China is currently gradually opening and liberalizing its financial market in order to internationalize its currency. A global currency will have several positive aspects as it will lower China’s exposure to foreign currencies and its dependency to the US dollar, lower the currency risks Chinese exporters and importers are facing, improve the efficiency of its financial system by exposing its currency to market forces, and help them challenge the hegemony of the United States. To achieve the internationalization of the RMB, China has been gradually opening its financial and capital market since 2005 and the RMB is starting to be adopted as a reserve currency in the central banks and international institutions. They first created an offshore RMB market in Hong-Kong before gradually letting foreigners invest into mainland China. In spite of some challenging issues such as high level of debt, the 2015 market shock, or bad credit quality, the Chinese government seems resolved to lower its implication in the financial markets and liberalizing the capital markets. Instead, it plans to use the Belt and Road Initiative as a catalyzer for the internationalization of its currency. This project will bring massive RMB-denominated investments outside of China, as well as improve the integration of the Chinese economy among its neighbors. This would create new market for the RMB and increase its usage globally. The BRI initiative will present new challenges to China, as it is mainly leveraged and could lead some countries to default. It will also require a change in China foreign affairs policy, as the BRI investments might require China to be more involved in domestic affairs of foreign countries.

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