The Effect Of RMB Cross-border Settlement To The Imbalances Of China’s International Payments

In the last three years, the RMB cross-border settlement business progresses smoothly, on the one hand, it can make the Chinese import and export enterprises to avoid exchange rate risk, reduce the cost of exchange, and it is conductive to promoting China’s export growth; and on the other hand, the RMB cross-border trade settlement and the RMB direct investment’s development would inevitable impact the economic balance both at home and abroad.Therefore this article summed up the purpose of BOP on the occasion of the cross-border RMB settlement in the last three years. This paper combines the idea of the National12th Five-Year Plan which want to promote a more balanced international balance of payments and foreign trade, draws on the theories of international payments and settlement currency choice, and then analyzes the developing trend based on the data in last more than two years.On this basis, the paper also analyzes the role of the future developing trend of the RMB cross-border settlement to China’s international balance of payments, summarizes the significance of the United States has adopted the U.S. dollar clearing but still lead to external imbalances to China, and also explored the effect of euro as the regional currencies to the national balance of payments in the background of the Europe the debt crisis. Finally, against the problem of the RMB cross-border settlement now and learn from the other countries makes his currency international monetary, I suggest some corresponding policy recommendations.This paper is divided into five parts. The following is an overview of the content of this paper.The first chapter is the introduction part, this chapter made a presentation to the research background of full text and described in the literature review. The background of this study is RMB cross-border settlement measures in the international financial crisis. For the the literature part, I summarized from three angles respectively, they are choice of international settlement currency, the balance of payments and the RMB cross-border settlement affect China’s international balance of payments imbalances.The second chapter provides an overview of the status of the business of RMB cross-border settlement, including the development of RMB cross-border clearing both in domestic and overseas, also the situation of financial institutions which carry out the RMB settlement.The third chapter studies the impact of the RMB cross-border settlement to China’s international balance of payments in main items, including the impact of China’s current account, capital and financial account and the China’s foreign exchange reserves. Then split the subprojects further to studies the details impact, such as the trade in goods, trade in services, direct investment, portfolio investment and other investment.The fourth chapter studies the role of the development of the RMB cross-border settlement to China’s international balance of payments, including the RMB two-way direct investment settlement will enable the foreign exchange reserves controllability more flexible, the construction of the offshore financial center can perfect the mechanism of the RMB back, RMB gradually regionalized until towards the international monetary may enhance the initiative to adjust the imbalance. What’s more, the significance that The United States has adopted the U.S. dollar clearing still lead to external imbalances to China is important. From Europe’s debt crisis we can find the impact on the national balance of payments when use of regional currencies.The last chapter gives some policy recommendations to promote China’s international balance of payments. Mainly to improve the proportion of cross-border trade in higher yields and have a comparative advantage industry, further encourage the RMB in the direct investment projects to go out and bring in, gradually establish and improve the RMB bond market, gradually adjust the economic structure of our internal at the same time.