This is my opinion on the Yuan internationalization issue：
CCP is facing a dilemma，they can only chose one. Either give up their current heavy-handed approach on business and economics，and promote Yuan internationalization; Or give up Yuan internationalization, and maintain their current position. You cannot have them both.
As we all know，capital control is the main obstacle of Yuan becoming a major reserve currency. But why capital control is needed？Because without capital control，capital outflow could be devastating. So here is the focal point：why China is particularly vulnerable to capital outflow but the likes of the US or UK are not？The answer is sense of security，capital needs a stable and secure market where they can safely put their money，and China is not such a place.
Remember China still and has always been a "bureaucracy standard" 官本位 nation, not a “gold standard” 金本位 nation. In China power is always prioritized over money. Having money can only get you to certain level in Chinese society no matter how rich you are，if you want to move up further you'd need power. It has been like that through out thousand years of Chinese history，merchant's social status always lower than bureaucrats. This is one of the reason business people don't feel secure about their asset in China.
The other thing is that CCP's frequent “crack-down” on certain sectors is not helping business confidence either. Think about it，if you have invested lots of money in a totally legit business, but all of a sudden the government says that the sector of your business is “undesirable”, and demands you to close the business，how would you feel？For instance the online-education sector，regardless government‘s rationale hold water or not，it is legal to run online-education business. If the government feels the sector is undesirable to the society，they can issue guidelines to regulate and phaseout it gradually. But you cannot just wipe out a legal business sector overnight with little warning，something the CCP did. Real estate sector is the same story，the sudden crack-down caused disastrous consequences. With gigantic developers go bankrupt and economic growth took a big hit. We all know real estate is overheated and needs to cool off，but you just cannot do it in “shock-therapy” fashion. Now facing economic downturn，CCP is making new policy that promotes real estate again. Ironic isn't it 早知如此何必当初. The point is CCP‘s practise on handling business is questionable. It may appear to be an easy and convenient way of regulating business in the eye of bureaucrats，but in the long term such practise weakens the sense of security of business. This is another important incentive for capital to flee China.
Of course CCP is well aware of the situation，but it is very unlikely they‘re willing to make significant compromises in near future. So I don't see capital control will loosen and Yuan become international reserve currency.
Last point is what are some downside if Yuan doesn't become international reserve currency？
（1）If the west impose financial sanctions on China similar to what they did to Russia，include kick China out of swfit，freeze Chinese banks money，confiscate China's oversea assets. China will find itself difficult to trade with countries outside of the west，because you still have to use dollar to trade. If Yuan become a international reserve currency by then，it will be very helpful.
（2）Because China's has to hold too much dollar reserve，and dollar is depreciating overtime. China has to use it to purchase US debt just to prevent dollar reserve value shrinking. And there is no other good alternative financial instruments to accommodate such large scale of money. By doing so will bring us back to the first problem，the US could freeze your money anytime but you still have to put your money in the US. Again，If Yuan is a major international reserve currency，China would not need to keep this much of dollar reserve in the first place.
There are many other reasons why Yuan internationalization could be very beneficial to China，but I just list two which I think are the most crucial ones.
CCP is facing a dilemma，they can only chose one. Either give up their current heavy-handed approach on business and economics，and promote Yuan internationalization; Or give up Yuan internationalization, and maintain their current position. You cannot have them both.
As we all know，capital control is the main obstacle of Yuan becoming a major reserve currency. But why capital control is needed？Because without capital control，capital outflow could be devastating. So here is the focal point：why China is particularly vulnerable to capital outflow but the likes of the US or UK are not？The answer is sense of security，capital needs a stable and secure market where they can safely put their money，and China is not such a place.
Remember China still and has always been a "bureaucracy standard" 官本位 nation, not a “gold standard” 金本位 nation. In China power is always prioritized over money. Having money can only get you to certain level in Chinese society no matter how rich you are，if you want to move up further you'd need power. It has been like that through out thousand years of Chinese history，merchant's social status always lower than bureaucrats. This is one of the reason business people don't feel secure about their asset in China.
The other thing is that CCP's frequent “crack-down” on certain sectors is not helping business confidence either. Think about it，if you have invested lots of money in a totally legit business, but all of a sudden the government says that the sector of your business is “undesirable”, and demands you to close the business，how would you feel？For instance the online-education sector，regardless government‘s rationale hold water or not，it is legal to run online-education business. If the government feels the sector is undesirable to the society，they can issue guidelines to regulate and phaseout it gradually. But you cannot just wipe out a legal business sector overnight with little warning，something the CCP did. Real estate sector is the same story，the sudden crack-down caused disastrous consequences. With gigantic developers go bankrupt and economic growth took a big hit. We all know real estate is overheated and needs to cool off，but you just cannot do it in “shock-therapy” fashion. Now facing economic downturn，CCP is making new policy that promotes real estate again. Ironic isn't it 早知如此何必当初. The point is CCP‘s practise on handling business is questionable. It may appear to be an easy and convenient way of regulating business in the eye of bureaucrats，but in the long term such practise weakens the sense of security of business. This is another important incentive for capital to flee China.
Of course CCP is well aware of the situation，but it is very unlikely they‘re willing to make significant compromises in near future. So I don't see capital control will loosen and Yuan become international reserve currency.
Last point is what are some downside if Yuan doesn't become international reserve currency？
（1）If the west impose financial sanctions on China similar to what they did to Russia，include kick China out of swfit，freeze Chinese banks money，confiscate China's oversea assets. China will find itself difficult to trade with countries outside of the west，because you still have to use dollar to trade. If Yuan become a international reserve currency by then，it will be very helpful.
（2）Because China's has to hold too much dollar reserve，and dollar is depreciating overtime. China has to use it to purchase US debt just to prevent dollar reserve value shrinking. And there is no other good alternative financial instruments to accommodate such large scale of money. By doing so will bring us back to the first problem，the US could freeze your money anytime but you still have to put your money in the US. Again，If Yuan is a major international reserve currency，China would not need to keep this much of dollar reserve in the first place.
There are many other reasons why Yuan internationalization could be very beneficial to China，but I just list two which I think are the most crucial ones.
