2016 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 | currency / international currency / renminbi / yuan |
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| Outline of Annual Research Achievements |
I have further developed my quantitative research on the use of the renminbi (RMB) in the world, which focuses particularly on the question of who the first foreign users of the RMB as an international currency are. This research has found that a state hosting a major global financial center is likely to be more interested in enhancing its use of the RMB. This implies that global financial institutions and the related inter-state rivalries among international currency users may play crucial roles in the emergence of a new international currency. These research findings are published as a working paper of the Bank of Korea (South Korea’s central bank) in December 2016.
Also, I have embarked upon an analysis of the use of the RMB in Japan, which is currently in progress. Tentative findings of this study suggest that the use of the RMB in Japan is still significantly limited and that the recently-increased political tension between Japan and China has hindered Japan in developing infrastructures in favor of RMB use in the country.
In addition, I have strengthened my study of the preference of the People’s Bank of China regarding the internationalization of the RMB, by developing a comparative analysis of central banks’ preferences about the internationalizations of their domestic currencies. I have found that a central bank’s particular preference is determined largely by how currency internationalization affects its capabilities to conduct monetary policy and to maintain financial stability.
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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 was to analyze RMB internationalization in mainland China and Hong Kong in FY 2014, to examine the roles of offshore RMB markets (other than Hong Kong) in internationalization of the RMB in FY 2015, and to investigate the use of the renminbi in Asian countries such as Japan and South Korea in FY2016.
However, my actual research activity has expanded to include a quantitative analysis of the use of the RMB in the world, while my plan has changed to focus mainly on South Korea, Japan, the United Kingdom and the United States for a comparative analysis of RMB use in foreign countries.
Given the changes in my research plan, my research appears to progress smoothly. In further detail, I have addressed RMB internationalization in mainland China, focusing primarily on the People’s Bank of China, which has been one of the most enthusiastic domestic supporters in China for RMB internationalization. I also have almost completed my analysis of the South Korean case, while having made a substantial progress in the investigation of the Japanese case. In the meantime, I am finalizing my quantitative analysis of RMB internationalization in the world.
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| Strategy for Future Research Activity |
In FY2017, which is the last year of this research project, I will first carry out in-depth research on the use of the RMB in the United States and in the United Kingdom. Thereafter, I will conduct a comparative study of RMB use in the four case countries I have addressed: South Korea, Japan, the United States and the United Kingdom. In this comparative analysis, I will explore the factors that have led to differences in degrees of RMB use among those countries.
In the meantime, I will also finalize the quantitative study of RMB use in the world and of RMB internationalization in mainland China.
After completion of all these analyses, I will disseminate my research outcomes through multiple channels. In detail, I plan to submit the research findings of each of i) the quantitative study of RMB use in the world, ii) the case study of RMB use in Japan, iii) the comparative study of RMB use in South Korea, Japan, the United States and the United Kingdom, and iv) the analysis of RMB use in mainland China to respected international political economy journals for publication. In the meantime, I plan to write a book manuscript that encompasses all my major research findings through this research project and will submit it to a university publisher such as Cornell University Press. In addition, I will present those research outcomes in diverse conferences and seminars.
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| Causes of Carryover |
There are some unused grants in my FY2016 budget mainly because I expected that I would need more research funds than initially planned for FY2017, which is the last year of this research project, and therefore tried to save some funds to carry over to FY2017 and also because I could use other research funds to finance my research activity for this research project.
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| Expenditure Plan for Carryover Budget |
The unused FY 2016 Kakenhi grant will be used mainly to finance research trips during FY2017. Meanwhile, new grant for FY2017 is to be used largely in line with my initial plan, i.e. for research trips, English editing, the purchase of books, journal articles and consumables, etc.
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