The Influence Of Rmb Internationalization On Bilateral Trade Between China And Korea

On the basis of development of RMB internationalization,the scale of bilateral trade between China and South Korea has increased year by year.Besides,the quick development of currency cooperation has improved the dependence between two countries.In this paper,qualitative and quantitative analysis methods are used to study the influence of RMB internationalization on the bilateral trade between China and Korea and to give related advice.First,in this paper,based on the theory of international currency selection,it is supposed that the competence of product and their market share,the fluctuation degree of exchange rate and the strength of the economy have different effects on the bilateral trade at different stages of RMB internationalization.When the degree of RMB internationalization is high,it affects bilateral trade by stimulating investment and consumption,and indirectly promoting bilateral trade by stimulating investment and consumption;increasing the overseas RMB development through monetary cooperation indirectly;promoting the convenience of international reserve currency and promoting import and export.Specifically,trade scale has expanded,and trade structure has been improved.When the degree of RMB internationalization is low,the exchange rate fluctuations are not good for bilateral trade.Second,I use the quarterly data from 2010 to 2015 to establish the multivariable VAR model.On this basis,I have studied the impact of RMB internationalization to bilateral trade between China and South Korea.The results show:There is a long-term stable equilibrium relationship between the RMB internationalization index and bilateral trade volume between China and Korea.The internationalization of RMB is the Granger cause of bilateral trade,and bilateral trade between China and Korea is the Granger cause of the total amount of RMB internationalization.Compared to other variables,RMB internationalization less impact on bilateral trade between China and South Korea.The influence of RMB internationalization on trade are limited,indicating that RMB internationalization is in the primary stage.RMB internationalization has larger variance contribution rate to bilateral trade between China and Korea.The RMB internationalization of the impact of export trade is more significant,and the impact of import trade is relatively small.But the degree of internationalization of the RMB is still shallowIn this paper,I come to conclusions by theoretical and empirical analysis.The internationalization of RMB can increase import and export scale between China and South Korea.RMB internationalization is beneficial to the development of bilateral trade,so in this paper,it is suggested that we optimize the trade structure,deepen the reform of the financial system,speed up the development of the offshore market,improve the service of financial institutions,and enhance the awareness of using the RMB to promote the internationalization of RMB and to play its role in improving the development of bilateral trade between China and Korea.