One Belt and One Road and regional disparity of RMB settlement of cross-border trade: a study based on provincial panel data in China
【Abstract】Both the planned areas of the “One Belt and One Road” initiative or the distribution of RMB settlement volumes of cross-border trade show obvious regional differences. Based on the regional difference, extending the method to calculate the performance index and using the Dagum (1997) method, this paper computes the performance index of all provinces and regional differences of RMB settlement of cross-border trade in China, and examines the main influencing factors. The results show that the performance index of the eastern area is apparently higher than that of the central and western regions, and that of the western region is the worst; the overall gap of all the three regions is shrinking but the contribution rate of regional difference is always the highest; the main influencing factors are differentiated obviously from region to region. The planned area of “One Belt and One Road” centers on the eastern and western regions, and this would challenge the central region. Therefore, different regions should enhance cooperation to raise economic development level and RMB settlement of cross-border trade performance level and accelerate the process of RMB internationalization.
【Keywords】 One Belt and One Road construction; RMB settlement of cross-border trade; performance index; Gini coefficient;
(Translated by HUANG Yunqiu)
. 1 According the dividing standards made by the China's National Bureau of Statistics, the eastern China includes Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, Hainan, 11 provinces in total; the central region covers Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei and Hunan, 8 provinces in total; and the western region covers Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang, 12 in total. [^Back]
. 2 The FDI performance index was put forward by United Nations Conference on Trade and Development (UNCTAD) in 2002. The definition of FDI performance index is: the ratio of a country’s FDI share in global FDI flows to its GDP share in global GDP. If the index is more than 1, it means the country’s good performance in attracting FDI; if the index is 1, indicating normal performance; and if the index is less than 1, meaning bad performance. [^Back]
Chen, J. The Journal of Quantitative & Technical Economics (数量经济技术经济研究), (7) (2014).
Chu, Y. & Gao, Y. International Economic Review (国际经济评论), (2) (2015).
Dong, Y. & Wang, K. World Economy Studies (世界经济研究), (10) (2010).
Li, J. World Economy Studies (世界经济研究), (2) (2011).
Liu, H. & Zhao, H. Statistical Research (统计研究), (6) (2012).
Liu, X., Wei, Y. & Li, G. Economic Research Journal (经济研究), (7) (2004).
Sun, J. Studies of International Finance (国际金融研究), (4) (2014).
Tan, X. & Zhou, M. Journal of International Trade (国际贸易问题), (2) (2015).
Xu, J. & Yang, L. Journal of International Trade (国际贸易问题), (2) (2005).
Ye, J. & Wang, J. Journal of International Trade (国际贸易问题), (1) (2014).
Yin, J. International Economic Review (国际经济评论), (4) (2011).
Alexander Swoboda, (1968) “The Euro-Dollar Market: An Interpretation,” Princeton University.
Annette Kamps, (2006) “The Euro as Invoicing Currency in International Trade,” European Central Bank Working Paper Series, No. 665, August.
Camilo Dagum, (1980) “Inequality Measures between Income Distributions with Applications,” Eonometrica 48(7), 1791-1803.
Grassman and Helpman, (1991) Innovation and Growth in the Global Economy, Cambridge: MIT Press.
Linda S. Goldberg and Cedric Tille, (2009) “The Dynamics of International Trade Invoicing,” European Central Bank-Bank of Canada Seminar, Frankfurt, Germany, June 5.
Obstfeld Maurice and Kenneth Rogoff, (1996) Foundations of International Macroeconomics, Cambridge: MIT Press.
Paul Krugman, (1984) “The International Role of the Dollar: Theory and Prospect,” NBER Working Paper.
Philipp Hartmann, (1998) “The Currency Denomination of World Trade after European Monetary Union,” Journal of the Japanese and International Economies 12(4), 424-454.
Ronald Mckinnon, (1979) Money in International Exchange: The Convertible Currency System, Oxford: Oxford University Press.