近年来，我国实体经济的人民币国际使用场景逐渐增多，对人民币离岸国际结算、存贷款等金融服务的潜在需求与日俱增。在此背景下，发展以人民币为主要交易币种的境内离岸金融，有利于满足这些金融需求，促进实体经济的高质量发展。我国发展境内离岸金融的重点是在深刻理解实体经济需求的基础上，大力发展离岸人民币业务和产品，建设离岸人民币金融体系，为我国实体经济布局全球提供便利，同时稳慎扎实推进人民币国际化。
来源：China Forex（《中国外汇》英文刊）2024年9月刊
作者：高皓（清华大学五道口金融学院）、邓志超（上海社会科学院）、许嫘（清华大学五道口金融学院）
原标题：Developing Domestic Offshore Finance to Meet the Needs of the Real Economy
In recent years, there has been a gradual upsurge in the international use of RMB in China's real economy, leading to a growing potential demand for offshore RMB international settlement, deposits and loans, and other financial services. Against such a background, the development of domestic offshore finance with RMB as the main transaction currency is beneficial to meet these financial needs and promote the high-quality development of the real economy. The key to developing domestic offshore finance in China is to deeply understand the needs of the real economy, vigorously develop offshore RMB businesses and products, build an offshore RMB financial system, facilitate the global layout of China's real economy, and steadily advance the internationalization of RMB.
The Necessity of Developing Domestic Offshore Finance
After more than 40 years of development since the reform and opening up, a large number of powerful multinational enterprises have set their sights on overseas markets and are actively engaged in global expansion, which has generated a significant demand for offshore financial services, such as offshore RMB payment and settlement, investment and financing, risk management, and business consulting. While China's capital account is not yet fully open, developing domestic offshore finance to facilitate RMB circulation between onshore and offshore markets is conducive to facilitating the global layout of China's real economy, and steadily advances the internationalization of RMB. This makes China's trade with the world more controllable and less prone to losses, enhancing China's financial security while also providing alternative options for other global economic entities. At the same time, it lays a solid foundation for further opening up China's financial sector and building a nation with a strong financial sector.
Analysis of Offshore Financial Demand in the Real Economy
The demand of the real economy is the ultimate driving force for the development and innovation of finance. Considering that domestic offshore finance is dominated by RMB transactions, in accordance with the theory of money demand, the real economy's demand for offshore finance can be divided into transaction demand, precautionary demand, and investment and financing demand. Among them, transaction demand and precautionary demand are direct demands generated by the development of the real economy, while investment and financing demand is an indirect demand that arises concomitantly. These three types of demand interact and reinforce one another, and all of them need to be fulfilled to form a closed loop of offshore RMB flows and promote the sustainable and healthy development of the domestic offshore financial market.
Analysis of the real economy's transaction demand for offshore finance
The transaction demand for domestic offshore finance primarily stems from offshore trade, especially the demand from enterprises for offshore RMB settlement transactions. This demand comes mainly from two types of enterprises. Firstly, Chinese enterprises seek global expansion and require overseas funding. As the reporting currency of the parent companies of these Chinese enterprises is RMB, such enterprises have a natural demand for offshore RMB transactions in terms of ease of pricing and usage. Particularly, with the rise of cross-border e-commerce in recent years, characterized by small and high-frequency transactions, traditional cross-border finance is struggling to meet their transaction demand. Secondly, foreign-funded enterprises focus on strategic deployments in China. These enterprises have often been based in China for many years, with their main business in the domestic market and their business scope concentrated in Asia. For them, the RMB is the main trading currency, while the US dollar and other foreign currencies become relatively minor currencies, leading to a strong demand for offshore RMB transactions.
However, due to the current insufficient supply of offshore RMB trading systems within the country and the limited international financial services capabilities of Chinese financial institutions, most of the aforementioned transactions occur overseas (e.g., China's Hong Kong and Singapore), replacing domestic offshore RMB transactions and leading to an outward shift in domestic demand. Considering that the main business of these enterprises is domestic, if high-quality offshore financial transaction services can be provided domestically, enterprises would be willing to set up settlement centers in China's pilot free trade zones to achieve efficient business linkage, convenient management, and cost savings.
Analysis of the real economy's precautionary demand for offshore finance
The domestic real economy's precautionary demand for offshore finance is mainly reflected in enterprises' hedging for international business and insurance demand in sectors such as construction engineering and shipping logistics. As of March 2024, the number of countries and regions where China's non-financial ODI has reached 147, showing a trend of spreading investment from Europe and America to the Belt and Road countries. Some countries have political instability, large exchange rate fluctuations, and severe market regulations, leading to higher country risks that greatly increase the uncertainty faced by Chinese enterprises in overseas investment. For example, after the COVID-19 pandemic, the rise of protectionism in some African countries led to contract disputes and profit repatriation issues for Chinese enterprises investing in Africa. Similarly, India has taken administrative measures against certain Chinese enterprises. When investing in these regions, Chinese enterprises have a higher demand for hedging and insurance.
Currently, China's external economic focus is shifting to regions such as ASEAN, Africa, and the Middle East. However, there are relatively few RMB-denominated hedging products available on the international market. Developing the domestic offshore financial market and enriching RMB hedging products can effectively enhance the offshore risk management capabilities of Chinese enterprises going global. At present, most of the offshore insurance products required by Chinese enterprises going global are provided by European and American insurance providers, with Chinese insurance institutions holding a small market share and offering lower-quality policies. Urgent action is needed to develop comprehensive offshore shipping insurance and reinsurance products that leverage the domestic offshore financial market.
Analysis of the real economy's investment and financing demand for offshore finance
Developing domestic offshore finance needs to focus on the direct demand of the real economy, such as trade settlement and direct investment, while also taking into account the demand for indirect investment, such as asset transactions. Traditional theories suggest that transactional and precautionary demand are the basic demands of currency, and investment and financing demand is derivative demand, i.e., there is a hierarchy of demand, and transactional and precautionary demand should be satisfied first before investment and financing demand can emerge. Modern financial theories, however, have mounting evidence to suggest that the three demands are emerging simultaneously, and even the empirical results of many research papers suggest that demand for investment and financing is expanding faster than the previous two. Therefore, under the background of the internationalization of RMB, it is necessary to build and improve the RMB offshore investment and financing system.
Currently, the supply capacity of RMB assets in the global offshore RMB market is relatively insufficient. The types of RMB-denominated products in the offshore market are still quite limited, and their liquidity is low, lacking sufficient and diverse investment channels. The incomplete investment and financing system greatly reduces the willingness of enterprises to hold offshore RMB, which in turn reinforces speculative activities, especially in the context of RMB depreciation. If China's pilot free trade zones can provide attractive offshore RMB financial products to the global market, the willingness of global enterprises to hold offshore RMB could be significantly enhanced and the stickiness of RMB demand could increase. Thereby it would facilitate the use of RMB by Chinese enterprises going abroad for transaction settlement and promote the circulation of offshore RMB.
Principles and Approaches for Developing Domestic Offshore Finance
Making the RMB the primary transaction currency
For a long time, the development of offshore finance in China has focused on foreign currencies (US dollar). However, with significant changes in the global landscape, there is an increasing potential demand from domestic and foreign entities for the international use of the RMB. In this context, the focus of developing domestic offshore finance in China should be on developing the offshore RMB financial system, making the offshore RMB the primary currency for transactions, nurturing the domestic offshore RMB market, and enhancing the financial regulatory environment. One of the main objectives of the development of domestic offshore finance is to promote the internationalization of the RMB and build an international financial system with the RMB as the primary transaction currency.
Prepared to avoid systemic risks
In developing domestic offshore finance, attention must be paid to two key risks: exchange rate risk and interest rate risk. Exchange rate risk arises from the creation of two types of RMB exchange rates in constructing the domestic offshore RMB market, increasing exchange rate volatility and potentially forming systemic risks. One scenario is the mutual reinforcement between capital outflows utilizing the offshore market and RMB depreciation trends, leading to vicious downward spiral of negative feedback. The key to resisting the impact is to break the consistent depreciation expectation. Interest rate risk arises from the existence and changes in interest rate differentials between domestic and foreign markets, which may lead financial institutions to engage in "low borrowing" onshore and "high lending" offshore. Excessive cross-market arbitrage could potentially trigger financial risks. It is therefore necessary to set penetration limits for financial institutions engaging in offshore financial operations, controlling overdraft limits between their offshore and onshore accounts. Interest rates in the offshore financial market will also have a demonstrative effect on the onshore financial market, influencing the effectiveness of domestic monetary policy.
Exchange rate risk and interest rate risk may also interact and reinforce each other. An effective response is for the People's Bank of China to establish robust macro-prudential and market-based liquidity regulation systems in the domestic offshore financial market. The former primarily controls risk accumulation by adjusting the penetration limits of financial institutions, while the latter adjusts the supply-demand relationship of offshore RMB liquidity through open market operations to break the consistent expectation of RMB exchange rate appreciation and depreciation.
Business development preceding system formation
Currently, there is no unified opinion in China on the development of offshore finance. From the definition of concepts to development directions and approaches, different groups hold different views. In fact, the development of domestic offshore finance faces many uncertainties. Therefore, it is advisable to start by optimizing the existing offshore financial business, first expanding the business scale, then expanding its scope, driving related system construction, and ultimately perfecting the entire domestic offshore financial system.
Specifically, the product system can start by optimizing services related to offshore trade, opening up basic business such as RMB settlement and offshore deposits and loans, and then developing trade-related risk management products. The market system can start with basic currency markets, bond market systems, and derivative markets with actual needs, and then expand to equity markets. The institutional system can gradually open licenses from large financial institutions to medium-sized financial institutions, followed by multi-level agency functions. The regulatory system should first focus on actual needs and the construction of financial stability, and then gradually expand to macro-prudential and financial regulation. The tax system should initially refer to advanced global offshore financial tax systems, and then refine and optimize according to domestic demand. The legal system should first match business needs, starting with the development of management measures in a more targeted and precise manner, then gradually upgrading to systematic offshore laws and regulations. Infrastructure support should first rely on SWIFT and CIPS systems for transactions, and then gradually enhance CIPS offshore recognition.
Currently, on the supply side, China's domestic offshore finance is still in a relatively early stage of development, and has not yet formed a complete product and service system. From the demand side, the application scenarios for RMB-denominated offshore finance are increasingly diverse, and the real economy's demand for domestic offshore finance is growing. While China's capital account is not fully open, leveraging the important role of China's pilot free trade zones in promoting financial openness and institutional innovation, and constructing a domestic offshore financial market that aligns with the needs of the real economy can help enhance the financial capability of serving the real economy under the premise of safeguarding national financial security, assisting the real economy in actively responding to changes in economic globalization, and achieving more sustainable high-quality development.
来源：China Forex （《中国外汇》英文刊）
文字：高皓 邓志超 许嫘
编辑：林尧埼
审核: 孙子谋
