As the world's second largest economy, largest trading nation, and the largest foreign holder of United States government bonds, the People's Republic of China (PRC) needs a currency with international status that can match its economic status in the global economy. The process of yuan internationalization essentially is a process of capital account liberalization. Due to the unprecedented and complex global financial crisis and the PRC's huge imbalances, capital account liberalization has to be pursued in a cautious way. As a result, the internationalization of the yuan is bound to be a long-drawn process.