Construction Of Offshore Financial Markets In Hong Kong And The Mechanism Of RMB Back

With China’s political and economic power growing, growing import and exportcapabilities, scope and scale of the RMB in the international market began toexpand.China has played a role in certain areas of international currencies.China isgradually exploring the reform of the economic system, and will show the real Chinato the world slowly.In this context, the efforts of Hong Kong’s offshore RMB marketdevelopment is very good, and made a very significant achievement.With theincrease in offshore RMB, imperfect RMB back mechanism, the RMB stranded inHong Kong will affect the implementation of China’s macroeconomic controlpolicies and central bank monetary policy in a bad way, and will have a significantimpact on the RMB internationalization strategy.This articles analysis the offshoreRMB for Chinese money supply’s affect, pointing out the importance of improvingthe RMB back mechanism for the internationalization of the RMB,future strategy ofthe government’s macroeconomic policy and other aspects of implementation.From2008,although a lot of people began to hold the RMB, the offshore RMBinstead began a negative impact on generalized RMB.There are three possiblereasons. First, RMB did not play out the money multiplier effect, but simply fromthe territory of the outflow, resulting in decreased total supply of RMB. Second,Hong Kong offshore financial markets established short time, has yet to play a realvalue. Third, the importance of a complete RMB back mechanism.The first part is the introduction, an overview of the theoretical significance ofthe topic,the practical significance of the relevant literature on domestic scholarsdoing research this issue are reviewed. The second part is the offshore financial markets’s brief overview and theanalysis of the development of offshore financial markets and categoriesgenerated,studied the advantages of the establishment of offshore financial marketsin Hong Kong.The third part analyzes the impact of the Chinese RMB deposits in Hong Kongon the People’s broad supply.To empirical analysis concludes: Currently RMBdeposits in Hong Kong increased have bad effect on the supplied of Chinesemainland RMB, if it continues to maintain the status will likely impact on theChinese economy, making social unrest, reflects the importance of a complete set ofRMB back mechanism.Part four detailed analysis the various channels of circulation of RMB, China’scross-border trade settlement pilot is constantly expanding, making a good livingstandard,the travel abroad people is also increasing year by year,the number ofpeople on his country’s direct investment is also growing. RMB back severalchannels, the export trade settlement is still the most important part, FDI with RMBbonds are constantly improve and mature. Solve the problem allowing the RMBoverseas to return, to promote cross-border circulation of RMB,in order to achievegreatness RMB internationalization strategy.By summing dollar, the yen and theeuro’s experience, summed up some of the preconditions of RMB back system: First,RMB back mechanism requires a powerful economic entity as its cornerstone.Second, demand for more extensive trade. Large-scale trade more extensive andhope the more cross-border RMB settlement, RMB back mechanism can be moreexcited. Third, improve the financial system and constant innovation. Fourth, policysupport. Fifth, the RMB appreciation expectations.Finally, the conclusion.From the real economy, financial investment and policyaspects of RMB back in three auxiliary channels for discussion. Further strengthenimport and export-based offshore RMB settlement, reducing obstacles to FDI and improve the quality of service in order to enhance the impact of the RMB, the RMBfreely convertible to accelerate cross-border business development, deepen offshoreRQFII channels, tax breaks and possible monetary policy the amount of change inrisk prevention. With the continuous development of Hong Kong’s RMB scale,China began to pay attention to control a substantial increase in offshore RMB in theshort-term, supervision and management of offshore RMB market in Hong Kong, inorder to avoid fluctuations in the domestic money supply caused by severe shocks.