ABSTRACT
The Silk Road is a transportation route mainly on silk trade, connecting Asia, Europe, and Africa via various routes. Meanwhile, China should has also enhanced regional economic cooperation and deepened the Reform and Opening-up Policy to advance the economic transition. On policy coordination, Renminbi (RMB) internationalization requires RMB’s wide use in the world, including trade settlement, financial transaction, and foreign exchange reserves. On financial integration, China’s economic and financial development is more advanced than that in other countries along the Belt and Road and China is able and willing to support these countries. RMB’s internationalization promotes the development of the “Belt and Road” Initiative by providing adequate liquidity. The choice of international settlement currency is determined by currency supply fluctuation, exchange rate fluctuation, transaction cost, and interest rate.
