The Role of London and Frankfurt in Supporting the Internationalisation of the Chinese Renminbi

Ramon Pacheco Pardo, Jan Knoerich and Yuanfang Li

New Political Economy, 2019, vol. 24, issue 4, 530-545

Abstract: Why do foreign countries support the internationalisation of the renminbi (RMB) by establishing offshore RMB centres? The Chinese government has openly stated that internationalisation of the country’s currency is one of its top priorities. International use of the RMB has already significantly increased in recent years. Yet, existing literature has almost exclusively focused on the structure of the Chinese economy and China’s domestic politics to explain RMB internationalisation. With this article, we seek to fill a gap in the literature by analysing the reasons why foreign countries support RMB internationalisation. Using the cases of Germany and the UK, we show that a combination of economic and political factors, partly in response to inducements from Beijing, best explain why foreign countries support Chinese efforts to internationalise the RMB. Some of these factors are similar to both countries, but there are also differences regarding the reasons why they support this key Chinese goal. We use the case of the establishment of offshore RMB centres to conduct our analysis, given the clear political nature of foreign countries allowing China to open them in their own territory. We thus also show that the Chinese currency is starting to display the characteristics of negotiated currencies.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/13563467.2018.1472561 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:cnpexx:v:24:y:2019:i:4:p:530-545

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/cnpe20

DOI: 10.1080/13563467.2018.1472561

Access Statistics for this article

New Political Economy is currently edited by Professor Colin Hay

More articles in New Political Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().