The Empirical Analysis On The Economic Factors Of The Cross-border RMB Trade Settlement

International trade plays a pivotal role in the national economy. Maintaining the sustained and healthy development of International trade is essential to economic and social development of the country. China’s foreign trade has two problems, one is the high proportion of U.S. dollars in trade settlements, another is the overweight ratio of dollar assets in foreign exchange reserves.In recent years, the U.S. dollar continued depreciation forces China’s foreign trade enterprises encounter greater exchange rate risk. In the mean time, the central bank’s foreign exchange reserves shrink sharply. The key to solve the problems is to reduce the dependence on U.S. dollars in international trade, cut down the proportion of U.S. dollars,improve the RMB’s status in foreign trade settlement, and vigorously promote the internationalization of the RMB.The first part of the article focuses on the internationalization of RMB under the background of macro and micro economic environment, as well as the development of cross-border trade settlement in RMB in the current situation. We also show the analysis of the achievements of cross-border trade settlement in RMB development in recent years and the problems encountered. Affected by the appreciation of the RMB and the weak recovery of world economy, China import and export enterprise production and management costs continue to rise, coupled with the background of the global financial crisis, the depreciation of main settlement currencies, increasing import and export exchange cost, strengthen the willing of import and export enterprises for choosing trade settlement in RMB.We will use vector auto regression model(VAR) method to study the dynamic relationship on the fluctuation of RMB cross-border trade settlements, money supply fluctuations and exchange rate fluctuations, tries to reveal the relationship between them. Rearch result shows that there is a long –term equilibrium relationship among Cross-Border Renminbi trade settlement quantity fluctuations and money supply fluctuations, exchange rate fluctuations. In a long term,as for Cross-Border Renminbi trade settlement quantity fluctuations, exchange rate fluctuations has a positive effect in promoting Cross-Border Renminbi trade settlement quantity fluctuation, but money supply fluctuations has a negative effect in promoting it.The result of Granger causality test indicate that Cross-Border Renminbi trade settlement quantity fluctuations are the one-way Granger reason of money supply fluctuations and exchange rate fluctuations. exchange rate fluctuations is the one-way Granger reason of money supply fluctuations. The result of impulse response function shows that the response from Cross-Border Renminbi trade settlement quantity fluctuations on its own impact is the most intense among three kinds of impacts. The response from money supply fluctuations on three kinds of impacts is more intense.The response from exchange rate fluctuations on its own impact is the most intense among three kinds of impacts.To promote the development of cross-border RMB trade settlement is a systematic project, needs the government, bank, enterprise’s mutual cooperation, mutual coordination, jointly promote. Not only to summarize the existing problems in the development of timely, but also draw positive experiences and lessons from the world’s major currencies in trade settlement,finally have a deep understanding of yourself as well as the enemy. The development of RMB settlement of cross-border trade is a gradual developing process, the RMB to become an important currency in international trade settlement needs systemic design and precise, and clear development path.