Will RenMinBi become world currency?

本文分析了将人民币变成世界通用货币

Will RenMinBi become world currency?

The paper will analyze the topic “Will RenMinBi become world currency?” from four aspects. Firstly, the paper will introduce the definition of world currency. And meanwhile, some characteristics covered in world currency will be given in the introduction about the world currency. Secondly, the paper will analyze the necessary conditions which supports the formation of world currency. This part will provide some tips for the next part where the RenMinBi will be introduced. In this part, the tendency of world currency for RenMinBi will be analyzed and at the same time, some situation about Chinese economy will be added to the process of analysis. As is known to all, the ideas about whether RenMinBi will become world currency or not are different. Finally, a personal idea about the tendency about RenMinBi will be given and a brief conclusion will be given at last. 
When it comes to world currency, it may be not strange to us. But the exact definition of world currency, most of us will feel confused with some terms just like the dollar and the gold. According to Mundell, Robert (466), world currency refers to the currency which functions as unity equivalent in the international commodity circulation. World currency develops with the production of commodity exchange. World currency not only performs as the measure value, but also performs as medium of international payment, purchase and transfer. In the history river, world currency becomes the tool of imperialist country to plunder resources and wealth from other developing countries. Besides, world currency as the tool connecting the international economy accelerates the pace of economy. But during the process, world currency accelerates the accumulation of commercial capital of capitalism. Since 19th century, gold and silver had been world currency. But with the determination of gold currency standard system, gold becomes the world currency gradually. However, gold currency standard system in the age of imperialism was broken and gold exited from the native circulation. In the year 1944, bretton woods conference determined dollar as the standard of the currency in the world. (Helleiner, Eric, 21) The US shouldered the responsibility to exchange the gold with dollars. Under that condition, the capitalist countries owned 70 percent of gold in the world. 
If a kind of credit money wants to be the world currency, what characteristics it should be own are following. The first condition is that the country which issues this credit currency should have powerful economic basis. Besides, this credit currency should be stable in long term. The third condition is that the credit currency should get the recognitions from all the countries under some international agreement.
After exploring the characteristics of world currency, the main attention will be given the topic that whether RenMinBi will become world currency or not. Before talking this topic, it is necessary to analyze the background of Chinese economy. As is known to all, Chinese economy takes the second place now. The powerful economy supports RenMinBi to become world currency. Maybe it seems natural for this process to realize. Dobson, Wendy, and Paul R. Masson in their paper points out that “widespread economic inefficiencies and constraints placed on economic policies make it likely that China's financial system will evolve in the direction of the more liberalized and market-oriented financial systems of the advanced countries.” (134) It is easy to find the author hold the positive idea about the topic. From the tendency of Chinese economy, it also can get the same result. Lee, Jong Wha in his paper also points that RenMinBi will become an international currency with Asia and beyond. (42) However, Chen and his partners in their paper point out that although the RenMinBi has great potential to become an international currency, attaining a fledged international RenMinBi is still a distant goal due to the unstable economic factors. (1, 16) Lardy, Nicholas in his book gets the same idea as well. (12-141)
Personally speaking, I think RenMinBi has the tendency to become an international currency. But it is necessary to pay attention to the dollar's financial system which also plays an important role in the world. Compared to RenMinBi, dollar is accepted by more countries. If RenMinBi wants to break through this obstacle, it needs to go far and keeps more stable in the international economy full of unknown market factors.   
To sum up, although many challenges are on the way, ReMinBi still owes the high possibility to become an international currency. If the Chinese economy becomes more powerful, all the obstacles will be disappear. 

Reference
Mundell, Robert. "The case for a world currency." Journal of Policy Modeling 27.4 (2005): 465-475.
Helleiner, Eric. States and the reemergence of global finance: from Bretton Woods to the 1990s. Cornell University Press, 1996.
Dobson, Wendy, and Paul R. Masson. "Will the renminbi become a world currency?." China Economic Review 20.1 (2009): 124-135.
Lee, Jong‐Wha. "Will the renminbi emerge as an international reserve currency?" The World Economy 37.1 (2014): 42-62.
Chen, Xiaoli, and Yin‐Wong Cheung. "Renminbi going global." China & World Economy 19.2 (2011): 1-18.
Lardy, Nicholas. "China: The great new economic challenge." The United States and the World Economy: Foreign Economic Policy for the Next Decade (2005): 12-141.