Generally speaking, the internationalization of a currency indicates that its settlement, calculation, and value-storage functions have expanded beyond a certain jurisdiction. To maintain these functions, it is assumed that capital movements are liberalized, and international customs such as commercial contracts are adhered to. In other words, if these fundamental conditions are breached, or altered artificially or politically, true financial internationalization cannot be realized.
New kid on the block – renminbi on the rise From this point of view, let me take a look at the recent development of so-called renminbi internationalization. In recent years, we have observed an increase in reminbi-denominated trade settlements, the establishment of an offshore renminbi market, and the expansion of renminbi-denominated financial products in Hong Kong.