Research On RMB Settlement In Cross-border Trade

RMB settlement in cross-border trade was officially launched on July 1^st,2009.It means that the RMB internationalization promoted by Chinese government has taken the first step.After nearly a decade development,RMB internationalization starting from RMB settlement in cross-border trade has made a series of remarkable achievements.On October 1^st,2016,the RMB was officially included in the SDR basket and became an international currency in the theoretical sense.RMB settlement in cross-border trade is an important basis for RMB internationalization,but this foundation is not solid.This paper finds that RMB settlement in cross-border trade,to some extent,is driven by speculative demand so far.First,RMB exchange rate appreciation has a significant promoting effect on RMB settlement in cross-border trade.Second,arbitrage based on RMB settlement in cross-border trade is flourishing.Thirdly,the ratio of RMB pricing in cross-border trade is much less than the ratio of RMB settlement in cross-border trade.History and reality show that the currency internationalization driven by speculative motives is not sustainable.And based on this starting point,this paper follows the classic research idea of“raising questions,analyzing problems and solving problems”.The main work of this paper is as follows:Chapter one is the related theory and literature review of RMB internationalization and RMB settlement in cross-border trade.The first section sorts out the relevant theories and research literature of currency internationalization,including the connotation,conditions and economic effects of currency internationalization.The second section summarizes the research on settlement currency selection of international trade,and mainly discusses the relationship between settlement currency selection of international trade and currency internationalization,as well as the essential difference between settlement currency and pricing currency in international trade.The third section of this chapter summarizes the relevant research on RMB settlement in cross-border trade in recent years.Chapter two analyzes the developing process,structure characteristics and existing problems of RMB settlement in cross-border trade.We divide the developing process of RMB settlement in cross-border trade into three stages:pilot implementation stage,high-speed development stage and"new normal"stage.Furthermore,from several aspects,we analyzes the structure characteristics of RMB settlement in cross-border trade.Moreover,based on the perspective of RMB internationalisation,we summarizes four problems of RMB settlement in cross-border trade:first,the micro foundation is not stable.Second,the development of RMB settlement of cross-border trade is restricted by China's international regional network for division of labor.Third,there is speculative bubble in RMB settlement in cross-border trade.fourth,there is a disparity between RMB settlement and invoicing in cross-border trade.Chapter three is the empirical analysis of the micro foundation of RMB settlement in cross-border trade.According to the differences in data accuracy and data characteristics,We use a variety of econometric models to empirically analyze the micro foundation of RMB settlement in cross-border trade.Based on the above analysis,we not only grasp the micro influencing factors,but also further discuss the four existing problems of RMB settlement in cross-border trade in the second chapter.Chapter four is an analysis of the development potential of RMB settlement in cross-border trade from the perspective of international region division of labor.The first section investigates the currency internationalization,settlement currency selection in cross-border trade and the circulation scope of international currency from the perspective of international region division of labor.Secondly,based on the relevant theories of GVC,the second section examines China's international region division of labor.Finally,following the research paradigm of the second section,the third section analyzes the development potential of RMB settlement in cross-border trade and its international region structure.Chapter five is the arbitrage mechanism of RMB settlement in cross-border trade and its time-varying characteristics.The first section provides objective evidence of arbitrage in RMB settlement in cross-border trade.The second section constructs a flow model of RMB settlement in cross-border trade,and conducts a theoretical analysis of the arbitrage mechanism.The third section uses SV-TVP-VAR model to examines relevant research conclusions in the second section,and the time-varying characteristics of arbitrage mechanism.Chapter six is an analysis of the impact of RMB settlement in cross-border trade on monetary policy transmission mechanism.This chapter introduces the characteristics of the divergence between RMB settlement and pricing in cross-border trade into NOEM,and investigates how RMB settlement and pricing in cross-border trade affect the domestic and foreign monetary policy transmission mechanism.Furthermore,based on welfare standards,we discuss the monetary policy coordination between international and non-international monetary issuing countries.Chapter seven is the research conclusions and policy recommendations.This part systematically summarizes the research conclusions of this paper,and puts forward a set of policy recommendations based on these research conclusions.