China’s efforts to develop its currency – the renminbi, or Rmb – into an international reserve currency with controlled convertibility are unprecedented. Its strategy of achieving this through parallel development of the onshore and offshore RMB markets is also unique. Progress in both attempts so far has been remarkable, although it remains a small step in a long journey.
It is a welcome and necessary move, from the perspective of both China and the world.
For China, internationalisation of the Rmb is a critical step towards greater access to global financial markets and resources to support its growth and development – much like China’s entry into the World Trade Organization (WTO) – which has allowed the country to gain much wider access to world markets and to fully integrate with the global trade system.