Monetary Overextension: Why the Chinese Yuan will not become the next Global Currency

Abstract

In the first two decades of the twenty-first century, the People’s Republic of China has experienced massive growth to become the world’s second largest economy. Along with this rise, China has taken steps to expand its economic power and influence overseas. One of the ways it has pursued this is to promote the Chinese Renminbi as an alternative to the US Dollar, which has served as the international currency since the end of the Second World War. By analyzing the features of the Chinese economy through various paradigms, this paper will argue that, despite the best efforts of the Chinese government, the RMB will be unlikely to displace the USD as the premier currency in the near future.