The Research Of The Linkage Between China's Capital Market Opening And The Internationalization Of RMB

Since the reform and opening up,Chinaundefineds economic strength has been growing,the total size of the economy has surpassed Japan since 2009,becoming the second largest economy in the world after the United States.After the economic crisis in 2008,the domestic and foreign economic situation is complex and changeable,our country through the supplyside structural reform further deepening,along with the implementation of "Belt and Road" strategy,as well as a series of financial reform measures,Chinaundefineds economy grew by 6.7 percent in 2016,and GDP is expected to grow by about 6.9 percent in the first quarter of 2018.However,in order to maintain the steady and sustained development momentum,China must change the mode of economic development and develop new power of financial market.As the foundation and core of financial system,capital market is the inevitable choice to promote the opening of capital market.With the development of Chinaundefineds economic strength,the internationalization of the RMB has become a hot issue.After the RMB formally joined the SDR(Special drawing Rights)on October 1,2016,the RMB has been recognized to a considerable extent by the international community.The renminbiundefineds position in the global money market has improved significantly.In spite of this,the internationalization level of the RMB is still extremely low.At present,it has not gained international influence and international status commensurate with Chinaundefineds economic strength,nor has it become the major reserve currency of most countries.Promoting the internationalization of RMB is an urgent need in the international context.The opening of capital market and the internationalization of RMB can be said to be inextricably related,and they are also the direction and goal of the reform of Chinaundefineds financial system.What is the specific connection between the opening of capital market and the internationalization of RMB? This is the focus and significance of this study.This paper theoretically analyzes the influence mechanism between the opening of capital market and RMB internationalization,and analyzes the process and characteristics of capital market opening and RMB internationalization qualitatively.In order to make the connection between capital market opening and RMB internationalization more persuasive,this paper also carries on the empirical analysis from the quantitative angle,studies the concrete correlation between the capital market opening and the RMB internationalization.Through the establishment of vector autoregressive(VAR)model,this paper selects the index of capital market openness and the RMB internationalization index as the relevant variables to test the correlation between them.By testing,we conclude that the opening degree of Chinaundefineds capital market is relatively low,the impact on RMB internationalization is not obvious in a short period of time,and it has a significant positive effect on RMB internationalization in the long term equilibrium state.Under the circumstance that the current financial market environment is not perfect,the direct investment projects under the financial projects have the highest contribution to the internationalization of RMB.The opening degree of the capital market is low,and the conditions required for the internationalization of the RMB are not mature enough.The following suggestions are drawn: to continue to open the capital market steadily,to enhance the sense of risk,and to promote the construction and opening up of the investment field.Thus enhance the role of capital market regulation,and promote the internationalization of the renminbi.