On June 28th, our institute invited Zhang Honglin, the lifetime Professor of Illinois State University and famous expert in the field of international economic theory and policy to deliver a lecture on the topic of “WTO and the US Dollar Hegemony—An Enlightenment to the Internationalization of RMB” to CIWTO teachers and students. The dean of CIWTO Tu Xinquan hosted the lecture.

Professor Zhang first made an elaboration on the development of WTO and Globalization, international and domestic situations such as the changes in international political and economic pattern, China's macroeconomic fundamentals, and the formation of US Dollar Hegemony. He also pointed out the opportunities and challenges for RMB’s internationalization.

Professor Zhang argued that the currency hegemony is the foundation of economic power. The U.S has been the biggest economy since 1970s. It has advantages in economy, culture, military and other fields, which became the basic of U.S dollar hegemony. The U.S government can easily gain seigniorage revenues through printing U.S dollars to reach the international balance of payments. Furthermore, the wide use of the U.S dollars in the world makes the U.S better able to avoid the risks of exchange rate fluctuations, and US financial institution more profitable.

Under the U.S Dollar Hegemony hierarchy, the international trade and investment is conducted and dollar-denominated, the exchange rate fluctuations bring more uncertainty and harm to developing countries like purchasing power of U.S dollar declines when USD continues to depreciate. The use of RMB as the international invoicing and settlement currency will help China avoid the exchange rate fluctuations. Thus, the internationalization of RMB may help make China an economic and financial power.

During the lecture, Professor Zhang knowledgeably elaborated his distinguished ideas about the global situation, China’s strategy under the current situation and the prospects of future development from the perspective of history. The lecture ended in interactive communication between professors and students, with the topic such as “Belt and Road Initiative”, the impact of BREXIT and so forth.

Translator: LiYadong

Reviser: Song Yida