The Internationalization of Renminbi: The View of Brazilian Companies Regarding the Internationalization Process of Chinese Currency

Sérgio Edegar Girardi de Quadros and André Azevedo

Chinese Economy, 2023, vol. 56, issue 2, 147-162

Abstract: China is the second largest global economy and Brazil’s largest trade partner. Ever since the financial crisis of 2008, there has been deliberate intention on the part of the Chinese government to internationalize its currency. This study aims to investigate the perception of Brazilian companies regarding the internationalization of renminbi and its impacts on trade with China. We performed a qualitative research through a theoretical sampling, selecting nine major companies presenting relevant trade with China. The research shows that, by adopting renminbi, companies can reap economic benefits such as increase in trade and reduction in transaction costs, for instance. Some barriers have also been identified, coinciding with the literature review, such as lack of liquidity, reliability and independence of the Chinese monetary authority and other issues related to cultural differences. The companies interviewed support certain initiatives, such as entering into swap agreement and the adoption, by the Brazilian Central Bank, of renminbi in its international reserves. Finally, this study proposes financial cooperation agreements with China, aiming at reducing barriers on employing the Chinese currency and increasing business deals between both countries.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:mes:chinec:v:56:y:2023:i:2:p:147-162

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DOI: 10.1080/10971475.2022.2096810

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