Estimation of RMB Stock outside Mainland China and Empirical Research on Its Influencing Factors

Abstract

After selecting new estimating caliber and data from 1978 to 2003, we estimate the domestic money demand function. And then the indirect estimation method is used to estimate the RMB stock outside mainland China from 2004 to 2013, meanwhile we make an empirical research on the influencing factors of the RMB stock outside mainland China. The outcome shows that the RMB stock outside mainland China increases from 288.3 billion yuan in 2004 to 2270.6 billion yuan in 2013 and the number increases to the maximum in 2010. The main factors influencing the RMB stock outside mainland are the fluctuation of exchange rate, the developed degree of financial market, the degree of dependence on foreign trade, per capita GDP and the inflation rate. Finally the article puts forward some conclusions and suggestions on enlarging the scale of the RMB stock outside mainland China and then internationalizing the RMB.
Key words: RMB stock outside Mainland China; Money Demand Function; Influencing Factors; The Developed Degree of Financial Market