An Empirical Study On The Internationalization Of Currency To Promote The Function Of Financial Center

Since the introduction of The Opinions of the State Council on Constructing Shanghai International Financial and Shipping Centers at Apr.,2009, the construction of Shanghai International Financial Center has made remarkable achievements. But as the target is to build an international financial center which matches China’s economic strength, there is still a long way to go. Therefore, to study the inherent laws and related practices for the main developed countries’currency internationalization how to promote function of the financial center; it is great significance for promoting and constructing the international function of Shanghai financial center with the RMB internationalization bringing some favorable opportunitiesBased on combing and learning the theory of currency internationalization and financial center, this article probes the relationship between the international currency and international financial center functions with the empirical analysis. It briefly discusses currency internationalization how to promote the function of financial center using the perspective of macro-and meso-mechanism, and has a simple analysis of the measure degree of currency internationalization and financial center through a model, and select representative indicators quantify the currency internationalization and financial center. Granger causality test has been carried out the ratio of3currencies’(i.e. USD, GBP and JPY) among foreign exchange reserves and foreign exchange transactions between the ratio of global financing volume and annual transaction volume or non-The resident enterprise market capitalization for their financial center’s stock market respectively. It also has carried out a Granger causality test between the ratio of RMB among foreign exchange transactions and financial center’s stock market of Shanghai. The test results indicate, in case of accelerated currency internationalization, enhanced or more consolidate status of currency internationalization, the mutual causal relationship has been existed between the currency internationalization and the stock market of financial center, or the former caused the latter change. The RMB internationalization can cause Shanghai stock market positively changing. But in the case of international currency weakened or recession, the performance of causality relationship between the currency internationalization and stock markets of financial centers is not obvious. Meanwhile, this article summarized the practice of internationalization of main currencies to deepen the function of international financial center, and raised suggestions particularly for Shanghai.On this basis, it analysis how can RMB internationalization deepen the function of the Shanghai international financial center, and educe that they complement each other. There are fundamental conditions for deepening the function of Shanghai international financial center such as trading party, market platform, infrastructure, and RMB internationalization etc. At the same time, there are also several limitations including financial openness not enough, lack of financial innovation and talents. Therefore, this article puts forward the directional suggestion for further deepening the function of Shanghai international financial center, which Shanghai should be built as the center of RMB global asset liquidation, RMB offshore financial and RMB global wealth management. Finally, it raises strategic suggestions to achieve these functions:(1) To build RMB global asset liquidation center by speeding up the Market-oriented reforms of the RMB interest and exchange rate;(2) To build the construction of the RMB offshore financial center by financial innovation;(3) To enhance financial innovation and attraction of institutions so as to build global RMB wealth management center.