The Chinese government’s approach to policies that promote the renminbi’s use as an international currency is inherently linked to domestic macroeconomic objectives and financial market develop- ment. The impact of the renminbi on the global monetary system and whether it contributes to greater global financial stability depend on the manner and speed with which China opens its capital account and develops its financial markets, what other policy changes are put in place to support this process, and what the implications are for China’s own growth and stability.
The big question now is whether China’s government will use the goal of making the renminbi a global currency to catalyze momentum on a broad agenda of domestic policy reforms that are required to support this goal. Ultimately, the path of China’s growth and its role in the global economy will depend on those policy choices.