Tradeoff: China’s Control of the RMB and its Economic Sovereignty

Abstract

Currency mobility policy has been not just an economic, but an ideological tool in the years of PRC rule. China has used it to assert independence, and – to a disputed degree – used it as a development tool. Now, as China becomes more integrated into the world economy and its institutions, China’s ability to use currency mobility policy as a way to maintain economic sovereignty is being reduced. This paper will outline this process, and then interpret it through the use of classical and postWestern IR theory, drawing the conclusion that China is going through the process of financialisation – which inevitably removes control of the economy from the levers of government.