The interactions between the Chinese economy and the rest of the world are now huge, but expectations – and hopes – that Beijing would internationalise its currency as its economy converged with others have been frustrated. Why? In that latest edition of China Analysis published by ECFR and Asia Centre, we look at the debate between Chinese economics experts, including the following trends. China’s monetary and financial policies are underpinned by geopolitical calculations. China has built a tradition of using money and financial institutions as a tool rather than an end in itself, after a century and a half of being on the losing side of currency conflicts. Every year that Beijing keeps capital controls it buys time for China’s hypergrowth, outcompeting other emerging economies and leaving the West to grapple with the difficulties of its open economies. Chinese economists and geopoliticians hint at the possible disappearance of European economic power, with relish and without apparent regret.
Summary
– REDBACKS FOR GREENBACKS: THE INTERNALISATION OF THE RENMINBI –
The renminbi: “Our currency, your problem” (François Godement)
Internationalisation without convertibility (Thomas Vendryes)
China must avoid the fate of Japan (Mathieu Duchâtel)
Europessimism in the Chinese press (François Godement)