The Diversification Of Chinese International Settlement Under Background Of The Appreciation Of RMB

People's Bank of China announced on July 21, 2005 that from that very date on, a managed and floating exchange rate system, based on supply and demand and adjusted according to a basket of currencies, would be implemented in China. Since that day, the exchange rate between RMB and US dollar has been on a steady increasing, which will surely have a great influence on china's foreign trade as well as the international settlement. Thus, it becomes an unavoidable issue for the Chinese imp.& exp. enterprises to deal with the pressure of RMB's appreciation and the risks during international trade settlement.This paper has further studied the short term trend of RMB's appreciation, the traits of various traditional ways of international trade settlement and the problems arising in respective practices in the context of the RMB's appreciation. It then puts forward the cause and advantages of the diversification of international settlement and the impact of RMB's appreciation on it. Based on the author's experience, it afterwards advances the idea of the diversification of Chinese international settlement with the focus on new and comprehensive ways of trade settlement such as international factoring with the aim to offset the risk of RMB's appreciation and to boost up the competitive advantages of Chinese enterprises. In the last part, it offers some feasible measures and suggestions for the reference of Chinese enterprises as well as respective government sections.The innovation of the paper lies in that it offers an idea of the diversification of Chinese international settlement from a new perspective with an emphasis on new ways such as international factoring to offset the risk of RMB's appreciation and to boost the competitive advantage of Chinese enterprises, which can hardly be found in former relative literatures. Therefore, the paper may also be a guide in trade practices in this sense.