Additionally, the overriding aim of internationalizing the Renminbi is the opening of China’s financial markets to foreign investors and borrowers. With regard to possible issuance of Renminbi bonds by foreign borrowers such as the US government, some people worry that permitting foreigners to issue Renminbi-denominated bonds would put the Chinese development model at risk by diverting investment abroad. That’s a misguided concern because many Chinese people have huge bank deposits for which they are eager to find attractive alternatives. Even more important, for its own good, China needs ways of dispersing its huge stocks of foreign exchange reserves among a much larger and more diversified variety of private sector savers. All this entails that China’s fiscal sector should aggressively expand into foreign markets. Individual Chinese investors and institutional investors should not only be allowed – they should be encouraged – to invest their money into foreign assets.

There is a big job ahead for the Chinese authorities to bring together all the elements of a Renminbi internationalization strategy into a cohesive and realizable form. This strategic road map will then of course need to be followed. But the first step is to assemble the initial package. Until a comprehensive strategy is designed and announced, the coming-of-age story for the Renminbi will remain a fairy tale.