Research Of Renminbi Internationalization Based On Offshore Financial Market

Since300years ago when human society entered the era of sovereign currency, theinternational influence of currency would always continuously grow along with economicboom of a country. With the economic crises broke out in the year2007, the drawback ofcurrent international money system where US dollar is dominated currency has beenexploded. Therefore, the dominated political position of US dollar and Euro got impaired.As the second economic entity in the world, China has tremendous potential with whichRMB becoming international currency will be the key direction for future economicdevelopment. At the meantime, RMB currency internationalization will be the one of keypoint in the future. Based on the current situation of finance development, constraints offinance policy and the position of RMB at regional trading settlement, the best approach topromote the internationalization of RMB relies on offshore financial markets. This thesisoutlines the development situation of RMB in Hong Kong, London and Singapore in termsof development advantages as well as challenges. In other aspect, it explains how othercountries promoted the currency to offshore financial markets, aiming to analyze theimpact of offshore financial market on RMB internationalization. Furthermore, in thesection of empirical analysis, RMB internationalization index is used to measure thedegree of RMB internationalization. By establishing an empirical model, a positiverelationship between offshore financial market and RMB internationalization comes to aconclusion. In order to improve and develop the construction of RMB offshore market inall over the world besides HK, feasible policy and suggestions are proposed by aggregateanalysis of three aspects which are theoretical, econometrics, and empirical aspects.