The Research On Rmb Internationalization

With the rapid growth of comprehensive national strength of China and the gradual enhancement of RMB's international status, the issue of RMB's internationalization has drawn great attention. Meanwhile, the tentative and applicable approach by which RMB becomes an international currency has been the current research focus. Firstly, the thesis gives an overall and systematic description of theories in currency internationalization, the current status, political and economic significances of RMB's internationalization, and sets of positive factors that promote the internationalization of RMB. Secondly, by analyzing the interrelations between offshore financial market and currency internationalization, the proposition of accelerating RMB's internationalization through developing Hong Kong RMB offshore financial market is raised. Meanwhile, relative measures as to facilitate the development of Hong Kong RMB offshore market are given, including:further consolidate and promote the RMB settlement in trade between Hong Kong and mainland China, establish and develop a multi-level RMB offshore financial market by cultivating the RMB loan and bond businesses etc. Besides, regarding the impact the future RMB offshore business could make on domestic macro economy and financial policies, the thesis also provides preventive measures to combat the potential risks in the short and long term.The Internationalization of a currency refers to the widespread use of a currency outside the original country in which it was created for the purposes of conducting transactions between sovereign states. So is the definition for RMB internationalization. The RMB internationalization helps to elevate the political and economic status of China on the World's stage, avoid exchange rate risk, obtain Seigniorage and promote the diversification of International Monetary System. Nowadays, RMB has been used widely as the denomination currency and settlement currency on the cross-boarder trade. Besides, the internationalization of RMB is also promoted by the emergence of currency swap with other countries and regions, and RMB bonds issued in Hong Kong. On April 2009. the cross-boarder trade Settlement in RMB was officially approved, which lays a good foundation for the promotion of RMB internationalization,The Third Chapter of this thesis starts from the general description of offshore financial market and then made a deep analysis of the interrelations between offshore financial market and currency internationalization. From the case of Yen's Internationalization, it is concluded that the offshore financial market is an important impetus for currency internationalization. So that, the proposal of promoting RMB internationalization through establishing and developing Hong Kong RMB offshore financial market is raised.Hong Kong, as a well-known international financial market, has accumulated a variety of advantages in geography, transportation, economic openness, law and regulations. With the current wide-spread use of RMB, Hong Kong was no doubt the best market to develop RMB offshore business. Based on all the positive factors demonstrated, it is concluded that we should utilize the advantages to promote the RMB internationalization.For the next part, the thesis focuses on how to gradually develop the Hong Kong RMB offshore market. Firstly, the positioning of the RMB offshore market is suggested. Secondly, it is suggested that we should consolidate and enhance the RMB settlement on cross-boarder trade. Meanwhile, we should develop a multi-level Hong Kong RMB offshore financial market through launching RMB loan and RMB bond businesses.Considering the potential impact and risks stemming from the establishment of RMB offshore financial market, the thesis also makes analysis of financial security problems in the short and long run. At the meantime, possible precautionary measures are raised to avoid and alleviate the potential problems.