On The Defects Of Rmb’s Recognition Of Trade Settlement Between China And Vietnam

The breakout of U.S. subprime crisis has showed the existing disadvantages and potential risk of the current international monetary system which has taken U.S. dollar as its core, therefore, it is widely appealed by the international community that the monetary functions of other currency should be strengthen. So that the international monetary system can be diversified thus reducing the risk caused by over-dependence on U.S. dollar. Since China has pursued a policy of reform and opening to the outside world, the international influence of RMB has enlarged gradually. Internationalization strategy of RMB has been turned from theory discussion to strategy implementation and the pilot scheme of RMB cross-border trade settlement has run steadily. To promote RMB internationalization, a fundamental problem needs to be solved is how the monetary recognition of RMB in foreign countries can be improved.China and Vietnam are neighbors linked by mountains and rivers and always have closed economic and trade cooperation. So it will be helpful to improve the monetary recognition of RMB in ASEAN countries like Vietnam and Thailand as we take RMB’recognition of trade settlement between China and Vietnam into systematic research.In the first and second part of this thesis, base on summarizing research achievement both home and abroad, the author will study economic strength, development stage of financial markets and currency stability which are major factors to affect monetary recognition. After that, the situation of international recognition of U.S. dollar, euro, yen, pound, Swiss franc and RMB will be comparatively analyzed with Factor Analysis Model. In the third part, the situation of RMB settlement in cross-border trade between China and Vietnam will be analyzed at macro level. Then the situation of RMB’ recognition of Vietnamese micro subjects will also be estimated by descriptive statistical analysis and Analytic Hierarchy Process (AHP) on the base of related questionnaires completed by Vietnamese enterprises and people. With the analyzing and estimating result, a conclusion is made that RMB’s recognition is still not good enough. In the last part, the reasons for RMB’s poor recognition will be analyzed and suggestions to improve RMB’s recognition are made with observation of international monetary practical experience.