Research On The Impact Of CNY Hong Kong Offshore Market Development To HK Dollar Substituion

As the financial economic relationship between countries and regions is increasingly closer, the mutual influence of financial economic development between them deepens. Now dollarization becomes common in countries and regions, under the condition that strong dollar has been the core of international monetary and financial system. However, since the Reform and Opening policy has been carned out for more than30years, the economic development of China has made remarkable achievements, the macro economic power is rapidly increasing, together with the level of financial service, all of which make it to be true that the international status of CNY is rising, and the internationalization process of CNY gradually speeds up. At present, in fact CNY has become the hard currency among border countries, Hong Kong and Macao, making more and more people in overseas to hold CNY. Therefore, under the cruel currency competition called "Darwinian", the risk of dollarization in china is lower and lower, but the phenomenon that CNY becomes a substitution for other currencies in their countries or regions, which is called "CNY-lization", is increasingly obvious, Hong Kong in particular.As the first choice for construction and development of offshore financial center in our country, the development of Hong Kong results in a mass accumulation and circulation of CNY. The rapid development of the offshore CNY market in Hong Kong has made CNY becomes "the second currency". This generates CNY-lization, that is to say, a substitution of offshore CNY for HKD.Based on the development reality of CNY Hong Kong offshore market, economical and financial theory and the achievements of currency substitution educed by predecessors, this paper is a preliminary study on the substitution of offshore CNY for HKD which generated in the development process of CNY Hong Kong offshore market. The paper can be divided into six parts:part one is the introduction, mainly elaborated the background of the research and the present status of former study on currency substitution at home and abroad; the second part is a summary of the development of Hong Kong offshore CNY market. What’s more, this part illustrates the scale and influence of its development; part three measures the degree of the substitution of offshore CNY for HKD in the development of Hong Kong offshore CNY market, aiming to prove the strength of CNY-lization in Hong Kong and to analyze the related factors which affect the HKD substitution; The fourth part is the empirical analysis of these factors; the fifth part discusses both the influence generated by CNY-lization in Hong Kong and measures that should be taken for its future development; the last part is the conclusion of the paper, which summarizes the analysis results of the five parts ahead, and comes up with several conclusions on the effect of the development of Hong Kong offshore CNY market to HKD substitution.