, the 28th ASEAN Plus Three (10+3) Finance Ministers and Central Bank Governors Meeting was held in Milan, Italy. The meeting formally agreed to expand the scope of the "Chiang Mai Initiative" multilateral financing model, making it applicable not only during financial crises but also in the event of pandemics or natural disasters. Since the introduction of the "Chiang Mai Initiative" in 2008, it has always been an important component of the regional financial safety net, playing a positive role in maintaining regional financial stability. Expanding its application scope this time means that when facing non-traditional security risks, countries within the region will be able to more flexibly and effectively utilize this mechanism to meet challenges, reflecting the determination of ASEAN and China, Japan, and South Korea to strengthen cooperation and jointly address global challenges. Trump's global tariff war has triggered a chain reaction in the global financial market based on the US dollar. While China is firmly countering US tariff coercion, scholars have begun to deeply discuss whether East Asia could refer to the path of European integration and the formation of the euro under the current situation where the global trade system and financial system are being shaken. Especially with the increasing call for renminbi internationalization, how will China play its role as a stabilizer for the global economy and finance? Regarding these issues, Observer Network interviewed Cao Yuanzheng, former chief economist of the Industrial and Commercial Bank of China and former vice president of the Chinese Macroeconomic Association, who once participated in the design of the renminbi internationalization route. [Dialogue/Observer Network Gao Yanping] The Foundation of the US Dollar as an International Currency is Being Undermined Observer Network: Regarding the essence of the trade war, earlier this year you mentioned in our "Diagnosing the Chinese Economy in 2025" dialogue that the Sino-US trade war is a conflict between national interests and the tendency toward globalization. Recently, Trump has expanded the scope of the tariff increase to cover the entire globe. What do you think about this? Cao Yuanzheng: This year marks the 80th anniversary of the victory of World War II. Eighty years ago, as World War II was nearing victory, major powers around the world discussed post-war order arrangements, forming the Yalta Consensus. Based on this consensus, an international multilateral political and economic governance system based on rules was established, manifested in the establishment of the United Nations in international political institutional arrangements, forming a coordination mechanism where each country has one vote based on national self-determination to decide major international political and military matters; in terms of economic and financial institutional arrangements, two complementary pillars were formed: first, the principle of free trade, establishing the General Agreement on Tariffs and Trade (GATT); second, the Bretton Woods International Monetary System was established, forming a financial mechanism with a sovereign currency as the international currency. After World War II, why was an international multilateral political and economic governance system based on rules established? This was the result of people deeply reflecting on the consequences of two wars breaking out within just 20 short years before the war. The international order before the war was based on unilateral or bilateral geopolitical and economic arrangements built on strength, manifesting in international trade and economics as mercantilist trade policies aimed at achieving a surplus. In 1930, the United States enacted the Smoot-Hawley Tariff Act, imposing unprecedentedly high tariffs on over 20,000 types of imported goods from around the world, causing opposition and retaliation from most countries globally, leading to a gradual escalation of the tariff war, which became a breeding ground for the rise of German Nazism and ultimately led to the outbreak of World War II. "The lessons of history are worth noting," precisely to ensure that World War II would be the end of all wars, the source of war must be eradicated and mechanisms for lasting peace established. Among these, open markets and free trade are crucial, and the global community began to establish systems for mutual reduction of tariffs and non-tariff barriers, which is the reason for the establishment of the General Agreement on Tariffs and Trade. Correspondingly, if open markets and free trade are implemented, given that gold, constrained by natural resources, has limited supply, using a reliable credit-based sovereign currency as the international currency can serve as both a unit of value for international trade and provide liquidity promptly, making the international monetary system elastic and avoiding international payment crises due to insufficient international liquidity. This is what people know as the post-war international monetary system centered on the US dollar. By 1995, with the end of the Cold War, the General Agreement on Tariffs and Trade already covered 128 countries globally. In 1996, the World Trade Organization (WTO) replaced the General Agreement on Tariffs and Trade. Compared to the General Agreement on Tariffs and Trade, the WTO not only promotes the liberalization of commodity trade but also the liberalization of production factor trade, namely investment liberalization, laying the institutional foundation for economic globalization. Economic globalization has enabled many countries to enjoy the dividends of development, accelerating not only the growth rate of the global economy but also making global trade grow faster than the economy, and global finance grow faster than trade. Thus, economic globalization, characterized by investment liberalization, has ushered in a new phase of financial integration globally. In response to this, the Bretton Woods monetary system collapsed in 1973. Although the US dollar is no longer linked to gold, it remains the international currency. In other words, the international monetary system is still centered on the US dollar, and Wall Street remains the benchmark. It should be noted that the international multilateral governance system based on rules after World War II was established by the United States, making the United States the leader of this system. In international politics, it is the world police; in international economics, it is the rule maker; and in international finance, it is the provider of international currencies. However, Trump's equal tariffs completely disregard all of this, with the aim of "America First," which is diametrically opposed to the principles he once advocated. Not only does this deviate from the direction the world has been striving for since World War II, but it also undermines the institutional foundation of economic globalization, plunging the world economy into fragmentation and the international financial system into turmoil, leaving the "rule-based" international multilateral governance system in a precarious state. This is particularly evident in Trump's design of equal tariffs. Unlike general tariff rates that are equalized, Trump's equal tariffs are based on the surplus that the target country has with the US, meaning they are equal to the US deficit with the target country. The larger the US deficit is, the higher the tariff rate imposed on the target country, calculated roughly as half of the ratio of the US deficit to the country's imports. This method of taxation severely disrupts the universal preferential principle in the current international trade system where tax rate concessions automatically apply to third parties. Even compared to the Smoot-Hawley Tariff Act of the past, Trump's equal tariffs are more discriminatory, thus exacerbating the situation and challenging international trade orders like the WTO with a consistency principle through one-on-one negotiations between countries, making them more harmful. More seriously, such equal tariffs aimed at achieving surpluses and eliminating deficits fundamentally undermine the status of the US dollar as an international currency. First, as an international currency, the US dollar must maintain a deficit externally. Without a deficit, others won't have dollars, and the dollar wouldn't become an international currency. A continuous and stable, predictable international balance-of-payments deficit mechanism is a prerequisite for the US dollar to be an international currency, representing the international obligations of a country with international currency sovereignty. However, Trump's tariff war has cast a shadow of recession over the world economy. Second, since the introduction of equal tariffs, the status of the US dollar as an international currency has already been shaken. The US financial market has witnessed a phenomenon of stock market crashes, soaring Treasury yields, and a simultaneous decline in the US dollar index. Just the US dollar index has fallen by 9 percentage points from its年初 high, a speed and magnitude rarely seen in history. This "triple kill" of stocks, bonds, and exchange rates not only reflects market concerns about economic recession but also indicates a waning confidence in the US dollar-centered international monetary system: whether the US dollar can remain a reliable international currency has become a significant concern. In this situation, if financial turbulence occurs, it won't just lead to a financial crisis but also an international monetary system crisis, potentially greater than the 2008 international financial crisis. Thus, Trump's equal tariffs have exacerbated the ongoing de-dollarization trend worldwide, bringing the issue of reshaping the international monetary system back to attention. To summarize, Trump's equal tariffs are shaking the global trade system and the international monetary system, and cannot simply be viewed as mere inter-country trade disputes or changes in inter-country relations. It signifies that the multilateral economic and financial system built after the war based on rules is facing unprecedented challenges, with its foundation being shaken. This is something we haven't seen in the past 80 years. The Renminbi's Opportunity Arises as the Rule of Dollar Pegging is Broken Observer Network: Your explanation is very profound. The issue of reshaping the international monetary system has been raised. Can we say that the renminbi's opportunity has come? Cao Yuanzheng: The international demand for the renminbi is indeed rising. In fact, among major economies globally, especially trade powerhouses, their currencies have international transaction demands. Currently, China is the second-largest economy and the largest trading nation, naturally leading to cross-border use of the renminbi, particularly in goods trade, making cross-border goods trade settlement the foundational form of renminbi internationalization. However, while a sovereign currency can start with trade, it cannot stop there. In other words, it cannot merely remain at the level of international trade but should become an investment and financing tool in the international financial market and widely enter the balance sheets of non-residents, becoming a reserve currency. Trump's imposition of equal tariffs on the global stage, as previously mentioned, is shaking the institutional foundation of the international monetary system, bringing the issue of reshaping the international monetary order to the forefront. Against this backdrop, the international demand for the renminbi is no longer confined to the trade level but is appearing in the international financial market for investment, financing, and reserves, driving the comprehensive international use of the renminbi. In this sense, the opportunity for renminbi internationalization has arrived. Of course, this also means that it will bring significant challenges to China's financial sector. First, we notice that Trump's policy of equal tariffs has led to a depreciation of the US dollar. Currently, the US dollar index has dropped to around 98, whereas it once rose to 114 (in 2022), now down by 16 percentage points, with 9 percentage points lost this year alone. Generally speaking, the implication of the international monetary system centered on the US dollar is that the US dollar serves as the anchor currency, with various currencies pegged to the US dollar. If the US dollar index rises, it means various currencies will depreciate; conversely, currencies will appreciate, showing consistent movements of either appreciation or depreciation. However, look at recent developments; inconsistent movements have emerged. The US dollar is depreciating, but some currencies are appreciating, while others are still depreciating. This indicates that the convention of many currencies pegging to the US dollar has been broken. Take the renminbi for example. The US dollar is significantly depreciating, while the renminbi is also slightly depreciating. Usually, when the US dollar depreciates, the renminbi appreciates, but this time the renminbi did not appreciate. This situation leads to only one conclusion: the relationship between the renminbi and the US dollar anchor has relatively loosened, and the fluctuation of the renminbi exchange rate is increasingly dominated by China's independent monetary policy. Similarly, after Trump announced the imposition of equal tariffs, the US dollar index fell, but the exchange rates of many currencies did not move in tandem. This shows that the changes in exchange rates of various currencies are no longer closely tied to the movement of the US dollar. This implies the weakening of the anchoring effect of the US dollar in the current international monetary system, which can be seen as a manifestation of Trump's tax measures impacting the international monetary system, signaling the fundamental动摇of the US dollar's role as the cornerstone of the international monetary system. It is necessary to emphasize that this fundamental动摇means that reshaping the international monetary order has become an urgent issue. From the current situation, under the impact of Trump's imposition of equal tariffs, the international monetary order is starting to become disordered, and the global order is fragmenting, making it difficult to restore the original order. Now, one feasible approach is to adapt to the requirements of regional economic integration and form a regional monetary and financial order. In this regard, Asia, particularly East Asia, is at the forefront. Among these, the renminbi becoming the international currency of this region has become a realistic option. Prospects for East Asian Economic and Financial Cooperation: From the Japanese Yen to the Renminbi Observer Network: Then, how should we understand the prospects of a new monetary and financial order in Asia, particularly in East Asia? Is it possible to follow the path of European integration and the formation of the euro? Cao Yuanzheng: At present, in the areas along the "Belt and Road," especially in East Asia, the cross-border use of the renminbi in goods trade is gaining momentum. Why does this happen? It is because of the "monetary original sin" long existing in East Asia, which is considered the root cause of the Asian financial crisis more than twenty years ago. By "monetary original sin," it refers to three mismatches: First, countries in East Asia are mostly export-oriented economies. Besides trading with regions outside the area, their internal trade also accounts for a large proportion, even reaching up to 50% of the total external trade of the region. However, whether it is external trade or internal regional trade, third-party currencies, mainly the US dollar, are used for settlement. If a third-party currency, such as the US dollar, encounters problems, not only external trade but also mutual trade within the region cannot proceed, resulting in a "currency mismatch." Second, East Asia is a fast-developing region that requires a large amount of long-term investment, but the capital flowing into East Asia is mostly short-term capital that enters and exits quickly, which can lead to macroeconomic instability. The inconsistency between the need for long-term capital and the actual inflow of short-term capital becomes the origin of the Asian financial crisis, creating a "maturity mismatch." Third, East Asia is influenced by Confucian culture, where residents are frugal with high savings rates, but due to underdeveloped financial infrastructure, these savings are not mobilized by local financial institutions but flow overseas, most notably by high foreign exchange reserves in East Asian countries that are basically in US dollars, invested in US financial markets. Thus, savings in East Asia are mobilized by overseas financial institutions, which then become overseas direct investments directed towards East Asia, creating a "structural mismatch" of savings and investment. From the above, we can see that the "three mismatches" represented by the monetary original sin in East Asia center on the region's economy and financial arrangements heavily relying on currencies outside the region, specifically the stable supply of US dollars. Therefore, financial security hinges solely on the US dollar. To ensure economic and financial security, with the increasing economic integration in East Asia, the demand for domestic currency use arises, aiming to correct the three mismatches and create safer development conditions. We observe that as early as the 1990s, with the development of East Asian economic integration, the call for domestic currency use in East Asia emerged. At that time, Japan was the locomotive of East Asian economics, forming an East Asian industrial formation with Japan as the leader, thus putting forward the internationalization of the Japanese yen. Japan also made corresponding arrangements, such as the "black-figure circulation plan" for the yen. However, due to various reasons, especially Japan's shortsighted policies after the bursting of its economic bubble, the yen failed to live up to expectations and did not play the expected leadership role but instead became one of the causes of the Asian financial crisis. After the Asian financial crisis, the process of the yen's internationalization slowed significantly. People began to seek other forms of domestic currency solutions, one of which was to draw lessons from the experience of the European Economic Community forming the euro, proposing the concept of an "Asian Currency." The experience of the European Economic Community transitioning from economic integration to monetary integration suggests that the process of domestic currency adoption on a voluntary basis is feasible, but forming a supranational common currency requires stringent conditions. Judging from the situation in East Asia, these stringent conditions are not met, making the formation of the "Asian Currency" extremely difficult. In comparison, using a single sovereign currency as a regional currency is a better suboptimal choice, and the renminbi has entered the field of vision, generating international demand. After the global financial crisis erupted in 2008, East Asia became more aware of the importance of domestic currency adoption. In 2010, China surpassed Japan to become the second-largest economy and subsequently the largest trading nation globally. As mentioned earlier, if a country's GDP accounts for a sufficiently large proportion of the global total and its trade share accounts for a sufficiently large proportion of the global total, the demand for that country's currency for international transactions will increase, making it a potential provider of international currencies. The calls for renminbi internationalization have been rising ever higher against this background. To meet the growing international demand for the renminbi, China decided to officially begin pilot programs for cross-border renminbi settlement in goods trade on July 2, 2009, marking the beginning of the renminbi internationalization process. Observing from this perspective, the internationalization of the renminbi not only opens up new prospects for correcting the three mismatches in East Asia but also promotes strong, balanced, and more sustainable development in East Asia. Currently, the fact that East Asian countries and China are each other's primary trading partners is the best proof. It is precisely for this reason that the internationalization of the renminbi started with cross-border goods settlement, progressed to service trade and direct investment, and has developed into tools for investment and financing in the international financial market, entering the ranks of reserve currencies, and has already risen to become the fifth largest international reserve currency globally. The Renminbi's Anchor Currency Indicators Are Obvious, and the Chiang Mai Mechanism Is Revisited Observer Network: Does the rise of the renminbi's position in the world, especially in East Asia, mean that the renminbi has at least externally acquired the conditions to become an anchor currency in East Asia? Cao Yuanzheng: In a certain sense, this can be said. According to the latest SWIFT global payment currency ranking released in March 2025, the renminbi payment remains steady at fourth place. In 2024, the renminbi cross-border receipts and payments amounted to 64.1 trillion yuan, accounting for 53% of China's total international payments, surpassing the US dollar for the first time as the main settlement currency for cross-border transactions. From the breadth of renminbi international usage, particularly its depth in East Asia, the renminbi has begun to play a role similar to an anchor currency. Especially in recent financial market turbulence caused by Trump's equal tariffs, we have observed some new signs. Including in East Asia, some neighboring currencies such as the Australian dollar and Russian ruble are not following the fluctuations of the US dollar but are instead aligning with the renminbi, indicating that these currencies are beginning to peg to the renminbi, showing that the renminbi is becoming an anchor, at least one of the anchors. However, from the perspective of long-term development, the full realization of the renminbi's role as an anchor currency still relies on the deepening of the Chiang Mai mechanism involving ten ASEAN countries plus China, Japan, and South Korea. The so-called Chiang Mai mechanism is a product of East Asian countries reflecting on the Asian financial crisis. As mentioned earlier, the three mismatches in East Asia highlight the financial vulnerability of this region. East Asia lacks financial markets denominated and settled in its own currency. Only through regional monetary and financial cooperation to initiate the domestic currency process and form a unified financial market can the vulnerability caused by the "monetary original sin" be resolved, and another Asian financial crisis can be avoided. For this purpose, in 2000, the "ASEAN Ten Countries + China, Japan, and South Korea" (10+3) established the "Bilateral Currency Swap Mechanism," known as the Chiang Mai Mechanism (CMI). They mutually agreed to provide intervention funds in the event of a sudden flow of short-term capital in East Asia, exchange information on the economy and foreign exchange, establish a supervisory agency to prevent currency crises, and set up a standby loan fund. Thus, the "Chiang Mai Mechanism" brought East Asian monetary and financial cooperation into a substantive phase. In 2003, given the loose and scattered nature of the "Bilateral Currency Swap Mechanism," which made it difficult to form a cohesive force, China proposed the "Chiang Mai Initiative Multilateralization Initiative." Through the establishment of a self-managed regional foreign exchange reserve pool (SRPA), it aimed to address international payment crises caused by a shortage of US dollar liquidity. Simultaneously, to correct the maturity mismatch, the same year, the sixth 10+3 finance ministers' meeting proposed the "Initiative for Promoting the Development of the Asian Bond Market" (ABMI), and the 10+3 central bank governors' meeting decided to establish the Asian Bond Fund (ABF) to encourage and guide the development of the Asian bond market. The international financial crisis of 2008 accelerated the process of the Chiang Mai Initiative Multilateralization. The "Chiang Mai Initiative" (CMI) was upgraded to a multilateral agreement (CMIM), and an Asian Macroeconomic Research Office initiated by the 10+3 countries began to function as a coordinating body, performing functions similar to those of the Asian IMF. Correspondingly, in 2009, the scale, structure, share allocation, loan quota, decision-making procedures, and supervision mechanism of the Asian Foreign Exchange Reserve Pool were confirmed, and it began operations in 2010. The multilateral arrangement of the Chiang Mai Initiative has brought East Asia's economic and financial governance to a new level. To adapt to the needs of the evolving situation, in 2012, the Asian Foreign Exchange Reserve Pool further increased its size, expanding from $120 billion to $240 billion. The contribution shares remained largely unchanged, with China, Japan, and South Korea still accounting for 80%, but the loan ratios were set differently according to the varying situations of different countries and regions. Vietnam, Myanmar, Cambodia, Laos, and the new ASEAN Four Countries, due to their higher financial fragility, had loan ratios five times their contribution shares. Among the older ASEAN Six Countries and Regions, Hong Kong, China had a ratio of 2.5 times, South Korea had a ratio of 1 time, and Mainland China and Japan had a ratio of 0.5 times. The loan conditions followed those of the IMF and were tied to IMF loans. However, before an IMF loan application was approved, the Asian Foreign Exchange Reserve Pool could provide an initial loan of 30% to alleviate urgent needs, thereby reducing the risk of triggering a currency crisis due to short-term foreign exchange liquidity shortages. Meanwhile, the Asian bond market has made substantial progress, particularly in the growth of the offshore renminbi bond market. After 2009, with the increasing international demand for renminbi, offshore renminbi-denominated "dim sum bonds," "Taiwan bonds," and "Lion City bonds" were successively launched in China. In 2016, the domestic interbank bond market was opened to foreign investors, and in 2017, the "Bond Connect" between mainland China and Hong Kong was launched, facilitating domestic residents and investors to invest in overseas markets. This not only alleviated the maturity mismatch but also expanded investment capabilities. Incidentally, to further address the maturity mismatch issue, Asian countries established the Asian Infrastructure Investment Bank, specifically for long-term infrastructure financing arrangements. In summary, it can be imagined that if part of the Asian Foreign Exchange Reserve Pool becomes renminbi-denominated, it will create conditions for diversification of foreign exchange reserves in East Asian countries, allowing the renminbi to more conveniently enter counterpart reserves and more broadly enter the balance sheets of counterpart residents; if the Asian bond market is based in Hong Kong and partially renminbi-denominated, and if channels for Chinese residents to invest in Hong Kong's offshore renminbi bond market are unblocked, large-scale infrastructure projects such as the Pan-Asian Railway including the North-South Railway in Vietnam will have new financing sources. Infrastructure projects can issue renminbi bonds in Hong Kong to raise construction funds and be used for equipment and engineering capabilities, accelerating project construction speeds, with the Jakarta-Bandung and China-Laos railways serving as examples. In this way, not only can the funding and technical bottlenecks in infrastructure construction in the Asian region be alleviated, but it will also improve the asset allocation pattern of Chinese residents and investors, providing new choices for the preservation and appreciation of assets for the general public in China, thereby addressing the structural mismatch of savings and investment in East Asia. Observing from this perspective, deepening the construction of the Chiang Mai mechanism and expanding it from 10+3 to the Regional Comprehensive Economic Partnership (RCEP) is a better choice to consolidate the results of Asia-Pacific economic and trade cooperation, guard against financial risks, and respond to the challenge of Trump's equal tariffs. At the Boao Forum for Asia held in late March this year, professionals from various countries, especially Asian countries, expressed similar concerns, and the Chiang Mai mechanism returned to public view. It is particularly noteworthy that on April 8th, the ASEAN Plus Three (10+3) Deputy Heads of Finance and Central Banks convened, and this meeting reached a series of consensuses, including improving the Chiang Mai Initiative Multilateralization (CMIM) and the Asian Macroeconomic Research Office, deepening regional macroeconomic policy coordination, and strengthening the construction of the regional financial safety net. The meeting unanimously passed the legal arrangements for renminbi contributions under the Chiang Mai Initiative Multilateralization mechanism. China's participation in the ASEAN Plus Three (10+3) Deputy Heads of Finance and Central Banks meeting marked the first time that legal arrangements for renminbi contributions under the Chiang Mai multilateralization mechanism were passed. Central Bank website. The deepening of the Chiang Mai mechanism has opened up new prospects for the renminbi's internationalization. We say that although the renminbi is already widely used internationally, it is mainly used at the trade level, and more prominently, it is primarily used at the bilateral trade level rather than in a multilateral context. What is a true international currency? It is not just about Thailand using renminbi when doing business with China, but also about Thailand using renminbi when doing business with South Korea. This way, the renminbi will be widely used in the international financial market. If the renminbi becomes a reserve currency for East Asia and even the "Belt and Road," and the main tool for bond market investment and financing, the international use of the renminbi will be multilateralized. The Renminbi's Internationalization Faces Significant Challenges Observer Network: You just mentioned that the renminbi's challenges have arrived. So, what are the challenges faced by the regionalization and internationalization of the renminbi? Cao Yuanzheng: We notice that since the Ukraine-Russia conflict, the world has seen a phenomenon of "de-dollarization" to reduce systemic reliance on the US dollar. "Don't put all your eggs in one basket" has become a common practice, and the international demand for the renminbi has started to grow strongly. This time, Trump's imposition of equal tariffs not only increases the risk for the US dollar but also raises the possibility of "changing anchors" in the international monetary system, greatly increasing the international demand for the renminbi. While this is undoubtedly an opportunity for renminbi internationalization, it is also a challenge to China's financial system. First, all existing international currencies are convertible, but looking at the renminbi, it is still not fully convertible under the capital account. Thus, the current internationalization of the renminbi is taking place on the basis of incomplete free convertibility, leading to a situation where the renminbi can be widely used internationally but not freely used. These circumstances are unprecedented in history and raise an economic question: how far can an unconvertible currency go in its international use? In other words, the issue of renminbi convertibility still stands before China's financial reform. Second, for a sovereign currency to become an international currency, it must have a stable deficit formation mechanism. Without a stable deficit, others won't be able to obtain the currency normally, making international transactions impossible. Without a deficit formation mechanism, there can be no stable expectations, and it cannot serve as an anchor currency. The US dollar is such a case, and once the renminbi becomes an international currency, it will be the same. However, for a developing country like China, what a deficit means must be carefully considered, especially given the massive employment in the export sector. If the current account, i.e., foreign trade, consistently has huge deficits, the consequences are unimaginable. Under this constraint, the only feasible choice is a capital account deficit. But how to form a stable capital account deficit remains a challenge. Japan's "black-figure circulation plan" got stuck here, causing the yen internationalization to fail. Lessons from the past should be deeply reflected upon. Third, the exchange rate and interest rate are related as a parity relationship. When a sovereign currency becomes an international currency, its interest rate is the exchange rate, and the interest rate is a product of various financial products constantly traded in a deep financial market, manifested as the Treasury yield curve. Thus, a deep and open financial market is crucial. Various financial institutions trade sovereign currency-denominated financial products in this market, allowing the currency's interest rate to reach the entire world, and the central bank of that country fulfills its obligation to supplement international liquidity in this market by regulating the supply of its sovereign currency, thereby becoming the global central bank and fulfilling the role of the lender of last resort. However, China's financial market is still underdeveloped, with limited depth and not yet open to the outside world. Summarizing the above, for the renminbi to achieve internationalization, the prerequisite is to deepen China's financial system reform. It is in this historical trend that the task of building a financial powerhouse was proposed at last year's Central Financial Work Conference, manifesting in "five aspects" and "six strengths." Among these "six strengths," building a strong central bank, a strong capital market, and a strong currency are closely linked to the renminbi's internationalization. China's experience of reform and opening-up indicates that the premise for opening up to the outside world is to handle domestic affairs well. This rule still applies to the issue of renminbi internationalization. [Image source: https://p3-sign.toutiaoimg.com/tos-cn-i-tjoges91tu/TVhclbhBRMKeyG~tplv-tt-origin-web:gif.jpeg?_iz=58558&from=article.pc_detail&lk3s=953192f4&x-expires=1747123283&x-signature=y9zQiImh6QhP%2F70NenOO0oGcl9I%3D] This article is an exclusive article of Observer Network. 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