Study On RMB Valuation Of Crude Oil On Background Of The Belt And Road Initiative

In recent years,Chinese development has been an important engine of world development.GDP growth rate of China has been maintained at a high level for many years.The rapid economic development makes an increasing demand of China for energy.China has already surpassed the United States as the largest importer of crude oil.The energy trade between China and the "the Belt and Road" countries rich in energy is increasingly tight.China has a huge demand for energy and it is also a big market for "the Belt and Road" countries rich in energy.If we have a look at the current world oil market,Asia is not only the largest oil production areas,but also the area has the largest demand and consumption of oil,while the crude oil pricing center is located in the European and American countries,Asia do not has a worldwide influential price system of crude oil,it also makes the Asian countries suffer from "Asian premium".In addition,due to the fact that there is only one currency,the US dollar,as the main currency of price of crude oil,most oil-producing countries are affected by the risk of the US dollar for a long time.The disadvantages of single currency system are gradually emerging.Oil-producing countries are also actively seeking a diversified pricing system to avoid excessive risks concentrate on one currency.For example,Venezuela,Russia and other oil producing countries have started to use RMB,rouble and other currencies for crude oil settlement,and the trend of "De-dollarization" of oil has gradually become clear.In March 2018,China officially launched crude oil futures priced by RMB in Shanghai,a major step in the RMB valuation of crude oil for China and a great contribution to the establishment of an Asian crude oil pricing center and the promotion of a diversified energy pricing system.With the progress of RMB internationalization,the proportion of RMB in the foreign exchange reserves of countries around the world keeps rising,the function of its valuation and settlement in international trade keeps strengthening,the willingness of countries around the world to accept RMB keeps strengthening China should take the initiative to assume the responsibility of being a big powerful country,and use the "the Belt and Road Initiative" platform to promote the valuation of oil in RMB,and also inject strength into the diversification of international currency.We analyze the oil distribution of "the Belt and Road" countries,the oil trade of China and "the Belt and Road" countries,the currency cooperation and the situation of RMB utilization.We have four main opportunities:the interests of China and "the Belt and Road" oil-producing countries are complementary;Asia do not has a pricing center about oil;the "De-dollarization" trend is gradually spreading worldwide;the internationalization of RMB offer a strong pillar for RMB valuation of crude oil.Difficulties are mainly reflectedin three aspects:the capital control policy will suppress the liquidity of crude oil futures;take "New Triffin's dilemma" into a long-term account;the lack of openness of Chinese financial market,which leads to a difficult backflow of RMB.We also review the evolution history of petrodollar and its backflow.In addition,we analyze new characteristics of petrodollar and summarizes the enlightenment to the development of petroRMB.The last chapter is some suggestions for the development of RMB valuation of crude oil.It includes four parts:strengthening the construction of the crude oil futures market;promoting the openess of capital and financial markets and strengthen construction of RMB backflow;promoting trade prosperity between China and "neighbourhood" to broaden RMB backflow;vigorously carrying out infrastructure construction with "the Belt and Road" countries in order to strengthen the function of RMB valuation.