Research On Arbitrage Behavior Of Transnational Corporation In China

With the development of the reform and opening up in our country,the financial reform becomes increasingly promoted.To reflect the nature of the finance reasonably,which serves for the real economy,In recent years,the aspects of RMB interest rate,foreign exchange policy reform have increasingly strengthened.The marketization degree of interest rate grows higher.And the interest rate level becomes more and more marketized.The pricing level of the deposit and loan interest rate is more and more market-oriented.After the reform of the exchange rate of 8.11,China has formally opened up to the exchange rate reform of the deep-water area capital project.Following the successful pilot establishment of the Shanghai free trade zone,various foreign exchange reform pilot zones have been established.At the same time the window of the reform and supervision policy has been explored.As the RMB joins in the SDR basket successfully,Hong Kong,Taiwan and other offshore RMB markets further promote very well.The improvement of the cross-border RMB payment system,CIPS,which is always called Chinese swift system,effectively promotes wider use of RMB in the world.Also,it paves the way for RMB to become a truly global currency,to put the process of internationalization of the RMB forward.During the history of China's economic development,transnational corporation in China(It is referred to as the corporation in China in text),which is treated as investment promotion and capital introduction vanguard of China's reform and opening up policy,has played a positive role in increasing China's foreign exchange reserves,importing advanced technology,optimizing the industrial structure and enhancing employment.For historical reasons,corporations in China are more inclined to preferential policies on taxation,land and foreign exchange supervision.In recent years the abolition of foreign various preferential policies,due to the establishment of a wholly foreign-owned enterprise overseas investment enterprises usually initiated between domestic and foreign enterprises.Foreign exchange and foreign exchange transactions demand frequent contact.Exploring the deepening of China's foreign exchange reform is totally significant for capital projects orderly and completely.Therefore,the supervision of our regulatory authorities for the corporation in China,especially in the pilot areas or cities of foreign exchange reform,is still differentiated to some extent with other types of enterprises.This also creates policy soil for the arbitrage activities of transnational corporation in China,which is discussed in this paper.So the arbitrage behaviors of some transnational corporations in China can be implemented under the framework of compliance supervision.After that the transnational corporation in China can carry out the arbitrage behavior smoothly by combining the foreign currency products of commercial banks and take the risk-free financial profits.The structure of article is divided into the following five parts.The first part introduces the research background,the research motivation and the significance of the research.It mainly introduces the development course and scale of the transnational corporations in China.It also includes the research methods and ideas,as well as relevant literature research at home and abroad.The second part mainly are principles,characteristics,realistic significance of the arbitrage behavior,theoretical basis of cross-border capital pool business and the current situation of foreign exchange supervision and the innovation of foreign exchange supervision system in recent years.The third part is case analysis.Firstly,the paper introduces the structure,product,sales,common settlement method of transnational corporation Jiangsu LD Co.,LTD.as well as regulatory requirements of the regulatory authorities.Secondly,it analyzes the process of carrying out the specific arbitrage behavior of Jiangsu LD Co.,LTD.and the financial products involved.The key point is to analyze and discuss the two cases of arbitrage with transaction background and pure arbitrage without trading background.Thirdly,it states the influence of arbitrage on enterprises,banks and macro-economy.The positive effect is mainly to bring risk free profits to enterprises and bring dividends to banks.The negative effect mainly includes reducing the liquidity of enterprises,not conducive to the compliance management of commercial banks and the irrational changes brought about by interest rate market and exchange rate market.It also brings more challenges to foreign exchange compliance regulation The fourth part puts forward the corresponding thinking and suggestions on the influence of arbitrage,mainly with moderate strengthen supervision,coordination of the international balance of payments,deepen the interest rate marketization and RMB exchange rate formation mechanism and thinking and suggestion to accelerate the process of RMB internationalization.The fifth part is a summary.By analyzing the arbitrage behavior of the transnational corporation in China,it points out that arbitrage behavior of domestic and foreign enterprises has certain inevitability,which is related to the current economic development of the transnational corporation in China and reform and innovation of foreign exchange supervision.Besides the function of asset preservation,the influence of large-scale arbitrage speculation should be taken seriously and improved.We should improve the foreign exchange regulation policy such as interest rate market,exchange rate mechanism and other macro elements to manage and guide the arbitrage behavior of the transnational corporation in China.