Research On Outward Foreign Direct Investment In The Development Of The RMB Internationalization

In the second half of 2013, China proposed the Belt and Road Initiative strategy with the views on the orientation of regional cooperation. Recently, with the Asian Infrastructure Investment Bank(AIIB) arose, and the IMF declaring formally that RMB was added into the SDR currency basket, it indicated that the pace of t he RMB internationalization would be accelerated, meanwhile, the foreign direct investment in China would march towards a new phase.Chinese OFDI has increased extremely rapidly from the "Go globally" strategy been decreed to nowadays propelling and deepening constantly the development. As the data displayed from the national business website in 2015 that the non-financial OFDI has created the highest record level by $118.02 billion, an increase of 14.7%. Its growth was in the forefront of the world and it achieved the 13-year continuous growth towards Chinese foreign direct investment. Its average growth per year was beyond 30%. Up to the end of 2015, the stock of Chinese OFDT firstly broke through 300 million mark. In the predictable future, our stock will keep on increasing rapidly.In recent years, the increasing scholars have paid more attention to research on the relationship between Chinese foreign direct investment and the RMB internationalization and the topic about their internal relation appeared in the major news media many times. A good deal of scholars thought that the foreign direct investment was able to quicken the speed of the circulation and settlement of the RBM in the international market and to boost the RBM internationalization, what’s more, the deepening extent of RMB internationalization was able to save the expense of the foreign direct investment and to reduce the risks of the foreign investment. Both of them had the internal relation with the mutual promotion and complement to each other.This thesis is combined with the theory and the demonstration from the point of co integration to study whether or not they have a kind of equilibrium relationship between the foreign direct investment and the RMB internationalization, to validate that they are single relationship or correlation by Granger’s causality tests and to establish the model of the vector error correlation. The empiricism research conductsthat they are the causation relationship. Both of them at least have three co integration relationships and the error correction also accords with the nagactive correction mechanism.According to the actual survey, we can put forward some relevant suggestions. To begin with, the developmental pattern of the RMB internationalization should abide by the step-by-step developmental pattern from the peripheral, to the territorialization, the internationalization, and the developmental path also should choose the trade settltement and the capital export of OFDI and offshore markets. In addition, we can put forward two kinds of measures in promoting the development of the RMB internationalization which are to further promote the RMB foreign direct investment to play a positive part in OFDI towards the RMB internationalization, to strengthen the construct of th RMB offset markets, and to promote the RMB internationalization.