The Influence Of The Hong Kong Construction Of Rmb Offshore Financial Market And The Analysis Of The Rmb Backflow Way

The establishment of offshore financial markets is an important step towards the internationalization of the RMB, Hong Kong banks to provide RMB deposit-taking business from February25,2004, which marks the Hong Kong became the first RMB offshore Market. Hong Kong as an international financial center, has a good location, and for many years maintained a trade cooperation and financial cooperation with the Mainland, is the best choice of the offshore financial market. Around the construction of the offshore market in Hong Kong, is also in Singapore, London and Shanghai to develop into an offshore RMB market.China should learn from the experience of failure in the Japanese construction yen offshore markets, and carry out bilateral trade with the neighboring countries, increasing the proportion of settlement in RMB. With the opening up of the RMB trade settlement experimental cities, the scale of RMB deposits in Hong Kong is gradually increasing. However, due to the lack of reasonable RMB reflux mechanism, can not improve the overseas market demand for the renminbi. RMB flows to outside means to reduce the domestic money supply in China.Backflow channel must be established to carry the RMB back. The best ways of many backflow methods are the renminbi-denominated bonds and RQFII. The effect will be more obviously, with the increase of circulation of two kinds of financial products. The development of offshore markets also carries in some financial risk. We must supervise strictly to prevent speculative capital into Mainland through normal channels, to avoid a large number of illicit capital flows impact on China’s economy.