An Empirical Analysis On The Influence Of The Openness Of The Capital Account On The Currency Internationalization

With the growing of China’s economic strength, for the internationalisation ofthe renminbi constantly be on the agenda, become the focus of a dispute. But, to ourdeep thinking, although in recent years, our country has become a trade of exportand import power，what we export are mostly low value-added products, on the priceof these goods, we have no initiative; Import of products for us at the same time, forthe high added value of high-tech products more commonly, exporters holds the coretechnology, occupy the dominant position, thus has no pricing rights. Therefore,from the perspective of trade, both from the aspects of import and export，to useRMB as currency, at least don’t change under the premise of the trade structure inour country, it is not feasible in the short term, and the way in promoting theinternationalization of the renminbi is questionable. So we must find otherreasonable effective way, losing no time to promote the internationalisation of therenminbi.Throughout history, monetary internationalization degree higher countries orregions, such as the United States, the euro zone countries, Germany, Switzerland,Japan, in a manner of speaking, the country’s currency internationalization is basedon open capital account. If there is severe control on capital projects in a country, itwill make the flow of capital between countries difficult, much less its currency canbe accepted by foreign. The significance of this paper is that through theestablishment of econometric models, from the perspective of empirical analysis ofcapital account openness affect monetary internationalization. But given the currentacademic research on an empirical analysis of the relationship between less, mainly because of problems with the opening of the capital measurement, such as theopening of the capital is qualitative analysis and quantitative analysis, differentscholars hold different opinions. For qualitative analysis mainly adopt virtualvariables and through comparison the United Nations the classification of thevarious indicators of capital project, analysis of whether one country in theseindicators released controls, if open the given virtual variables1, otherwise0, and soon, for all the indexes given virtual variable capital projects. But we should considerin these indicators, there is such a situation, namely degree of importance of differentindex is different, so we have to according to each index weight given to theimportance of the corresponding. And then finish on the various indicators of capitalprojects give weight and virtual variables, on the basis of weighted summation, toreflect the opening of the capital from country to country. In addition to virtualvariable assignment will there is a specific operational problems, is likely to beaffected by the subjectivity of the governments. So this article uses the quantitativeanalysis method, the capital account openness indicator is defined as:(cross-borderdirect investment, securities investment and other investment)/GDP, usingeconometric model to simulate the relationship between the quantitative analysis ofcross section data mainly for Switzerland, the United States, Japan, the euro zone,England, the five countries for time series data from2000to2012a total of13yearspan. Through regression analysis of the model: the openness of capital account forsignificant impact of currency internationalization, in which a country’s capitalaccount openness is higher, the more beneficial to the country’s currencyinternationalization, the lower the degree of a country’s capital account opening, themore conducive to the country’s currency internationalization. In theinternationalization of the yuan, therefore, how to grasp the openness of capitalaccount is important, we also have to carry on positive and effective cooperation through the various measures and means, to provide reasonable suggestions andguidance for its internationalization.