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Chinese renminbi arrival in the “Tripolar” global monetary regime

Ryan, John (2015) Chinese renminbi arrival in the “Tripolar” global monetary regime. China and World Economy, 23 (6). pp. 44-55. ISSN 1671-2234

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Identification Number: 10.1111/cwe.12135

Abstract

Since the financial crisis hit in 2007, the US dollar privilege has not only become “exorbitant” but “extortianate.” Countries such as China are no longer willing to allow the USA to exercise this extortionate behavior. The potential geopolitical implications of a US dollar decline are immense. The USA would lose its privileged seigniorage position and with that the ability to achieve permanently higher returns on foreign assets than the returns paid to foreigners who invest in the USA. The global economy is already close to operating with three regional exchange rate anchors: the US dollar; the euro; and, increasingly, the renminbi. Hence, the transition to a tripolar system could occur sooner than many assert. Nevertheless, given the importance of financial deepening and integration in the internationalization of currencies, any shift will still be gradual.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/(IS...
Additional Information: © 2015 Wiley
Divisions: IGA: LSE IDEAS
Subjects: J Political Science > JZ International relations
Sets: Research centres and groups > LSE IDEAS
Date Deposited: 28 Jun 2016 10:14
Last Modified: 20 Jul 2019 02:05
URI: http://eprints.lse.ac.uk/id/eprint/67025

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