Research On The Legal System Of The Offshore RMB Capital Back-flow

A financial crisis broke out in2008, highlighting once again the great drawbacksof the dollar-standard system of international financial and monetary system. TheChinese government realized that relying on dollar excessively had a great financialrisk in the field of international trade and investment, and therefore, due to forces bothhome and abroad, the Chinese government began to push forward theinternationalization of RMB actively. Whereas, at present, the channels of offshoreRMB flow-back are not so smooth, which has become a major obstacle to offshoreRMB circulation and use in the course of the internationalization of RMB. Therefore,this paper undertakes legal research on the legal system of offshore RMB flowingback in the perspective of the RMB internationalization, and is of great theoretical andpractical significance for the monitoring and supervision of cross-border capital flow,dealing with the relationships among financial innovation, financial liberalization andfinancial supervision.Currently, China is launching and broadening the channels of the offshore RMBcapital flowing back to magnify circulation and investment of the offshore RMB.With the broadening of the channels, including the RMB trade settlement, cross border financial investment, stock, bond and funds, deposit and loan so on, the largeflowing back of the offshore RMB capital will lead to a series of legal risks and issues.Under the conditions, the author uses the basic theories of financial law to deeplyanalyze and discuss the above legal issues, risk control and counter-measures. This isof great significances for smoothly promoting the RMB internationalization strategy,accelerating the construction of the regulatory mechanisms of the offshore RMBcapital back-flow, reducing financial risks. This paper argues that, to achieve theinternationalization of the RMB, a stable legal protection mechanism required by theCapital Account Liberalization must be built. Together with expanding channels of theoffshore RMB to invest in the domestic capital market gradually, we shouldstrengthen the financial risk prevention, and construct the regulatory mechanism ofthe offshore RMB capital back-flow.The following is the basic skeleton of this paper:Chapter1focuses on analysis on the issues of offshore RMB capital back-flowand its supervision significances. The relationships among the internationalization ofRMB, capital-account liberalization, the offshore RMB backflow are discussed in theperspective of RMB internationalization strategy, and the relevant core concepts aredefined, which then leads to a research on legal issues of offshore RMB back-flowand its regulatory significances in theory and practice.Chapter2conducts analysis on the legal issues existing in offshore RMB capitalback-flow. Firstly, through researching all the relevant law and regulations of everyback-flow channel, the paper sets up the legal support for the legal issues of thepresent channels of offshore RMB back-flow and potential risks. Secondly, it analyzesthe actual drawbacks of those channels. Finally, suggestions to improve the channelsof the offshore RMB back-flow in large scale from macro and micro angle areproposed.Chapter3provides analysis on the legal issues of the offshore RMB capitalback-flow’s risk control.This chapter will be divided into three sections. Firstly, thepotential risks resulting from the offshore RMB the flowing back largely are analyzed.Then, the corresponding countermeasures against those risks are put forward. Finally, with reference to similar foreign institution regulatory experience, how to find theway to construct the risk-monitoring mechanism of the offshore RMB capitalback-flow is discussed.Chapter4mainly discusses the legal issues of anti-money laundering in theprocess of the offshore RMB capital back-flow. Firstly, the money launderingresulting from the offshore RMB capital back-flow is analyzed. Secondly, theexperience of the foreign matured legal system in anti-money laundering is researched,and the shortcomings China’s practice in this area is contemplated. Lastly, suggestionis made on improvement of China’s legal system of anti-money laundering in thecourse of gradually broadening the channels of the offshore RMB capital back-flow.