2014 Fiscal Year Research-status Report
Internationalization of the Chinese Renminbi: A Political Study of Currency Internationalization
| Project/Area Number |
26380206
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| Research Institution | National Graduate Institute for Policy Studies |
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Principal Investigator |
CHEY Hyoung・kyu 政策研究大学院大学, 政策研究科, 准教授 (20626999)
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| Project Period (FY) |
2014-04-01 – 2018-03-31
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| Keywords | 人民元の国際化 / 通貨の国際化 / global currency / international currency / renminbi / yuan |
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| Outline of Annual Research Achievements |
My study has analyzed renminbi internationalization in mainland China, focusing mainly on the role of the People’s Bank of China in that process. The existing literature on either renminbi internationalization or currency internationalization in general pays little attention to the roles of central banks in currency internationalization. In this regard, this study’s analysis of the Bank makes significant contributions to the literature on renminbi internationalization and, going further, on currency internationalization in general.
My research also has examined the use of renminbi internationalization in Hong Kong. It has found that the “global” use of the renminbi is accounted for largely by the use of the currency in the city. This is a notable finding showing that the significance of renminbi internationalization tends to be exaggerated in the literature.
Moreover, while most studies of renminbi internationalization focus mainly on the supply side, by examining China’s own economic and political conditions related to it, my research in contrast has addressed the demand-side of renminbi internationalization, by providing an in-depth analysis of renminbi use in South Korea. The findings in this analysis highlight the significant impact on the internationalization of a currency of the politics in the foreign countries using it.
In addition, my research has examined the roles of emerging economies, including China, in global financial governance since the 2008 global financial crisis, which can affect internationalization of the renminbi.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
My initial plan for the first year was to analyze renminbi internationalization mainly in mainland China and Hong Kong, by investigating the Chinese government policies adopted to promote renminbi internationalization, by studying the effects of those policies on the actual internationalization of the renminbi, and examining the use of the renminbi at the global level in aggregate and that in Hong Kong using data provided by various government and non-government agencies.
As initially planned, my research has addressed renminbi internationalization in mainland China, focusing mainly on the People’s Bank of China, which has been one of the most enthusiastic domestic supporters in China for renminbi internationalization. It has addressed the policies that the Bank has adopted in order to promote renminbi internationalization and also why the Bank has supported it. And, as initially planned, my analysis has examined the use of the renminbi in Hong Kong.
Meanwhile, going beyond the initial plan, my research has been able to investigate the use of the renminbi in one Asian country, South Korea. In my initial plan the analysis of renminbi uses in Asian countries, including South Korea, was scheduled to be conducted in FY 2016. In addition, my study has been able to analyze the roles of emerging economies, including China, in global financial governance since the 2008 global financial crisis, which can affect internationalization of the renminbi.
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| Strategy for Future Research Activity |
In FY 2015, my study plans to complete its analysis of the roles of the People’s Bank of China in the process of renminbi internationalization.
My research also plans to expand its analysis of the use of the renminbi in Asian countries, going beyond the case of South Korea. It plans to examine the cases of Japan and one or two Southeast Asian countries, such as Thailand or Malaysia, ultimately conducting a comparative study with these cases. My study will analyze differences in the degree of use of the renminbi across the case countries and will address the factors that have led to the differences, covering both economic factors (e.g. economic relations between the case countries and China, the levels of financial market development in the countries, etc.) and political factors (e.g. the case countries’ political relations with China and the United States).
In addition, my study will begin to undertake its analysis of the use of the renminbi in offshore renminbi markets, such as London and Singapore. It will first examine the degree of development of the offshore renminbi market in each of the cases addressed. Next, it will explore the government policies of the case countries adopted for developing their offshore renminbi markets. This research will then analyze why each of the case countries has endeavored to develop an offshore renminbi market, paying particular attention to the roles of global banks in that process.
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| Causes of Carryover |
The occurrence of unused grants in my FY 2014 budget is attributable largely to that I spent less for overseas travels than initially planned and that my overseas travels were financed partly by other research funds together with my FY 2014 Kakenhi grant.
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| Expenditure Plan for Carryover Budget |
The unused FY 2014 Kakenhi grant will be used mainly to finance overseas travels during FY 2015. Meanwhile, new grant for FY 2015 is to be used largely in line with my initial plan, i.e. for purchase of equipment and consumables and overseas travels. But given that my research plans to address the case of Japan during FY 2015, new grant is likely to be used for domestic travels as well. Also, new grant is likely to be used for some miscellaneous expenses, such as the English editing of papers produced during the year.
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