The Research Of Establishing RMB Cross-border Settlement Center In Hong Kong Under The Internationalization Of RMB

After the financial crisis in 2008, the current structure of world currency system has been challenged, in addition, the rapid grow of china's economic power, and the raising value of RMB, these all made the internationalization of RMB becoming the hottest issue around. Now, RMB has already functioning as the invoicing and reserve currency in neighboring countries and regions. Moreover, since the using of RMB to settle cross-border trade and using outside china sharply increased, and to support all these related businesses, setting up a RMB cross-border settlement center is needed. For Hong Kong, by the closest economic relation with China, the richest experience in RMB business and the freest financial environment, therefore the best option of RMB cross-border settlement center to be setup. This dissertation will come up with the point of "taking the advantage of Hong Kong with the support from the RMB cross-border settlement center to promote the RMB as an international currency".This dissertation firstly reviews the theory of currency internationalization and the theory of financial centers, as the theory base of setting up the RMB cross-border settlement center. Then, the analyzing of RMB internationalizing, RMB cross-border circulation, RMB cross-border trade settlement, the position and functions of Hong Kong, and establishment of RMB cross-border settlement center in Hong Kong under the current situation. Secondly, analyze the advantages of establishing the RMB cross-border settlement center in Hong Kong both from the qualitative and quantitative point of view, using principal component analysis and cluster analysis to find out the main factors which affects the establishing of the BMB cross-border settlement center. Thirdly, analyze the long-term effect of RMB internationalizing after the BMB cross-border settlement center setup in Hong Kong and also the effect to Hong Kong. Lastly, base on the analysis of the difficulties and risks of establishing the RMB cross-border settlement center in Hong Kong, giving out the solution and strategies.By using the SWOT analysis method, conclude that Hong Kong should seize the opportunity and advantages to setup the RMB cross-border settlement center. And according to the empirical analysis, find out financial basis, financial aggregation, financial openness also financial system are the four major factors affecting the setting up of RMB cross-border settlement center. At last, pointing out the lacking of circulation system for RMB outside China, China's RMB capital account not fully opened, the competition of cities within China itself, and also some other possibly risks, all these will restrict the establishment of RMB cross-border settlement center in Hong Kong. Suggested actions to enhance the function of Hong Kong's RMB cross-border settlement center and reduce the risks are follows:expand of Hong Kong's financial market, encourage financial product innovation, enhance regional financial cooperation, the implementation of "First Try" policy, good coordination with Shanghai and strengthen up the risk control.