Since the beginning of its reform and opening up over three decades ago, China has taken great efforts to integrate into the GATT/WTO-centered international trade system and the U.S. Dollar-centered international monetary system. By using the U.S. Dollar as the principal currency in its international economic engagement while exercising strict capital controls domestically, China has practically adopted a U.S. Dollar-dependent strategy to promote export, attract foreign investment, and maintain financial security, thus it has achieved lasting economic growth. However, with the declining credibility of the U.S. Dollar due to the U.S. financial crisis in 2008, and the increasing strategic competition between China and the United States, more and more Chinese in the policy and academic circles are skeptical of China's highly dependent monetary policy. Since 2009, China has begun to adopt a more proactive international monetary strategy by taking such measures as promoting the internationalization of the RMB, initiating new reforms of the international monetary system, and fostering a new regional monetary order. Such changes imply that China is changing its role: moving from being a dependent to a reformer of the U.S. Dollar system, which reflects a salient dimension of the evolving relationships between China and the broader international system.
Towards a New International Monetary Order: The World Currency Unit and the Global Indexed Bond
