Renminbi in Ordinary Economies: A Demand-Side Study of Currency Globalization

Most studies of renminbi internationalization focus mainly on the supply side, by examining China's own economic and political conditions related to it.This study in contrast addresses the demand-side of renminbi internationalization, by providing an indepth analysis of renminbi use in ordinary foreign economies from both economic and political perspectives, with a particular focus on South Korea, China's next-door neighbor.It finds that sustainable indigenous market forces facilitating renminbi use in South Korea remain weak, despite the country's close economic ties with China.This research also shows, however, that the Korean government has itself recently been able, through its policy measures, to generate new domestic vested interests supporting greater use of the renminbi.These findings ultimately highlight the significant impact on the internationalization of a currency of the politics in the foreign countries using it.