RMB Cross-board Settlement In The Development Of Frontier Finance

Yunnan Province of China is border-connected to the countries:Vietnam, Laos, and Burma, which is a frontier for China’s AFTA development and and openness improvement to the South and Eastern-south Asia. In the 2013, the State Council of P. R. China proved the plan<Development of border finance reform experiment region in Yunnan and Guangxi>, which dedicated a higher standard for Yunnan’s financial system development, include the finance’s openness, internationalization, expansion of Chinese Yuan’s border cross usage. Due to the real condition that:currently, both Yunnan’s financial development and financial reform is lag behind, and other barriers existed the small-scale trade and investment, which resulted the incomprehensiveness of Yunnan’s cross border financial collaboration, the popularity of cross-border usage of Chinese Yuan is not influenced. So in this dissertation I would like to discuss the elements affected the Yunnan’s cross-border settlement and usage, and further more to come up with practical and innovation ideology.Based on optimal monetary interval theory, currency choice theory, to conduct systematic analysis for the background, updated situation of Yunnan’s cross-border Chinese settlement development, follow the previous academic research, focus to explain the elements affected Yunnan’s cross-border Chinese Yuan’s settlement from both theoretical and practical sights. With the form of VAR model, combined with the impulse response analysis, explore the dynamic relationship among all elements within an econometric angle, finally we found out:Economy development, the stability extent of currency exchange rate, trade scale and currency consume capacity is the key elements affected the Yunnan’s Chinese Yuan cross-border settlement. There is a balance relationship among the Yunnan’s cross-border settlement volume, the stability of exchange rate, economic development condition, trade volume, CPI, and their influence on Yunnan’s Chinese Yuan cross-border settlement shows hysteresis. Economic development condition is the most affected element to the Yunnan’s Chinese Yuan cross-border settlement which contribute 18.09%, exchange rate stability’s explain capacity account for the second place almost 11.36%, international trade volume race the third place about 7.35%, the last on is the CPI which only contribute about 4.03%.So, the first priority is to form regional exchange rate mechanism, perfect the settlement collaboration with relevant border countries, then recombine the unofficial bank, correct their development, meanwhile construct the Chinese Yuan’s cross border settlement system, improve the cross-border finiance institution of Yunnan.