The Research On Pattern's Selection Of RMB Offshore Financial Center In Shanghai Pilot Free Trade Zone

After the reform and opening up,the economy of China has been developed with a remarkable speed.China rapidly becomes the second largest economic community in the world.The voice for the construction of offshore financial center is higher and higher against a background of economic globalization and financial internationalization.With the formal establishment of Shanghai Pilot Free Trade Zone and the advancement of RMB' s internationalization,the construction of RMB offshore financial center in Shanghai Pilot Free Trade Zone is increasingly on the agenda.However,the choosing of the development pattern still remains arguable,so the corresponding research is of great significance.This article starts with the theoretical introduction of four kinds of development patterns for offshore market.The patterns are outside-inside combination pattern,outside-inside separation pattern,infiltration pattern and tax-havens pattern.Then in the operation's analysis of the offshore market in London,American,Singapore and Thailand,it researches all the conditions in every pattern and summarizes three factors that are the state of domestic economic development,the regulation of financial market and the opening up of financial system.On this basis,the article illustrates these three elements for China.These elements include several conditions such as the economic influence index of China,the scale of international demand for RMB,the level of administrative management and so on.Then three pieces of information can be discovered from these elements.Firstly,China is an economic powerhouse which has an impact on the international market as well as has promising economic prospects.Secondly,the environment of domestic market is not satisfactory,and the systems and regulation are imperfect.What's more,there is always capital flight.Thirdly,although China has a low degree of capital opening,the offshore financial business nowadays is developing rapidly.Therefore,outside-inside combination pattern and tax-havens pattern can not fit RMB offshore financial center in Shanghai Pilot Free Zone obviously.And the selection between outside-inside separation pattern and infiltration pattern should be discussed.Furthermore,this article offers an empirical analysis of some typical offshore financial centers in outside-inside separation pattern or infiltration pattern in the world.It researches the operation of offshore financial centers in America,Singapore and Thailand through building the VAR model as well as analyzing impulse response and variance decomposition.According to the interaction of these three variables that are the development of offshore financial centers(OFC),the deepening of domestic finance(DEPTH)and the level of capital opening(OPEN),the offshore financial markets in America and Singapore show obvious and positive impact.As for Thailand,the OFC,the DEPTH and the OPEN can not promote each other,so they don't have positive relationship.In conclusion,the development pattern of offshore market works well in America and Singapore,while it has no obvious effectiveness in Thailand.Finally,according to what is discussed above,this article puts forward a viewpoint that the development of RMB offshore financial center in Shanghai Pilot Free Zone is supposed to be promoted by the outside-inside separation pattern in the early period and advanced by infiltration pattern when conditions are ripe.In addition,it offers a series of corresponding policies and advices.In a word,the construction of offshore financial center in Shanghai Pilot Free Trade Zone will bring immeasurable positive influence.And the selection of the pattern must be based on the actual situation of our country through analysis of conditions.