Great Powers Have Great Currencies: Popular Nationalist Discourse and China's Campaign to Internationalize the Renminbi

<p>Why did the Chinese government begin promoting the internationalization of its currency, the renminbi, after the 2008 global financial crisis? Only a few years earlier, Beijing balked at U.S. demands to reform its currency regime, which would require dismantling many of the country's long-preferred tools for promoting growth and maintaining domestic stability. Similar concerns about the dilution of monetary policy independence motivated previous rising economies Germany and Japan to proactively discourage the internationalization of their currencies. While China's central bank had long explored promoting greater international use of the renminbi, and such a policy would generate some benefits for China, I find that both institutions and interests fall short of explaining this policy shift. Rather, I suggest that beliefs, influenced by popular nationalist sentiment, are central to explaining<em> why</em> the central bank chose to focus its policy efforts on renminbi internationalization as well as <em>how</em> it finally overcame political opposition to currency reform. In the years leading up to the financial crisis, nationalist voices increasingly stressed the need for China to boast a global currency commensurate with its growing international stature. Leveraging cognitive framing theory, I argue that nationalist sentiment shifted the lens through which policies of currency reform were evaluated, from a logic of economics - conducive to determining domestic winners and losers - to that of global politics, which stressed more abstract goals of power and prestige. Using a mixed-methods approach of qualitative discourse analysis and quantitative content analysis of an author-assembled corpus of primary texts, I find that this change in evaluative frame caused some previously-opposed officials in the bureaucracy to begin to support currency reform. While there is no evidence that the central bank or China's senior leaders intentionally invoked nationalist themes to promote renminbi internationalization, I argue that this change in popular sentiment presented an unprecedented opportunity for the central bank to advance its policy agenda. Renminbi internationalization was thus in large part the political outcome of a popular idea that, as voiced by economist Robert Mundell, "great powers have great currencies."</p>

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Year dc:date.available

2018

Author dc:creator

• Bartee, Michael Stephen

Contributors dc:contributor

• Suisheng Zhao, Ph.D.
• Rachel Epstein
• Haider Khan

• China
• Content analysis
• Currency internationalization
• Economic nationalism
• Nationalism
• Renminbi internationalization
• Chinese Studies
• International Economics
• International Relations

Statement dc:rights

• <p>Copyright is held by the author. User is responsible for all copyright compliance.</p>

Language dc:language

en

Repository record dc:identifier

https://digitalcommons.du.edu/etd/1424

OAI identifier oai:identifier

oai:digitalcommons.du.edu:etd-2424