Study On The Development Of RMB OFC

Offshore Financial Center is also called Offshore Financial Market or External Market. It is a free trading center involved mainly with non-resident, operate the convertible currency, finance inside the issuing country or outside it, basically under no legal regulation nor taxation limitation, with a condition of highly liberalized and internationalized financial management system and favorable taxation. The requirement of a currency's internationalization is a spontaneous process of a market that was spread step by step accompanied by the currency's related offshore financial services going on and the growth and grown of products priced in this currency, it is an inevitable process of a currency's internationalization to develop offshore financial services. Times of post financial crisis is an important time window for China to accelerate its capital formation and resource placement, RMB Offshore Financial Center (RMB OFC) will be a major supporting point for the strategy of financial opening-up of China steadily. According to the national financial strategy guide line of "Cross-border RMB trade settlement—RMB OFC—Internationalization of RMB", we should build offshore "capital pool" for capital priced in RMB positively, seeking the route to promote the favorable conditions of HK being an international financial center, keep a leading position on the competition of offshore financial services, and provide a testing field for the internationalization of the RMB. At the same time we should fully perfect the multiple-function of Shanghai being an international financial center, form an optimum of RMB capital backflow system, strengthen the financial innovation and supervision cooperation of HK and mainland China. Via the "springboard" of the construction of RMB OFC to steady advance the process of RMB internationalization, it is an actual task urgently to be discussed.This article was based on the background of RMB internationalization, treated the found and development of RMB OFC as the object to study, took the model experience of the development of other international OFCs for reference, discussed the practicable condition and functional orientation for the development of RMB OFC. Applied the Analysis of Game Theory, Fuzzy Comprehensive Evaluation and multiple-factor analytics to make empirical choose for the location and building mode of RMB OFC. This article Proposed to perfect the operation mechanism of RMB OFC, structured reasonable interest rate formation mechanism, credit expansion mechanism, fund circulation mechanism and multi-participator competition mechanism of RMB OFC. And then designed the path of development for RMB OFCs, proposed the driving force model to be a government-pushed market-orientated power model, discussed the functional location, development strategy, and policy-supporting system of HK RMB OFC. In the end this article assessed the monetary and financial impact of the development of RMB OFCs, proclaimed the risk effect of its development, made an comparable choice of supervise model of it, presented that we should take separated supervision model, while also discussed the frame content of risk supervision of RMB Offshore Center.1. This article was based on the theories of financial innovation, currency internationalization, and geographical finance, analyzed the motivational reason of the development of international OFCs, functions of social economy and its operational mechanism. Via the penetrating inside of evolutional trend of International OFCs, revealed the social economical effect of OFCs, took the historical experience of other international OFCs, and established theoretical foundation for the discussion for the innovation of RMB OFCs.2. This article applied plenty of empirical methods like Cointegration Test, by means of an analysis of the forming process of RMB OFCs, presented the nudge effect of cross border RMB settlement for the development of RMB OFC.By applying the cointegration method to measure and calculate the scale of currency in RMB OFCs, doing empirical research in the expansion situation of cross border RMB circulation and the demand guidance of OFCs innovation, this article demonstrated that in the times after financial crisis to establish RMB OFCs has both its necessity and feasibility, and conducted the functional positioning of RMB OFCs under the background of national economy. 3. According to the theory of financial agglomeration, this article conducted the conditional analyze for the establishment of OFC, made a Game Theory backed selection of composition for RMB OFCs, structured an index system for the competitiveness of OFCs, utilized the model of maturity evaluation for financial centers to made an overall merit of competitiveness for some leading Financial Center. Proceed to the next step structured formative factor evaluation system for RMB OFCs by Analytic Hierarchy Process, combining Fuzzy Comprehensive Evaluation and Multivariate Analysis to made a location and building mode of RMB OFCs development, raised the structure of Shenzhen-Shanghai cooperative mechanism to boost the RMB OFC development.4. On the basis of Institutional Economics theory this article explained the operational mechanism of OFCs, analyzed the cost and efficiency of establishing OFC. Proposed to perfect the interest rate formation mechanism and pricing mechanism, straighten out and moderately regulate and control credit expansion mechanism of RMB OFCs, create certain condition to structure reasonable RMB backflow mechanism, clear the domestic and foreign circulation of funds in RMB OFCs, and coordinate the multiple participant competitive thinking in RMB OFC.5. Based on Financial Agglomeration Theory and Information Flow Analyses, this article revealed the factor of formative causes of modern international OFC. Via the comparison and evaluation of the formative path of International OFCs, this article proposed that the RMB OFCs development could apply a policy-driven and market-dominated motivational model. This article also rationally defined the functional position of HK RMB OFCs in current stage, estimated the strength and weakness of HK RMB OFCs development in current stage, proposed the strategic procedure for the development of HK RMB OFC, and discussed the innovative tactics to optimize the financial ecology of HK, also conducted a mating design for the policy supporting system of RMB OFC development.6. This article proclaimed the weight status of the institutional element in OFCs development via the Financial Ecology Theory. And by means of empirical study of the impact of domestic currency and finance influenced by RMB OFC development, revealed its effect of advantages and disadvantages, assessed the potential risks of cross border capital flow in RMB OFCs, then made a comparable choice of supervisory and regulatory model of RMB OFC, proposed that we should establish "separated type" in RMB OFC, and then gradually transform into moderately "infiltrate type", conceived the content frame to perfect the risk supervise and regulate system in RMB OFC, proposed the operational thinking and suggested counter plan to steady proceed the development of RMB OFC.