The external appreciation & internal depreciation in RMB and the upsurge in China's foreign exchange reserves impact on RMB Internationalization and its countermeasures

The change of RMB exchange rate has presented the trend of RMB's external appreciation internal depreciation during2005—2013,similarly,there has been an explosive increase in China's foreign exchange reserves,and the two disadvantages are inextricably linked. So,China's government must guard against the compound dual- shock of the two disadvantages in the process of RMB internationalization. According to the experience of international currencies,one is to keep the currencies stable,the other is not or only have and hold a small amount of foreign exchange reserves. If not,the two disadvantages will be likely to lead to the decay of the currency internationalization. Therefore,these measures must be adopted,such as the moderate depreciation,reducing foreign exchange reserves and RMB exchange rate's marketization,which will help to eliminate the negative factors in the process of RMB internationalization.