A Study On The Influencing Factors Of RMB Settlement In China 's Cross - Border Trade

In2008the financial crisis broke out, each country began to examine the settlement currency which is using US Dollar as the main. With the gradual strengthening of Chinese trade to further expand the scale and economic strength, we need RMB internationalization. In order to adapt to the situation, promote the process of RMB internationalization.On April8,2009. the State Council decided that Guangzhou,Shenzhen,Zhuhai,Dongguan,Shanghai to be the first Cross-border trade settlement in RMB pilot, the geographical scope is tentatively scheduled for Hong Kong and Macao regions and ASEAN countries. On August23,2011, Cross-border trade settlement in RMB extended to the whole country. Cumulative to October2013, Cross-border trade settlement in RMB amounted to3.5453trillion Yuan, representing an increase of55.27%over the same period of last year. With the continuous improvement of Cross-border trade settlement in RMB scale, not only conducive to China’s enterprises to avoid exchange rate risk, but also conducive to promoting the process of RMB internationalization.Therefore, this article starts from the international monetary theory, competitive monetary theory, and the international trade settlement currency of choice theory. Analyzing the factor influences the choice of monetary. Combined with Chinese actual conditions, and then identify the impact of cross-border trade in RMB conditions for development. Use descriptive statistical data analysis, the factors affecting stability analysis, co-integration test and so on to analyze the data. Build a short-ECM model to analyze the impact of each factor. Then build a VAR model and impulse response function analyze the impact of various factors on the Cross-border trade settlement in RMB. Put forward some advices to promote Cross-border trade settlement in RMB.The following conclusions have been found based on the above-mentioned analysis:Firstly, the influence factors of Cross-border trade in RMB development mainly comes from exchange rate, the consumer price index, exports of manufactured goods, imports of manufactured goods. In short term, our Cross-border trade settlement in RMB will be affected by exchange rate fluctuations, the consumer price index of manufactured goods exports, imports of manufactured goods. But in these factors, exchange rate volatility is the most significant.The effect by the above factors is not obvious in the long run. Because RMB internationalization has not been achieved, now it is mainly affected by national policies.Secondly, put forward reasonable suggestions come from the next, they are:opening the financial markets, improving the trade competitiveness, promoting settlement in RMB in border areas actively, innovating RMB financial product, putting forward policy to improve Cross-border trade settlement in RMB, enhancing RMB as the settlement currency.