The GW Center for the Study of Globalization
2033 K Street, NW, Suite 230 • Washington, DC 20052 • Phone: (202) 994-5206 • Fax: (202) 994-5284
Email: gwcsg@gwu.edu • http://gstudynet.org/
As China joins the World Trade Organization (WTO) and becomes more integrated into the global economy, financial convergence calls for full convertibility of the Chinese currency, the Renminbin (RMB). In this project, we propose to value the RMB and investigate the potential impacts of its convertibility of the global financial markets. Currently, the exchange rate of the RMB to the US dollar currency has been fixed. Theoretical valuation models of the currency will provide insights on potential changes of the currency's exchange rate upon full convertibility. Full convertibility will allow freedom of international capital flows and will enhance financial linkages between China and the rest of the world. An investigation of such linkages will allow the identification of the channels triggering financial stability or financial crises. The findings will also help build a constructive mechanism for the RMB to contribute to global financial stability.
Jiawen Yang, Associate Professor, International Business
Isabelle G. Bajeux-Besnainou, Associate Professor of Finance
The GW Center for the Study of Globalization
2033 K Street, NW, Suite 230 • Washington, DC 20052 • Phone: (202) 994-5206 • Fax: (202) 994-5284
Email: gwcsg@gwu.edu • http://gstudynet.org/