Development of Digital Finance and Cross-border Trade RMB Settlement:Empirical Evidence from Provincial-National Cross-border Trade RMB Settlement Data
Advocating the principle of RMB priority in cross-border trade is crucial for promoting the internationalization of the RMB steadily and solidly.There are still obstacles to cross-border trade RMB settlement in the financial and trade aspects,such as high transaction costs,insufficient convenience in payment and settlement,and limitations in US dollar network externalities.The development of digital finance plays an indispensable role in overcoming these obstacles.Examining the impact of the development of digital finance on cross-border trade RMB settlement has profound significance in promoting financial services for the real economy and assisting RMB internationalization.Firstly,this paper constructs a provincial digital finance index and uses the RMB Cross-border Payment and Receipt Management Information System(RCPMIS)to examine whether the development of digital finance can affect the cross-border trade RMB settlement.Secondly,it explores its transmission mechanism.Finally,it examines the important role of financial two-way opening measures in promoting the economic influence of digital finance.The results indicate that the development of digital finance can significantly increase the total amount and share of cross-border trade RMB settlement,and has a greater promoting effect on regions with lower financial development endowments,developing countries,non-dominant currency economies,and countries that have signed free trade agreements and bilateral currency swap agreements with China.The development of digital finance has promoted cross-border trade RMB settlement through both financial and trade channels.The financial channel shows that digital finance reduces RMB transaction costs,and the trade channel shows that digital finance increases the trade market share of enterprises,both of which can promote cross-border trade RMB settlement.The improvement of the two-way financial openness will enhance the promoting effect of digital finance on cross-border trade RMB settlement.The contributions of this paper are as follows.Firstly,a unique RCPMIS database is used as the data source to more accurately measure the scale and share of cross-border trade RMB settlement at the provincial level,and it further investigates the driving factors of provincial-level cross-border trade RMB settlement.On the one hand,RCPMIS can compensate for the lack of statistics on China's domestic transaction settlement in the SWIFT database.On the other hand,it fills the gaps in existing research and provides policy references for relevant government departments to solve the problem of regional imbalance in cross-border trade RMB settlement.Secondly,From the perspective of financial development,the impact of digital finance on cross-border trade RMB settlement is examined.It then explores the important role of financial liberalization policy,which provides new ideas for cracking the current obstacles of cross-border trade RMB settlement.Thirdly,a detailed explanation is provided on the channels through which the development of digital finance affects cross-border trade RMB settlement,expanding research on the economic effects of the development of digital finance,which can help government departments target policy tools for the deep integration of the digital economy and the real economy.
digital financecross-border trade RMB settlementRMB transaction costtrade market share
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