Critical analysis of RMB internationalization and the coming global currency shift Renminbi Rising charts the emergence of China's internationalizing currency and provides an in-depth analysis of the global repercussions. Written by a team of renown economics researchers, this book describes the pressures that enabled the emergence of a new global monetary system and why China's Renminbi (RMB) became the default 'second in line' as the U.S. receded from leadership. Policy makers and regulators will appreciate the examination of the motivations behind those driving the shift, and financial professionals will find valuable guidance in the discussion surrounding business opportunities that the RMB brings to the table. Coverage includes the emergence of new Chinese-sponsored financial institutions, the scale of various RMB businesses and the coming transformation of the global financial system. Effective management of international monetary affairs has never been more fundamental to the global economic recovery. The rapid emergence of China's RMB is a transformative event of global significance, and this book provides the context you need to understand the depth and breadth of changes on the horizon. Understand why a new global monetary system is needed Consider the outcomes as China emerges and the U.S. recedes Learn the context and motivations behind principal players' strategies Discover the scale of opportunities presented by the rise of the RMB It is essential for finance professionals and economic policy makers to understand the drivers, progress and likely trajectory of the RMB internationalization and to fully grasp the implications for the global financial system, international business and supporting financial products and services. Renminbi Rising offers detailed analysis of the key opportunities and threats inherent in this major economic shift.

Critical analysis of RMB internationalization and the coming global currency shiftRenminbi Rising charts the emergence of China's internationalizing currency and provides an in-depth analysis of the global repercussions. Written by a team of renown economics researchers, this book describes the pressures that enabled the emergence of a new global monetary system and why China's Renminbi (RMB) became the default 'second in line' as the U.S. receded from leadership. Policy makers and regulators will appreciate the examination of the motivations behind those driving the shift, and financial professionals will find valuable guidance in the discussion surrounding business opportunities that the RMB brings to the table. Coverage includes the emergence of new Chinese-sponsored financial institutions, the scale of various RMB businesses and the coming transformation of the global financial system.Effective management of international monetary affairs has never been more fundamental to the global economic recovery. The rapid emergence of China's RMB is a transformative event of global significance, and this book provides the context you need to understand the depth and breadth of changes on the horizon.* Understand why a new global monetary system is needed* Consider the outcomes as China emerges and the U.S. recedes* Learn the context and motivations behind principal players' strategies* Discover the scale of opportunities presented by the rise of the RMBIt is essential for finance professionals and economic policy makers to understand the drivers, progress and likely trajectory of the RMB internationalization and to fully grasp the implications for the global financial system, international business and supporting financial products and services. Renminbi Rising offers detailed analysis of the key opportunities and threats inherent in this major economic shift.

List of Figures xiList of Tables xiiiForeword xvAcknowledgments xviiAbout the Author xixCHAPTER 1 Internationalizing the RMB 1The Conditions for Becoming a Global Currency 2Business and RMB 10RMB-Product Markets 11Reserve Currency 14The Emerging Monetary Order 16CHAPTER 2 The Rise and Fall of Currencies - Historical Lessons for the RMB 21Risks in International Monetary System Transitions 23The Role of Eurodollars in the 2008 Global Financial Crisis 262008: Year Zero for a New International Monetary System? 27Conditions for Currency Internationalization: Market Demand and Institutional Supply 30Institutional Inertia and Disruptive Events 35Offshore Currencies and International Liquidity 36Current International Reactions to the RMB's Rise 41RMB Internationalization 44Conclusion 46References 47CHAPTER 3 Economic and Institutional Foundations for the Rise of the RMB 49Economic Foundation 49Surprises 58New Growth Engines 60Capital-Account Liberalization 62Institutional Quality 68Conclusion 80References 81CHAPTER 4 Can the Chinese Bond Market Support a Potential Global Renminbi? 83Overview of the Chinese Bond Market 84Chinese Treasury Market in International Perspective 91A Dilemma and a Bold Public-Debt Consolidation Scheme 98Government-Backed Debt Securities 103Conclusion 107References 107CHAPTER 5 Waxing and Waning of the Chinese Stock and Banking Markets 109Chinese Stock Market: Growing Despite Immaturity Flaws 109A Massive Chinese Banking Market Opening 125Conclusion 133References 133CHAPTER 6 Rising FX Turnover of the RMB 135Could the Market Accommodate More Global Currencies? 135What Determines the FX Liquidity of the RMB? 138Potential for Rising RMB Turnover by Market Segment 143Conclusion 149References 150CHAPTER 7 A Spreading Global Network for RMB Trade 151The RMB's International Position 152Hong Kong Still the Dominant Offshore RMB Center 155More Offshore Centers Catch Up to Spread a Global Network 158Prospects for Offshore RMB Centers 164Conclusion 169References 169CHAPTER 8 Brief Examples of Business Use of the Internationalizing RMB 171Samsung's Use of RMB to Reduce Foreign Exchange Conversion Costs 171Alstom's Use of RMB as Corporate Treasury Currency 173Chinese Importers' Profit Incentives from Use of RMB Trade Settlement: Changhong 175Conclusion 178Reference 178CHAPTER 9 The RMB as a Reserve Currency 179Global Perspectives 179Scale of RMB Holdings 181Drivers of Change 182Exchanging RMB in a Crisis 190Onshore and Offshore Access 190Offshore Alternatives 191Conservatives Change Course 192Roadblocks Ahead? 193RMB Inclusion in SDR 195Capital-Account Reform 197Conclusion 198References 199CHAPTER 10 Concluding Reflections 201Appendix A: China RMB Financial Statistics and Forecasts by Other Institutions 207Glossary 213Index 215