1.2 The compilation principles of RMB internationalization index

According to the definition of internationalization of the RMB and the purpose of the compilation of RMB internationalization index,as well as drawing the experience from compiling various financial indices,principles of compiling RMB internationalization index are as follows.

Firstly,the function positioning should be clear and specific to reflect the actual situation of the international application of the RMB.The compilation of any index is to meet specific functional requirements.And the core goal of the compilation of the RMB international index is to objectively reflect the status of the use of the RMB around the world,so as to provide objective,fair and reliable basis for government departments to make relative decisions,and for private sectors to use RMB—related financial products and formulate relevant financial strategies.

Secondly,reflect the distinctive guiding direction of internationalization of the RMB,and underline the circulation and transaction function of the RMB in real economy.The compilation of the index should not only reflect the status of internationalization of the RMB,but also highlight Chinese financial strategies,especially reflect the top—level goal—oriented design of financial strategy.The outbreak of the global financial crisis makes people profoundly recognize the serious harm of over—developed virtual economy.Once the currency runs away from the real economy and produces endogenous inflation,it will cause great destruction to the stability of the entire financial system.Thus we must not focus too much on virtual economy or financial transaction function in internationalization process of the RMB；instead,we should pay more attention to circulation and transaction functions of the real economy.And this will be fully reflected in the process of compiling the RMB internationalization index.

Thirdly,insist on the scientific and systematic principles of design.The authority and instructiveness of the index depend on whether the design is scientific or not.The design of RMB internationalization index must start from the nature of international currency；scientifically define the connotation and denotation of internationalization of the RMB based on adequate theories about international currency and international finance,and go on research combining practices of internationalization of the RMB.This makes RMB international index not only reflect universal laws and characteristics of international currency,but also reflect its strategic goals.In the design of RMB index system,we focus on the accurate connotation of a single indicator and the systematicness and comprehensiveness of the index system.As internationalization of the RMB is generated by systematic development of various international monetary functions of the RMB,the RMB internationalization index which acts as an evaluation system must have the function of broadly reflecting every important aspect of internationalization of the RMB.As a result,the index system of internationalization of the RMB is not the simple structure comprising several single indicators,but should maintain systemic integrity；and indicators should complement each other and show a comprehensive reflection of internationalization of the RMB from different levels and perspectives.

Fourthly,take comparability and availability into account.One of the purposes of RMB internationalization index is providing the basis of selecting trade and reserve currency for countries around the world,which requires that the horizontal and dynamic comparability of the evaluation results must be considered in the design.Meanwhile,availability and manipuility of the data should also be considered in the design of the index system.For some indicators which are highly important but not available,we should estimate them with as much information as possible.Besides,indicators should be easy to be understood and should not be ambiguous to make sure that RMB internationa—lization index can be calculated and applied accurately and conveniently.

Fifthly,flexibility should be kept along with the structural stability.Indicators and their weights used in compilation of RMB internationalization index should not be changed frequently to ensure the continuity and dynamic comparability of the interpretation of the evaluation results.However,it is not wise to keep indicators and their weights strictly fixed；instead,they should have some flexibility.Because there are different strategic goals in different phases of internationalization of the RMB,and these strategic goals should be adjusted appropriately according to changes of international political and economic situations.In order to reflect the internationalization process of the RMB accurately and objectively,the indicators and their weights used in the compilation of RMB internationalization index should be compatible with the practice of internationalization of the RMB and Chinese strategic goals,and should be able to make appropriate adjustments in different stages.

Sixthly,the compilation method of the index should be transparent and simple.The principles of selecting indicators and determining weights in compiling RMB international index should be carried out under scientific and operational guidance.At the same time,we should use a relatively simple and intuitive calculation method,and avoid complex and obscure method.In addition,the compilation method should be open to public to assist staff from governments and relative departments study internationalization of the RMB together,which will lay a solid mass foundation for the scientific development of RMB internationalization index.