Author(s)

Yihong Su

Corresponding Author

Yihong Su

ABSTRACT

Since the pilot of the RMB settlement for cross-border trade in July 2009, the Hong Kong offshore market has formed an offshore RMB interest rate and the exchange rate, which are different from the onshore in the mainland market, and the market has a strong expectation of appreciation of the RMB, which constitutes the basis of arbitrage on cross-border speculative funds. The speculative and volatile nature of speculative funds will not only affect the effectiveness of the implementation of macroeconomic policies in China, but also seriously threaten the security of the national economic operation. Based on the Hong Kong offshore market, this paper discusses the mechanism of its influence on cross-border speculative funds, and analyzes the flow of cross-border speculative funds in China in order to provide direction for state to strengthen the supervision of cross-border capital flow from Hong Kong.

KEYWORDS

Hong Kong RMB offshore market, foreign speculative funds, flow channels