The International Political Economy of the Renminbi
Currency Internationalization and Reactive Currency Statecraft
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Although the internationalization of the Chinese renminbi is an important international political event, most of the studies of it place their analytical focuses largely just on China itself, the issuer of the currency. In contrast, this book addresses the question of how foreign states have responded to the renminbi’s internationalization, during its initial phase through the 2010s, and thereby breaks new ground in exploring the international politics of currency internationalization. It builds a theoretical framework for analyzing a state’s policy toward renminbi internationalization, developing the key concept of reactive currency statecraft. It then applies this framework to the four select cases of the United Kingdom, Japan, South Korea and the United States.
This book reveals that all four of these countries have deliberately utilized their policies related to renminbi internationalization as means of achieving their own foreign policy goals associated with China, goals that have been principally economic in some cases but political in others. Remarkably, the predominant mode of response to the renminbi’s internationalization has been accommodative. Even the United States and Japan—China’s chief geopolitical and also international currency rivals—have never attempted to actively suppress it.
This study provides new insights to anyone concerned with the transformation of the world monetary order, while also contributing a valuable analysis of the international politics surrounding the rise of China.
Table of Contents
2. The Politics of Reactive Currency Statecraft
3. The Rise of the "People’s Currency"
4. The United Kingdom: A Passionate Advocate
5. Japan: A Diplomatic User of the Renminbi
6. South Korea: A Late but Active Accommodator
7. The United States: A Confident Hegemon
Hyoung-kyu Chey is Associate Professor of International Political Economy at the National Graduate Institute for Policy Studies (GRIPS) in Tokyo. He is the author of International Harmonization of Financial Regulation? The Politics of Global Diffusion of the Basel Capital Accord (2014).
"This absorbing book, with its focus on how nations respond to the internationalization of China’s renminbi, breaks new ground in the study of international currencies. Based on a mountain of empirical evidence, Chey’s analysis of ‘reactive currency statecraft’ is cogent and persuasive. The volume deserves to be on the book shelf of anyone with a serious interest in the political economy of finance."
Benjamin J. Cohen, University of California, Santa Barbara
"In this fascinating book, Hyoung-kyu Chey sheds new light on a crucial, but neglected dimension of the politics of the RMB’s internationalization: the reactions of foreign states. He reveals not just the varied nature of those reactions but also how much they are influenced by broader foreign policy goals. The lesson is clear and important: international monetary transformations are always deeply political processes."
Eric Helleiner, University of Waterloo
"An incisive investigation into national responses to the internationalization of China’s currency. Chey introduces a useful theoretical framework based on the novel concept of ‘reactive currency statecraft.’ The book’s argument and case study evidence, which includes dozens of interviews with top political and financial officials in Japan, Korea, the United Kingdom, and the United States, will be of great interest to scholars of international money and anyone interested in how governments are responding to China’s rise."
Daniel McDowell, Syracuse University