A Research On The Rmb Direct Settlement Between China And Vietnam’s International Trade

After the international financial crisis, the status of U.S. dollar was weakened in some degree, there was a strong voice around the world that called for a reform of the international monetary system, and ever nation wanted a better system. In order to deal with the impact of the crisis, the developing countries begin to use domestic currency in the bilateral international trade. With this background, RMB direct settlement attracts lots of attention. Vietnam has a preference for RMB, and RMB settlement has become the main settlement currency in the frontier trade. With the growth of the China-ASEAN free trade area, the RMB direct settlement will develop as well. In this context, the paper will research on the RMB direct settlement between China and Vietnam.At the beginning, the paper summarizes the main points of the foreign and domestic scholars. By summarizing the theories about currency of settlement, we have the frame of the paper. Besides, the paper shows the differences between direct and indirect settlement, and discuses the advantages and disadvantages of each method. We think that there is no absolutely good or bad between these two methods, but they are suitable for different circumstances. This paper shows the current situation of the RMB settlement with Vietnam, including the proportion of the settlement, the process of the settlement and the formation mechanism of exchange rate. We believe that the RMB direct settlement will develop more under the background of financial crisis, and RMB direct settlement will replace USD settlement in a degree. By studying the theories about currency of settlement, the paper suggests that RMB has preference to viet-namese dong, and RMB ought to act as the main currency in the direct settlement. However, the RMB direct settlement is faced with many difficulties as well. In order to deal with these difficulties, the paper draw lessons from the JPY settlement and the direct settlement between China and Russia, and shows the way of developing RMB direct settlement. In order to make it better, we must improve the foreign exchange rate system and the RMB back-flow channel, make frontier trade settlement more regular, and improve the intention of RMB settlement in general trade.