The Impact Of New Infrastructure Construction On The Cross-border Trade Settlement In Rmb

Since the pilot started in 2009,China’s cross-border RMB settlement business has developed for more than a decade,making significant progress and promoting the rapid development of RMB internationalization.However,compared to the US dollar,which is considered the world currency,RMB cross-border settlement still faces many restrictions,particularly in terms of China’s lack of a sound RMB crossborder payment system,which still heavily relies on SWIFT for cross-border message transmission.The degree of a country’s new infrastructure development has a significant impact on the international status of its currency,and a well-developed new infrastructure environment can help reduce the cost of cross-border trade transactions,improve cross-border trade settlement efficiency,and provide strong support for the internationalization of the country’s currency.Currently,domestic and foreign scholars have conducted extensive research on the factors affecting the choice of currency for cross-border trade settlement,and the theoretical analysis framework is also well-established.However,existing research focuses more on the impact of finance,economy,trade,and policies on cross-border trade settlement,with less attention paid to the impact of new infrastructure on cross-border trade settlement and the nonlinear relationship between new infrastructure development and cross-border RMB settlement.Based on this,this article examines the impact and path of new infrastructure construction on cross-border RMB settlement,and empirically tests the nonlinear relationship between new infrastructure construction and cross-border RMB settlement.This article is based on panel data from 31 provinces in China between 2012 and 2019.The study constructs a benchmark model and panel threshold model to explore the direct and threshold effects of new infrastructure construction on crossborder RMB settlement,as well as the regional heterogeneity of the effects.In addition,the study examines the specific mechanisms of the effects through a mediation analysis.The findings of the study are as follows:(1)new infrastructure construction has a direct promoting effect on cross-border RMB settlement;(2)there exists a non-linear relationship between new infrastructure construction and cross-border RMB settlement;(3)in terms of regional heterogeneity,the promoting effect of new infrastructure construction on cross-border RMB settlement is more significant in the central and western regions of China and in provinces along the Belt and Road Initiative;(4)new infrastructure construction promotes the development of crossborder RMB settlement through financial agglomeration effects,investment regulation effects,industry adjustment effects,and economic growth effects.In summary,this study provides insights into the relationship between new infrastructure construction and cross-border RMB settlement,and highlights the regional differences in the promoting effects of such construction.The findings suggest that new infrastructure construction can have a positive impact on the internationalization of the RMB,and offer potential policy implications for policymakers and stakeholders seeking to promote the development of cross-border RMB settlement.