The correlation between Renminbi(RMB) internationalization and nonferrous metal prices was studied using the nonlinear Granger causality test and the dynamic conditional correlation-generalized autoregressive conditio...The correlation between Renminbi(RMB) internationalization and nonferrous metal prices was studied using the nonlinear Granger causality test and the dynamic conditional correlation-generalized autoregressive conditional heteroskedastic(DCC-GARCH) model. The results indicate that the relationship between RMB internationalization and nonferrous metal prices reflects a complex nonlinear mechanism. There was no mutual influence between RMB internationalization and nonferrous metal prices prior to the trials of the RMB settlement in the cross-border trade in July 2009. Since then, however, a bidirectional causal relationship between RMB internationalization and the price of copper and a unidirectional causal relationship from the price of aluminum to RMB internationalization were examined. In addition, due to the impact of extreme events, such as economic and financial crises, RMB internationalization and nonferrous metal prices are not always positively correlated but are rather occasionally negatively correlated.展开更多
This paper emphasizes the importance of the denomination of financial assets rather than trade invoicing as a long-term determinant of an international currency. China needs to liberalize and open its financial system...This paper emphasizes the importance of the denomination of financial assets rather than trade invoicing as a long-term determinant of an international currency. China needs to liberalize and open its financial system and make the RMB fully convertible, and to adopt a moreflexible exchange rate system to speed up its currency internationalization, for which China could follow either a global or regional approach. The global approach is a riskier and more unpredictable strategy because it would demand a scope and timeframe of financial liberalization that is likely to be beyond China＇s institutional capacity over the coming decade. There are two options that could be taken in following the regional approach. One is creating an ASEAN＋ New 3 （the Chinese Mainland, Hong Kong, and Taiwan） RMB bloc and the other is liberalizing China＇s financial industries and internationalizing the RMB by playing a leading role in East Asia＇s economic integration within the framework of ASEAN＋ 3, This paper concludes that the latter is a more realistic and effective approach for China.展开更多
This paper investigates the dependence of the exchange rate of onshore Renminbi(RMB)and offshore RMB against US dollar(i.e., CNY and CNH) based on copula models. Eleven different copulas were selected to construct mul...This paper investigates the dependence of the exchange rate of onshore Renminbi(RMB)and offshore RMB against US dollar(i.e., CNY and CNH) based on copula models. Eleven different copulas were selected to construct multivariate distribution and estimate the value-at-risk for RMB exchange rate. Empirical results show that time-invariant Student-t copula is the best model to fit the sample data. The positive upper and lower dependence indicates that CNY and CNH series tend to move in the same direction. Moreover, the dependence between the two exchange rates is asymmetric,which means that traditional models, such as Pearson's correlation, are inappropriate to measure the correlations between these markets. The best fitted model is chosen to estimate the financial risk,which can help business practitioners and policymakers track risk evolution and make good decisions.展开更多
As the Chinese economy continues to develop,China is becoming a more active player in the world economy,and the RMB is being more widely used in international markets.In this paper we use indicators representing the ...As the Chinese economy continues to develop,China is becoming a more active player in the world economy,and the RMB is being more widely used in international markets.In this paper we use indicators representing the RMB’s functions of pricing,settlement and reserve to create an RMB Internationalization Index(RII)to evaluate the degree of the internationalization of the currency.We calculate the RII levels in 2010 and 2011,and find that the RII increased dramatically during these two years.However,when compared to the currencies of developed countries,the RMB is far from achieving complete internationalization.We propose a"three-step development"strategy for the RMB to be internationalized.展开更多
For evaluating the influence of the Chinese renminbi(RMB) joining in the special drawing right(SDR) basket on RMB's internationalization, the authors systemically study the risk spillover networks and examine the ...For evaluating the influence of the Chinese renminbi(RMB) joining in the special drawing right(SDR) basket on RMB's internationalization, the authors systemically study the risk spillover networks and examine the dynamic relationship of exchange rates among the SDR currencies including the US dollar(USD), European Union euro(EUR), Japanese yen(JPY) and British pound(GBP).The empirical results demonstrate that the USD takes a dominant position and holds the biggest risk spillover to other currencies, and the RMB's inclusion to the SDR basket makes the risk spillover to get average, giving rise to the SDR currency system more stable to a certain degree. The inclusion of the RMB in the SDR not only can reduce the systematic risk of the SDR, but also has a certain impact on the international exchange rate markets. Nowadays, in front of the growing trade friction, more such researches could help to effectively deal with the currency disputes.展开更多
There is a great potential of both supply and consumption in oil ＆ gas market in Northeast Asia, and the prospects of further cooperation is very broad. Sino-Russia cooperation on oil ＆ gas will lay a crucial founda...There is a great potential of both supply and consumption in oil ＆ gas market in Northeast Asia, and the prospects of further cooperation is very broad. Sino-Russia cooperation on oil ＆ gas will lay a crucial foundation for building a regional oil ＆ gas market, and an increasingly opened trading system for oil ＆ gas will also meet Japan and South Korea＇s need in building a diversified and stable assurance system of oil ＆ gas supply. The strategic role played by Kozmino Port in Far East Russia and Shanghai oil and gas trading platform in China will be highlighted. Competition and cooperation through market mechanism will help to activate the interactions of resource flow and capital flow in Northeast Asia region, thus can also help energy consuming countries in the region to promote their disclosure power in global pricing system and gradually eliminate the Asian Premium.展开更多
In 2014, the amount of RMB cross-border settlement had reached RMB7.6tn. It is important to evaluate the potential influence of RMB internationalization on China＇s macroeconomy. In the present study, a framework that...In 2014, the amount of RMB cross-border settlement had reached RMB7.6tn. It is important to evaluate the potential influence of RMB internationalization on China＇s macroeconomy. In the present study, a framework that includes monetary supply and demand was created to analyze the influences of RMB cross-border settlement on China＇s domestic interest rate, asset price and foreign exchange reserves. It is found that RMB settlement in different BOP items leads to very different effects on China＇s real economy and the financial market. Based on the analysis, we provide a framework of the policy priorities for RMB internationalization, with the RMB cross-border settlement items divided into three groups with different priorities. Meanwhile, to support RMB internationalization, exchange rate reforms should be adopted as a priority and a prudent attitude maintained regarding capital account liberalization.展开更多
This paper discusses China＇s relatively new structure of dual onshore and offshore RMB markets. Its distinguishingJeature is both offshore trading at exchange rates that are market determined and onshore trading at e...This paper discusses China＇s relatively new structure of dual onshore and offshore RMB markets. Its distinguishingJeature is both offshore trading at exchange rates that are market determined and onshore trading at exchange rates anchored at the official spot rate with capital account inconvertibility. We note that thus far the CNH and CNY spot rates have largely tracked each other, suggesting that the shadow priee on the convertibility constraint onshore and also the offshore diversification benefit is close to zero. However, this could change in the future. We discuss the potentialJbr the offshore RMB market to grow with trade settlement and bilateral ,swap arrangements in RMB, which would provide a big enough pool ofliquidityforthe RMB to become a vehicle currency and reserve c^rrency. These potential developments will be restrained by onshore inconvertibility, but moving to convertibility seemingly implies major change in China ＂s financial structure and the offshore RMB arrangements are only a small first step along this path. Crucial in this evolution of arrangements will be fi^ture Chinese growth performance and the relative attractiveness of onshore inconvertible but offshore marketable RA4B relative to the debt laden and slow growth currencies of the USA, the EU and Japan.展开更多
The present paper evaluates the international status of the Chinese currency, the renminbi （RMB）, by examining its use in the global market. Specifically, the discussion focuses on the recent developments of RMB tra...The present paper evaluates the international status of the Chinese currency, the renminbi （RMB）, by examining its use in the global market. Specifically, the discussion focuses on the recent developments of RMB trading in the global foreign exchange market, cross-border trade settlement in RMB, the Hong Kong offshore market and China＇s policies relating to the RMB. The evidence suggests that the use of the RMB overseas, especially in trade financing and in the off-shore market, has increased rapidly in recent years. However, compared with the size of the Chinese economy, the current scale of the use of the RMB is quite small. Although the RMB has great potential to become an international currency, its acceptance in the global economy is affected by both economic andpolitical factors. Attaining a fully fledged international RMB is still a distant goal.展开更多
International financial adjustment is the process whereby valuation shifts from asset price and currency changes result in relatively durable net wealth transfers across countries＇ international balance sheets. Thisp...International financial adjustment is the process whereby valuation shifts from asset price and currency changes result in relatively durable net wealth transfers across countries＇ international balance sheets. Thispaper applies a financial valuation approach to estimate the direction and the broad extent of recent international financial adjustments on China international balance sheet. We estimate China＇s international balance sheet losses resulting from the valuation shifts over the period 2005 2010 and reveal that international currency shifts over the past decade have also generated a range of non-balance sheet financial and monetary adjustment pressures for China. This paper also evaluates how China＇s evolving international financial policy arrangements could better mitigate China＇s exposure to international financial adjustments. These arrangements include a more effective currency mechanism and the mechanisms to internationalize the RMB to buffer international financial valuation shocks展开更多
This paper investigates the effects of the renminbi(RMB)exchange rate on trade prices and volumes in selected Belt and Road Initiative(BRI)countries in comparison with the effects of the US dollar.The stylized facts s...This paper investigates the effects of the renminbi(RMB)exchange rate on trade prices and volumes in selected Belt and Road Initiative(BRI)countries in comparison with the effects of the US dollar.The stylized facts show that the RMB is underused in bilateral trade with selected BRI countries where intermediate goods dominate.By estimating the level of exchange rate pass-through and trade volume elasticity,we find that the RMB is significantly correlated with the volume of imports in the sample countries,predicted by the producer currency pricing(PCP)paradigm.We also regroup intermediate and final goods between China and the BRI countries.The evidence shows that dollar fluctuation affects export volumes,reflecting the role of the US as a final goods destination,whereas the RMB exerts a significant impact on the volume of intermediate goods imported from China to the sample countries due to China s important position in global value chains.展开更多
We explore how China's geographically targeted policies impact RMB overseas use individually or in combination.The policies include swap agreements,clearing banks,investment quotas,and direct trading between Chine...We explore how China's geographically targeted policies impact RMB overseas use individually or in combination.The policies include swap agreements,clearing banks,investment quotas,and direct trading between Chinese renminbi(RMB)and non-USD currencies.Adopting a fuzzy-set qualitative comparative analysis and using Bank of International Settlements cross-country data on foreign exchange markets,we find that institution building has lowered the barriers to international adoption of the RMB.Specifically,for countries economically close to China,high RMB trading is explained by either(i)having a clearing bank in the host market and direct quotations between the RMB and the local currency,or(ii)being a financial center and having access to the Chinese capital market.This combination of policies is explained by the creation of(i)"trading posts"that provide RMB liquidity abroad,and(ii)channels that allow actors to " recycle" offshore RMB funds.We triangulate our results with interviews conducted with senior People’s Bank of China officials.展开更多
As for financial development based on the dual attributes of function and industry,China,in the“13th Five-Year”period,should build a more mature and better-established modern financial system and transform from a ma...As for financial development based on the dual attributes of function and industry,China,in the“13th Five-Year”period,should build a more mature and better-established modern financial system and transform from a major financial country to a major world financial power.The proportion of financial industrial value-added should be maintained at around 7.5%during the“13th Five-Year”period,and by the end of the period,the proportion of direct financing in social financing should surpass 25%.The main tasks of financial development include improving the interest rate and exchange rate mechanisms,and promoting the market to play a decisive role in the allocation of resources,holding onto the bottom line of preventing systematic and regional risks,and making full use of government function,enhancing financial reform,and opening-up in a concerted effort for the purpose of building a global financial powerhouse,and putting more efforts into developing diverse financial patterns to better serve the development of the real economy.To this end,China should promote coordination among different economic policies,continue to advance the reform of financial institutions,push forward the development of multi-level capital markets,strengthen the financial security network,and prepare emergency plans to prevent potential financial crises.展开更多
基金Projects(71874210,71633006,71874207,71974208)supported by the National Natural Science Foundation of ChinaProject(2020CX049)supported by Innovation-Driven Foundation of Central South University,China+1 种基金Project(2018dcyj031)supported by Postgraduate Survey Research Foundation of Central South University,ChinaProject(17K103)supported by the Innovation Platform Open Fund Project of Hunan Education Department,China。
文摘The correlation between Renminbi(RMB) internationalization and nonferrous metal prices was studied using the nonlinear Granger causality test and the dynamic conditional correlation-generalized autoregressive conditional heteroskedastic(DCC-GARCH) model. The results indicate that the relationship between RMB internationalization and nonferrous metal prices reflects a complex nonlinear mechanism. There was no mutual influence between RMB internationalization and nonferrous metal prices prior to the trials of the RMB settlement in the cross-border trade in July 2009. Since then, however, a bidirectional causal relationship between RMB internationalization and the price of copper and a unidirectional causal relationship from the price of aluminum to RMB internationalization were examined. In addition, due to the impact of extreme events, such as economic and financial crises, RMB internationalization and nonferrous metal prices are not always positively correlated but are rather occasionally negatively correlated.
文摘This paper emphasizes the importance of the denomination of financial assets rather than trade invoicing as a long-term determinant of an international currency. China needs to liberalize and open its financial system and make the RMB fully convertible, and to adopt a moreflexible exchange rate system to speed up its currency internationalization, for which China could follow either a global or regional approach. The global approach is a riskier and more unpredictable strategy because it would demand a scope and timeframe of financial liberalization that is likely to be beyond China＇s institutional capacity over the coming decade. There are two options that could be taken in following the regional approach. One is creating an ASEAN＋ New 3 （the Chinese Mainland, Hong Kong, and Taiwan） RMB bloc and the other is liberalizing China＇s financial industries and internationalizing the RMB by playing a leading role in East Asia＇s economic integration within the framework of ASEAN＋ 3, This paper concludes that the latter is a more realistic and effective approach for China.
基金supported by Strategic Research Grant of City University of Hong Kong under Grant No.7004268
文摘This paper investigates the dependence of the exchange rate of onshore Renminbi(RMB)and offshore RMB against US dollar(i.e., CNY and CNH) based on copula models. Eleven different copulas were selected to construct multivariate distribution and estimate the value-at-risk for RMB exchange rate. Empirical results show that time-invariant Student-t copula is the best model to fit the sample data. The positive upper and lower dependence indicates that CNY and CNH series tend to move in the same direction. Moreover, the dependence between the two exchange rates is asymmetric,which means that traditional models, such as Pearson's correlation, are inappropriate to measure the correlations between these markets. The best fitted model is chosen to estimate the financial risk,which can help business practitioners and policymakers track risk evolution and make good decisions.
文摘As the Chinese economy continues to develop,China is becoming a more active player in the world economy,and the RMB is being more widely used in international markets.In this paper we use indicators representing the RMB’s functions of pricing,settlement and reserve to create an RMB Internationalization Index(RII)to evaluate the degree of the internationalization of the currency.We calculate the RII levels in 2010 and 2011,and find that the RII increased dramatically during these two years.However,when compared to the currencies of developed countries,the RMB is far from achieving complete internationalization.We propose a"three-step development"strategy for the RMB to be internationalized.
基金supported by the National Natural Science Foundation of China under Grant Nos.71801213 and 71642006。
文摘For evaluating the influence of the Chinese renminbi(RMB) joining in the special drawing right(SDR) basket on RMB's internationalization, the authors systemically study the risk spillover networks and examine the dynamic relationship of exchange rates among the SDR currencies including the US dollar(USD), European Union euro(EUR), Japanese yen(JPY) and British pound(GBP).The empirical results demonstrate that the USD takes a dominant position and holds the biggest risk spillover to other currencies, and the RMB's inclusion to the SDR basket makes the risk spillover to get average, giving rise to the SDR currency system more stable to a certain degree. The inclusion of the RMB in the SDR not only can reduce the systematic risk of the SDR, but also has a certain impact on the international exchange rate markets. Nowadays, in front of the growing trade friction, more such researches could help to effectively deal with the currency disputes.
文摘There is a great potential of both supply and consumption in oil ＆ gas market in Northeast Asia, and the prospects of further cooperation is very broad. Sino-Russia cooperation on oil ＆ gas will lay a crucial foundation for building a regional oil ＆ gas market, and an increasingly opened trading system for oil ＆ gas will also meet Japan and South Korea＇s need in building a diversified and stable assurance system of oil ＆ gas supply. The strategic role played by Kozmino Port in Far East Russia and Shanghai oil and gas trading platform in China will be highlighted. Competition and cooperation through market mechanism will help to activate the interactions of resource flow and capital flow in Northeast Asia region, thus can also help energy consuming countries in the region to promote their disclosure power in global pricing system and gradually eliminate the Asian Premium.
基金This research is supported by the National Social Science Foundation （Grant No. 13AJL008） and the National Natural Science Foundation （Grant No. 71503263）.
文摘In 2014, the amount of RMB cross-border settlement had reached RMB7.6tn. It is important to evaluate the potential influence of RMB internationalization on China＇s macroeconomy. In the present study, a framework that includes monetary supply and demand was created to analyze the influences of RMB cross-border settlement on China＇s domestic interest rate, asset price and foreign exchange reserves. It is found that RMB settlement in different BOP items leads to very different effects on China＇s real economy and the financial market. Based on the analysis, we provide a framework of the policy priorities for RMB internationalization, with the RMB cross-border settlement items divided into three groups with different priorities. Meanwhile, to support RMB internationalization, exchange rate reforms should be adopted as a priority and a prudent attitude maintained regarding capital account liberalization.
文摘This paper discusses China＇s relatively new structure of dual onshore and offshore RMB markets. Its distinguishingJeature is both offshore trading at exchange rates that are market determined and onshore trading at exchange rates anchored at the official spot rate with capital account inconvertibility. We note that thus far the CNH and CNY spot rates have largely tracked each other, suggesting that the shadow priee on the convertibility constraint onshore and also the offshore diversification benefit is close to zero. However, this could change in the future. We discuss the potentialJbr the offshore RMB market to grow with trade settlement and bilateral ,swap arrangements in RMB, which would provide a big enough pool ofliquidityforthe RMB to become a vehicle currency and reserve c^rrency. These potential developments will be restrained by onshore inconvertibility, but moving to convertibility seemingly implies major change in China ＂s financial structure and the offshore RMB arrangements are only a small first step along this path. Crucial in this evolution of arrangements will be fi^ture Chinese growth performance and the relative attractiveness of onshore inconvertible but offshore marketable RA4B relative to the debt laden and slow growth currencies of the USA, the EU and Japan.
文摘The present paper evaluates the international status of the Chinese currency, the renminbi （RMB）, by examining its use in the global market. Specifically, the discussion focuses on the recent developments of RMB trading in the global foreign exchange market, cross-border trade settlement in RMB, the Hong Kong offshore market and China＇s policies relating to the RMB. The evidence suggests that the use of the RMB overseas, especially in trade financing and in the off-shore market, has increased rapidly in recent years. However, compared with the size of the Chinese economy, the current scale of the use of the RMB is quite small. Although the RMB has great potential to become an international currency, its acceptance in the global economy is affected by both economic andpolitical factors. Attaining a fully fledged international RMB is still a distant goal.
文摘International financial adjustment is the process whereby valuation shifts from asset price and currency changes result in relatively durable net wealth transfers across countries＇ international balance sheets. Thispaper applies a financial valuation approach to estimate the direction and the broad extent of recent international financial adjustments on China international balance sheet. We estimate China＇s international balance sheet losses resulting from the valuation shifts over the period 2005 2010 and reveal that international currency shifts over the past decade have also generated a range of non-balance sheet financial and monetary adjustment pressures for China. This paper also evaluates how China＇s evolving international financial policy arrangements could better mitigate China＇s exposure to international financial adjustments. These arrangements include a more effective currency mechanism and the mechanisms to internationalize the RMB to buffer international financial valuation shocks
文摘This paper investigates the effects of the renminbi(RMB)exchange rate on trade prices and volumes in selected Belt and Road Initiative(BRI)countries in comparison with the effects of the US dollar.The stylized facts show that the RMB is underused in bilateral trade with selected BRI countries where intermediate goods dominate.By estimating the level of exchange rate pass-through and trade volume elasticity,we find that the RMB is significantly correlated with the volume of imports in the sample countries,predicted by the producer currency pricing(PCP)paradigm.We also regroup intermediate and final goods between China and the BRI countries.The evidence shows that dollar fluctuation affects export volumes,reflecting the role of the US as a final goods destination,whereas the RMB exerts a significant impact on the volume of intermediate goods imported from China to the sample countries due to China s important position in global value chains.
文摘We explore how China's geographically targeted policies impact RMB overseas use individually or in combination.The policies include swap agreements,clearing banks,investment quotas,and direct trading between Chinese renminbi(RMB)and non-USD currencies.Adopting a fuzzy-set qualitative comparative analysis and using Bank of International Settlements cross-country data on foreign exchange markets,we find that institution building has lowered the barriers to international adoption of the RMB.Specifically,for countries economically close to China,high RMB trading is explained by either(i)having a clearing bank in the host market and direct quotations between the RMB and the local currency,or(ii)being a financial center and having access to the Chinese capital market.This combination of policies is explained by the creation of(i)"trading posts"that provide RMB liquidity abroad,and(ii)channels that allow actors to " recycle" offshore RMB funds.We triangulate our results with interviews conducted with senior People’s Bank of China officials.
文摘As for financial development based on the dual attributes of function and industry,China,in the“13th Five-Year”period,should build a more mature and better-established modern financial system and transform from a major financial country to a major world financial power.The proportion of financial industrial value-added should be maintained at around 7.5%during the“13th Five-Year”period,and by the end of the period,the proportion of direct financing in social financing should surpass 25%.The main tasks of financial development include improving the interest rate and exchange rate mechanisms,and promoting the market to play a decisive role in the allocation of resources,holding onto the bottom line of preventing systematic and regional risks,and making full use of government function,enhancing financial reform,and opening-up in a concerted effort for the purpose of building a global financial powerhouse,and putting more efforts into developing diverse financial patterns to better serve the development of the real economy.To this end,China should promote coordination among different economic policies,continue to advance the reform of financial institutions,push forward the development of multi-level capital markets,strengthen the financial security network,and prepare emergency plans to prevent potential financial crises.
