Research On The Backflow Mechanism Of Offshore RMB

Establishing the unhindered Offshore RMB backflow mechanism is anessential part of improving RMB cross-border flow, as well as a necessarychoice for our country to expand the overseas use of RMB and promote theinternationalization of RMB. Offshore RMB backflowing not merely boosts themobility of RMB, promotes the development of the offshore yuan market, but italso provides power to consummate the domestic captial market.Simultaneously, it puts forward higher request on the development of financialmarket and the management level of foreign exchange, on which we shouldfocus on. Therefore, it is necessary to explore how to establish an unhinderedand orderly offshore RMB backflow mechanism.This paper discuss the issue about how to establish offshore RMBbackflow mechanism from the views of the necessity and the fessibility.First ofall, this paper analyse the necessity through historic experience and marketentity of international currency and draw a conclusion that currency backflow iscrucial to internationalization of the currency, and the demand of principal parttowards RMB backflow has become much stronger currently. Hence, it isinevitable to establish Offshore RMB backflow mechanism. Secondary, thispaper explain the fessibility of the construction of RMB back mechanismthrough construction of the policy and the development of the market, includedthe policy framework about promoting the cross-border RMB trade settlement,development of offshore renminbi bond market and offshore RMB investmentin the mainland capital market. Besides, it also discusses the policy concerneddevelopment of financial tools and means of settlement what the marketprovided. And then, analyse the main factors of restricted and influenced thedevelopment of Offshore RMB backflow mechanism. At last,based on the above analysis, offer a further recommendation on how to promote theconstruction of Offshore RMB backflow mechanism.