A Study On China’s Cross-border Trade RMB Settlement Situation And Its Influencing Factors

In recent years, with the further development of economic globalization, the economic strength of China is growing constantly, China has become the world’s second largest economy, foreign trade of China is continuously expanding, and the value of RMB is very stable, which makes a certain basis and conditions for RMB going out. The RMB, however, does not belong to the widely used international currency in the current dollar-dominated international monetary system, and its international status is not consistent with China’s remarkable economic status. On the other hand, the international financial crisis fully exposed the deficiencies of the current international monetary system, international society calls for the reform is higher and higher. The grim international economic and financial situation provide the opportunity for our country to take an active part in promoting the reform of the international monetary system. In this context, the RMB internationalization has become the objective requirement of the development at home and abroad.In the90s, some scholars started theoretical research and discussions on the internationalization of the RMB. They argued that, to become an international currency, RMB has to become an international currency first. Cross-border trade RMB settlement, as the first step to the RMB internationalization, was formally pilot in July2009, which marked the RMB internationalization entering a substantive stage. So far, cross-border trade RMB settlement has been more than four years of implementation, during the four years cross-border trade RMB settlement achieved rapid development, and settlement region and scale expands unceasingly. Cross-border RMB trade settlement still has a huge development potential in the future. However, in the process of its development, there are a lot of problems such as the overall size is small, as well as the import and export structure and regional structure are imbalance, etc. Therefore, learning the status of the development of cross-border trade RMB settlement, analyzing the problems existing in the development process and researching the influencing factors of its development has very important practical significance, which is the very purpose of this study.First of all, in this paper, the research background and significance, research contents and methods of cross-border trade RMB settlement are briefly introduced. Then, international trade settlement currency choice theory and existing RMB settlement literature are expounded systematically. On the basis of theoretical study and combining the actual situation of China, this paper drew a conclusion on influencing factors of cross-border trade RMB settlement mainly from the aspects of theory analysis, through the establishment of the VAR model, impulse response analysis and variance decomposition, empirical research are carried out. Through theoretical and empirical research, this paper mainly draw the following conclusions:(1) China’s cross-border trade RMB settlement is influenced by many micro and macro factors. The main influence factors includes China’s share of world trade, the appreciation of RMB, interest rate spread and the inflation rate spread of China and America, RMB offshore market development degree and so on.(2)There are long-term equilibrium relationships between cross-border trade settlement amount in RMB and China’s share of world trade, the appreciation of RMB, interest rate spread of China and America, the inflation rate spread of China and America, RMB offshore market development degree.(3) Cross-border trade RMB settlement amount and China’s share of world trade, the appreciation of RMB, interest rate spread, as well as offshore RMB market development degree Show the same change trend. The rate of inflation spread of China and the United States show changes in the opposite direction.(4) For the changes in the amount of cross-border RMB trade settlement, the explanatory power of appreciation of the RMB rate is the strongest and explanatory power of interest rate spread was second, both finally explain47%. China’s share of world trade was third in explanatory power. In addition, the explanatory power of inflation rate and RMB offshore market development degree gradually decline with the extension of time, maintaining at about2%Finally, aimed at reality and empirical analysis result of influence factors, this paper gave related policy Suggestions to promote the development of China’s cross-border trade RMB settlement mainly from promoting economic development, improving the RMB exchange rate formation mechanism, expanding the financial market openness, vigorously developing the offshore RMB market and promoting trade facilitation.