Study On Construction Of Shanghai RMB Offshore Market Based On International Experience

With the development of economic globalization, financial integration has also been deepened. The establishment of offshore financial market has become the most international initiatives. Till now there are some major offshore financial markets like London, New York, Tokyo and Hong Kong. Each of them has brought enormous benefits and convenience for the relevant countries and even led to the leap of country’s economy. Among them the International Banking Facility in New York and Japan Offshore Market in Tokyo are two special offshore markets which operate their own offshore currency and this effectively promoted their respective financial reform process.China is currently the world’s second largest economy. RMB is increasingly welcomed by all countries, especially in Asia-Pacific region has achieved RMB multinational direct settlement of trade and investment. As a developing country construction of offshore financial market is a necessary way to promote currency internationalization. So it is being more and more important to learn how to build the offshore market successfully. Now RMB offshore market dominated by Hong Kong, Singapore supplemented, together with London and New York. All of them are in rapid development but during this process there also revealed some common limitations, so the theme whether should follow America to build our own domestic offshore market for RMB has a realistic significance.In this paper used the standard research method, firstly within the context of international offshore market selected two of the most important domestic offshore market-International Banking Facility and Japan Offshore Market to conducted a further analysis which including the development of them, the market design, impact they have made and some trouble they caused. On the basis of the analysis,analyzed the current status of RMB offshore markets which including the degree of internationalization of RMB and the limitations of existing offshore market.This provide a good development opportunity for domestic RMB offshore market. In addition Shanghai now has a good urban condition and has the offshore RMB business pilot. Therefore, the construction of Shanghai RMB offshore market has a practical feasibility. After this analyzed the expectation of Shanghai RMB offshore market which including the related business requirements and risks, as well as that construction of Shanghai RMB offshore market will have far-reaching positive impact on China’s economic and financial generated.And this market will promote the internationalization of RMB, enhance the internationally financial competitiveness, promote trade and economic relations with neighboring countries, drive "Going Out" strategy, practice capital account openning and promote the formation of an offshore currence trading center. Then made a conclusion that the establishment of the RMB offshore market in Shanghai is feasible and reliable.At last combined the foregoing analysis extracted some useful international experience for China and gave out some proposals including mode selection for the market, tax policy building, financial deregulation policies, effective regulatory system building, reasonable regulation of market access, expansion of business scope and coordination with onshore financial reform.The innovation of this paper is that combined the latest data and information made a systematic analysis for the necessity and feasibility of establishing Shanghai RMB offshore market. Besides, combined with international experience made some useful proposals. The week point is that the research is still at a macro level, fail to make further analysis about the specific institutional settings and operational process This surely will be the direction of continue effort.