’s Development Path
ISBN978-981-13-0799-7 ISBN978-981-13-0800-0 (eBook)
https://doi.org/10.1007/978-981-13-0800-0
JointlypublishedwithSocialSciencesAcademicPress,Beijing,China
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Foreword
A New Historical Starting Point for National Development
AttheendoftheQingDynasty,ChenDanranclaimedthat“Itisimpossibletohave
a good plan for the present without any long-term strategy; it is impossible to
handle the current situation without any overall planning.” The development
strategy of a given country is predicated on plans made in tandem with global,
local, and historically situated contexts, both contemporaneously and over time.
National development strategies must account for scientific projections of the
internal and external environment, major conflicts, opportunities, challenges,
advantages, and disadvantages facing the country’s future development. A good
strategy illuminates both the global and domestic environment and establishes a
top-level plan for the direction, target, path, principles, and policies outlining the
country’s future development. With such a strategy, a country is able to develop
along with the tide of historical progress, seize opportunities as they present
themselves, and to win the initiative, advantages, and the future.
History tells us that properly strategizing is central to a country’s development,
such that any country without adequate strategic planning will find it very difficult
to attain any modicum of global power or success. Successful strategic
decision-making is vital to a country’s ultimate development. History has shown
that the reform and opening-up (改革开放/gǎigé kāifàng) policy has been a sig-
nificant and successful strategy for China, and, furthermore, promises increased
future success.
China’s development now stands at a new starting point. After more than 30
years of reform and opening-up and progressive development, China has bid
farewell to sustenance and entered a new stage of prioritizing self-development.
The existing deep-rooted conflicts and problems associated with 30 years of rapid
economic growth, however, together with the current complicated and volatile
global economy, challenge China on its road to fair and sustainable development.
Since 2008 and the outbreak of the global financial crisis, the global economy
has undergone profound changes. The current global economic pattern is being
v
vi Foreword
ruthlessly torn apart and reshaped by an internationally unbalanced economic
structure and mounting global financial crises. It is difficult to rebalance the world
economy. The task of restructuring the global political and economic order is
staggering and often conflicts with national interests. Doubts as to the ability of
China to overcome the “middle-income trap” and to achieve just, fair, and sus-
tainable development are at the center of global attention.
Ifglobalanddomesticcircumstancesaretobebelieved,thenext5–10yearsare
critical toChina’sdevelopment.Thestrategyundertakenduringthiscritical period
willexertadecisive influenceoverthecountry’sdevelopment inthenext 20to30
years. Therefore, we’ve asked authors to write 20 books for this collection on
China’s development strategy. This particular collection focuses on holistic and
long-termresearchtrends.Twentystrategictopics—coveringtheeconomy,society,
political affairs, culture, diplomacy, national defense, reform, and opening-up, and
more—have been discussed by experts and scholars, who have also provided their
thoughts on actionable and strategic proposals. We expect that this collection of
books will serve as a research reference for national development strategies. This
collection is academic but readable. I believe that readers’ needs will be met.
The authors of this collection are well-known experts and scholars with
long-termmanagementexperienceintheirparticularareasofstudy.Iwouldliketo
express my sincere thanks to all the authors. Thank you for researching and
expressing your findings despite all the other work occupying your time.
DuetothejointeffortsofChina(Hainan)InstituteforReformandDevelopment
(CIRD), Study Press, and Hainan Press, this collection has been successfully
published. I would like to extend my thanks to Study Press and Hainan Press for
their hard work in organizing and editing the essays contained herein.
As the director of the editorial committee, I’ve invited committee members to
closely examine and analyze this collection’s framework, contents, structure, and
style. Each chapter represents the author’s academic findings and opinions. Since
the task is urgent and the collection covers multiple fields, shortcomings are
inevitable and comments and queries are welcome.
October 2012 Chi Fulin
China Institute for Reform
and Development
Series Preface
SinceChina’sreformandopeningbeganin1978,thecountryhascomealongway
on the path of Socialism with Chinese Characteristics, under the leadership of the
Communist Party of China. Over 30 years of reform efforts and sustained spec-
tacular economic growth have turned China into the world’s second largest econ-
omy, and wrought many profound changes in the Chinese society. These
historicallysignificantdevelopmentshavebeengarneringincreasingattentionfrom
scholars, governments, and the general public alike around the world since the
1990s,whenthenewestwaveofChinastudiesbegantogathersteam.Someofthe
hottesttopicshaveincludedtheso-called“Chinamiracle,”“Chinesephenomenon,”
“Chinese experience,” “Chinese path,” and the “Chinese model.” Homegrown
researchershavesoonfollowedsuit.Alreadyhugelyproductive,thisvibrantfieldis
putting out a large number of books each year, with Social Sciences Academic
Press alone having published hundreds of titles on a wide range of subjects.
Because most of these books have been written and published in Chinese,
however,readershiphasbeenlimitedoutsideChina—evenamongmanywhostudy
China—forwhomEnglishisstillthelinguafranca.Thislanguagebarrier hasbeen
animpedimenttoeffortsbyacademia,businesscommunities,andpolicy-makersin
othercountriestoformathoroughunderstandingofcontemporaryChina,ofwhatis
distinct about China’s past and present may mean not only for her future but also
forthefutureoftheworld.Theneedtoremovesuchanimpedimentisbothrealand
urgent, and the Research Series on the Chinese Dream and China’s Development
Path is my answer to the call.
This series features some of the most notable achievements from the last 20
years by scholars in China in a variety of research topics related to reform and
opening. They include both theoretical explorations and empirical studies, and
cover economy, society, politics, law, culture, and ecology, the six areas in which
reform and opening policies have had the deepest impact and farthest-reaching
consequences for the country. Authors for the series have also tried to articulate
their visions of the “Chinese Dream” and how the country can realize it in these
fields and beyond.
vii
viii SeriesPreface
AlloftheeditorsandauthorsfortheResearchSeriesontheChineseDreamand
China’s Development Path are both longtime students of reform and opening and
recognized authorities in their respective academic fields. Their credentials and
expertise lend credibility to these books, each of which having been subject to a
rigorouspeer-reviewprocessfor inclusionintheseries.As part ofthe Reform and
DevelopmentProgramundertheStateAdministrationofPress,Publication,Radio,
Film and Television of the People’s Republic of China, the series is published by
Springer, a Germany-based academic publisher of international repute, and dis-
tributedoverseas.IamconfidentthatitwillhelpfillalacunainstudiesofChinain
the era of reform and opening.
Xie Shouguang
Preface
Two concurrent monetary phenomena currently characterize the world—the
European debt crisis and the internationalization of the RMB. These two phe-
nomena share one common source: the world’s political and economic order,
including the international monetary system, is undergoing unprecedented change.
The current international political and economic order was established after WWII
and consisted, until recently, of three pillars: the first being international political
order as represented by the United Nations, founded on the Yalta Conference; the
secondpillarwasaneconomicorderfoundedontheWTO(theoriginalGATT),the
central goal of which was to liberalize investment and trade; and the third pillar
beingthearrangementoftheUSdollar-centricinternationalmonetaryandfinancial
system, as organized around the Bretton Woods system. The objective basis
ofthesethreepillarshasbeentheestablishmentandsustenanceoftheNorth–South
gap.Morethan70yearsofeconomicdevelopmenthasfollowedtheendofWWII,
and as a result, this objective has shifted over time: In terms of GDP, the North–
South gap has narrowed considerably, and in some cases has even disappeared
altogether. The world’s political and economic order—based on this quickly dis-
appearing North–South gap—has therefore begun to fluctuate, and as a result, the
traditional mechanisms of global governance are becoming destabilized. This
challenge has only one viable choice—establishing a new political and economic
order that better serves the needs of developing countries. China, as the world’s
largest developing country, the second largest economy, and the largest trading
entity, must shoulder the responsibilities and obligations of maintaining world
economic stability. The most pressing obligation is therefore to realize the RMB’s
internationalization.
Initiated by the US subprime mortgage crisis, the global financial crisis spread
internationallyin2008.Internationaltrade—especiallyinternationaltradewithEast
Asia—faces difficulties in valuation and settlement due to the shortage of US
dollar-denominated liquidity. “The US dollar shortage” intensified the ongoing
decline in trade, which itselffurthered the financial crisis. At that time, China did
not have sufficient conditions for internationalization. In order to meet global
ix
