McNally, Christopher A

Abstract
Over the past 7 years the Chinese government has begun in earnest a gradual process of seeking a more internationalized currency. By conceptualizing China’s domestic political economy as having generated Sino-capitalism, this article utilizes a ‘second image’ explanation to elucidate the logic of RMB internationalization policies. Therefore, rather than focusing on international incentives and constraints as they affect RMB internationalization the aim is to trace the origins of China’s unique policy stance with historical institutional analysis. The article begins with conceptualizing the domestic logic of Sino-capitalism and then highlights key aspects of Sino-capitalism’s institutional arrangements and policy approaches as they shape RMB internationalization. The article ends with arguing that the basic institutional logic and policy stances of Sino-capitalism are here to stay. With regard to RMB internationalization this indicates that full-scale liberalization measures, especially of China’s capital account, are unlikely to be undertaken in the near future. However, Sino-capitalism’s logic opens up new avenues by which China, as it becomes an ever larger part of the global political economy, could gradually foster an international currency.
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