The Motive Mechanism And Policy Choice Of Setting Up RMB Offshore Center In Shanghai

In recent years, with the acceleration of the process of internationalization of the RMB, and the growth of RMB cross-border capital flow, the establishment of RMB offshore center is coming to a substantive progress. Shanghai, which takes "four centers" as the goal and has a considerable foundation at this time, it’s a great opportunity that Shanghai has to take to establish and develop the offshore financial market. As for the necessity of Shanghai to establish the offshore financial center, many scholars have discussed, but specifically, what shortcoming does Shanghai have to develop offshore center? And does Shanghai have a strong enough power system to promote Shanghai to the offshore center? This is the main problem to be discussed in this paper.Firstly, this paper analyzes the developing experience of international offshore center, summarizes their similarities, and does the correlation analysis on the London’s development, prove that the internationalization of its currency and development of financial agglomeration level, industry internationalization, financial liberalization and some other factors could play a good role in the development of the offshore center. While in Shanghai, due to lack of the opening of the domestic financial market, many institutional factors restrict the development of the offshore market in Shanghai. But the development potential of Shanghai is still beyond doubt. This paper constructs a dynamic mechanism of the development of Shanghai offshore financial center, from the macro and micro angle this paper proves the dynamic mechanism of Shanghai and the way it functions. Secondly, according to the the dynamic mechanism, this paper put forward the development path that Shanghai should abide to establish the offshore center, ascertains the target mode of Shanghai is the offshore center and the domestic financial center, and becoming the RMB products center in5to10years. Enlarge various types of financial markets occupation, and consolidate the domestic financial center, start to form a regional offshore financial center. But before the RMB capital account is open, the advantage of Hong Kong offshore financial centre should maintain, make sure its RMB offshore market functions. And strengthen the financial cooperation between Shanghai and Hong Kong. Finally, as for the supervision, tax and the linkage between Shanghai and Hong Kong, this paper puts forward some related policy recommendations, in order to be able to release the biggest potential of Shanghai.