Settlement Of Chinese Cross-border Trade

RMB settlement of Cross-border trade means that RMB is used as the settlementcurrency, and that it is allowed for the qualified foreign investors to do investmentdirectly with RMB in China. The launching of the pilot RMB settlement ofCross-border trade of China is an important and historic strategic measure to copewith the international financial crisis and to drive the exports.In2008, the defect of the current international currency system was shownbecause of the international financial crisis caused by the US sub-prime crisis. Andduring the crisis, the exchange rate of the main international currency, such as thedollar and the Euro, fluctuated wildly, which brought great exchange rate risk to eachcountry all over the world. So it has been being the hottest topic how to decrease thedependence on Dollar settlement to reduce the impact of the exchange rate risk oneach country’s economy. Meanwhile, after being one member of the WTO, theeconomic strength of China has been enhanced constantly to be No.2of the GDP andNo.1of the total amount of the foreign trade all over the world. So that, to a certainextent, RMB has circulated in the border areas of the surrounding countries beingused as the settlement currency. In the dual context, in April8,2009, the StateCouncil decided to launch the pilot RMB settlement of Cross-border trade in fivedomestic cities Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan, and in someforeign areas, such as Hongkong, Marco, and ten countries of the Association of theSoutheast Asian Nations. The ASEAN, as one of the first pilot areas, provides usprecious experience of the RMB settlement.In the perspective of RMB settlement of the China-ASEAN Free Trade Area,and with the combination of the literature and the qualitative analysis, this thesis willstart with the reality to fully analyze the current status and the obtained achievementsof the RMB settlement of Cross-border trade, and propose some countermeasures topromote it, in accord with the existing problems.