Study On The Promoting Effect Of Shanghai, Shenzhen And Hong Kong Financial Market On RMB Internationalization

The internationalization of RMB was proposed in the 1990s. Recent decades, with the rapid development of China's economy and the increasingly close relationship of China's foreign trade, China and international countries call for increasing internationalization of the RMB. In the process of internationalization of the RMB, the international financial center plays a role of carrier. Its importance is self-evident. Historically, there is a strong relationship between the international status of a country's currency and development of the country's economic and financial. The international development experience of the dollar, the pound and the yen shows that the international of currency needs financial development support and international financial center's support. Therefore, relying on the dollar, pound, yen currency international experience, in the process of promoting the internationalization of the RMB, China should vigorously build international financial centers."CPC Central Committee on National Economic and Social Development the thirteenth Five-Year Plan" puts forward:Speed up financial reform, reform and improve the financial regulatory framework, promote the capital market bidirectional open and orderly achieve capital account convertibility. Financial bidirectional open in favor of China's financial markets have matured, and promote China's financial markets long-term stable and healthy development, help accelerate the pace of RMB internationalization, promote capital account convertibility. It also has an important role in the development of China's financial industry, the RMB international development as well as the international financial center construction.It provides a new perspective for the RMB international development and international financial center.The paper is based on the view of financial bidirectional open, studies the internationalization of the RMB International Experience, RMB internationalization factors, the internationalization of RMB linkage between onshore and offshore markets, financial center's construction in Shanghai and Hong Kong, RMB internationalization institutional reform issues.First, the paper studies the internationalization of the RMB International Experience, analyzes dollar internationalization and international financial center in New York, the pound internationalization and international financial center in London, the internationalization of the yen and the Tokyo International Financial Center. By analyzing these issues can provide valuable experience for the internationalization of the RMB and international financial center constraction.Secondly, this paper examines international influence factors. By constructing an econometric model and based on open financial perspective, this paper selects international financial center's construction, the capital account openness, economic openness, market-oriented interest rate, exchange rate market and foreign exchange reserves and other factors, empirical analysis of the size and extent of the impact of these factors on the internationalization of the RMB, especially these factors on the internationalization of dynamic impact process. Among them, this paper focuses on the size and degree impact of the international financial center on the internationalization of the RMB, prominent the importance of an international financial center to promote the internationalization of RMB. The empirical results show that:co-integration between RMB internationalization and its influencing factors, indicating the presence of long-term equilibrium relationship between the internationalization of the RMB and its influencing factors; the factors of RMB internationalization are the internationalization of the RMB's Granger reasons, it explains that those factors have an influence on the internationalization of RMB; RMB internationalization factors presence a significant impact on the Internationalization, the impact on the internationalization of RMB is a dynamic process; international financial center has a maximum contribution in promoting RMB internationalization.Thirdly, the paper examines the relationship between the finance market deepening of shanghai and shenzhen and the system reform of RMB internationalization, mainly studied the promote affection of the interest rate reform, RMB exchange rate system reform and capital account liberalization on the internationalization of the RMB, and puts forward suggestion in advancing the process of internationalization of the RMB, the interest rate market-oriented reforms, reform of RMB exchange rate regime, capital account liberalization measures. At last, this paper analyzes the impact of the RMB internationalization on the interest rate marketization, the RMB exchange marketization, capital account liberalization. The analysis results show that the RMB internationalization is an effective strength of promoting interest rate liberalization. The RMB internationalization is conducive to the stability of the RMB exchange rate. The RMB internationalization will promote capital account openness.Fourthly, This paper studies the promotion of the internationalization of RMB on the financial market of Shanghai, Shenzhen and Hong Kong, and analyzes the promotion mechanism of of RMB internationalization on the financial center of Shanghai, Shenzhen and Hong Kong. This paper proposes the establishment of the RMB offshore financial center and onshore financial center in Shanghai and Shenzhen, the establishment of ideological offshore financial center in Hong Kong, analyzes development situation, strengths and recommendations of onshore financial center in Shanghai, analyzes the development of offshore financial center in Hong Kong and the positive affect and recommendations, studies the current development of offshore financial center of Shenzhen, the necessity of an active role and suggestions. On this basis, to study international financial center linkage development issue in Shanghai, Shenzhen and Hong Kong, three places should strengthen the division of labor and cooperation in international financial centers, and jointly promote the internationalization of the RMB.Fifthly, this paper examines the linkage between the internationalization of the RMB onshore and offshore markets for the promotion of the internationalization of RMB. By constructing an econometric model and based on open financial perspective, While selecting the territory of the RMB exchange rate and foreign exchange rate, select the spot exchange rate in RMB (CNY) and onshore RMB forward rate (DF) depicts the changes in the onshore market, Select the Hong Kong offshore RMB spot exchange rate (CNH) and offshore non-deliverable forward rate (NDF) portray offshore market, empirical research the RMB's volatility overflow in onshore and offshore market,information overflow and guide relations, reveals linkage between RMB between onshore and offshore markets. The empirical results show:RMB has a significantly positive correlation between the onshore and offshore markets. Second, the domestic RMB spot exchange rate (CNY) and the Hong Kong offshore the RMB spot exchange rate (CNH), onshore RMB forward exchange rate (DF) and the Hong Kong offshore the RMB spot exchange rate (CNH), the spot exchange rate in RMB (CNY) and overseas non-deliverable forward rate (NDF), there are significant bidirectional volatility spillover phenomenon between domestic RMB forward exchange rate (DF) and overseas non-deliverable forward rate (NDF). This suggests that, whether in the RMB spot market level or the level of long-term market,the RMB has a significant linkage between onshore and offshore markets.Sixthly, this paper studies the relationship between RMB internationalization and China's financial development. Firstly, the qualitative analysis method is used to analyze the promotion effects of the RMB internationalization on the financial centers of Shanghai, Shenzhen and Hong Kong. Then, this paper constructs the Seemingly Unrelated Regression model (SUR) to empirically analyze the promotion magnitude and extent of RMB internationalization on the financial centers of Shanghai, Shenzhen and Hong Kong. Empirical results show that the RMB internationalization has a significantly positive role in promoting the financial centers of Shanghai, Shenzhen and Hong Kong. The promotion effect of the RMB Internationalization on Hong Kong is the largest, the promotion effect of the RMB Internationalization on Shanghai financial center is in the middle, and the promotion effect of the RMB Internationalization on Shenzhen financial center is the smallest.