12 January 2026, Volume 0 Issue 1

    

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  The International Currency System and the Internationalization of RMB from the Perspective of Currency Geopolitics

  Cheng Xin, Zhou Yinggang, Bei Zeyun

  Studies of International Finance. 2026, 0(1): 3-17.

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  This paper investigates how currency geopolitics rivalries influence the international currency system and RMB internationalization by examining the systemic importance of currency exchange rates.
  The paper begins by analyzing the historical evolution and current transformation of the international currency system. A currency's international importance depends not only on underlying economic strength but critically on currency geopolitics, which determines how economic power converts into global currency rule-making authority. The recent weaponization of the US dollar has undermined global financial stability and reduced other countries' welfare, exposing systemic vulnerabilities in the current currency order and creating urgent demand for reform.
  Existing studies of currency internationalization predominantly focus on cross-border usage metrics, a low-frequency perspective ill-suited to capturing the impact of frequent currency-political events in today's volatile global landscape. This paper offers a novel approach by evaluating RMB internationalization through exchange rates—price signals that promptly embed cross-border information flows. This paper examines the RMB's systemwide importance along two dimensions, anchor currency and safe-haven currency characteristics. Evidence reveals that the RMB's global influence has fluctuated yet intensified under currency geopolitics rivalries, while demonstrating emerging safe-haven capabilities.
  Based on these findings, this paper proposes several strategic recommendations. Firstly, China should learn from historical precedents by leveraging the Belt and Road Initiative to expand the RMB's currency sphere, promoting its use in trade settlements through frameworks like RCEP and cross-border payment systems such as CIPS, while strengthening pricing power in commodities, particularly oil and critical metals.
  Secondly, policymakers should encourage Chinese enterprises and financial institutions to expand globally while maintaining careful balance between openness and security concerns. This strategy must avoid the industrial hollowing-out by prioritizing domestic economic development as the foundation for international engagement.
  Thirdly, authorities must carefully manage the risk-benefit trade-offs inherent in RMB internationalization, particularly navigating the trilemma among capital account openness, monetary policy autonomy, and exchange rate stability. A“stability-first”approach through gradual reforms, including improvements to exchange rate mechanisms and development of offshore RMB markets, can help mitigate cross-border capital flow risks while advancing internationalization objectives.
  Fourthly, given the transformative potential of digital currencies in reshaping the international currency system, China should steadily advance digital RMB development while closely monitoring global trends in digital assets, including stablecoins and their regulatory implications.
  Fifithly, the paper emphasizes fundamental differences in governance philosophies between RMB and the US dollar internationalization. Unlike dollar hegemony, RMB internationalization aims not to dominate but to promote domestic economic development, safeguard monetary sovereignty and contribute to mutually beneficial international governance frameworks.
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  A Survey of the Measurement, Transmission Channels, and Effectiveness of Foreign Exchange Intervention

  Mei Dongzhou, Zhang Mi

  Studies of International Finance. 2026, 0(1): 18-32.

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  This paper begins by examining the measurement of foreign exchange intervention, noting a distinct polarization in existing methodologies. Some studies rely on non-public data sourced from news reports or private channels to identify intervention behaviors, while others develop proxy indicators using macroeconomic variables. Each approach presents strengths and limitations. Establishing a unified measurement framework applicable across different countries remains an area requiring further exploration. Future research could leverage text analysis and big data techniques to extract standardized, high-frequency intervention signals from central bank communications and market reports.
  Following that, this paper examines multiple objectives and transmission channels. These objectives operate at multiple levels and dimensions, often interlinked yet frequently requiring policy trade-offs or even incurring conflicts. Research on transmission mechanisms has progressively shifted from macroeconomic effects to microeconomic foundations. Integrated analyses of their micro-level behavioral foundations, including firm and investor behavior, remain underdeveloped. In frequently intervening economies, these channels also display time-varying features as market conditions, macroeconomic environments, and policy frameworks evolve. Future studies should develop integrated macro-micro theoretical models and apply time-varying parameter or regime-switching econometric methods to better uncover the context-dependent heterogeneity in intervention transmission mechanisms.
  Furthermore, this paper assesses the effectiveness of foreign exchange intervention. While most studies confirm its short-term efficacy in stabilizing exchange rates, prolonged and frequent deployment risks market distortions and policy dependency. Under managed floating regimes particularly, successful intervention hinges on accurately identifying exchange rate misalignments and potential bubbles. Future approaches could leverage machine learning and big data analytics to enhance detection of anomalous fluctuations and refine intervention timing. Moreover, as spillovers grow more pronounced, establishing international coordination mechanisms that balance national specificity with multilateral efficiency becomes imperative.
  Finally, with the ongoing reform of the RMB exchange rate formation mechanism, the People's Bank of China has shifted from routine direct intervention toward forward-looking communication and expectation management. Nevertheless, existing research still lacks systematic investigation into the operational mechanisms of central bank communication, market perception channels, and its coordination with monetary and macroprudential policies. As China further opens its financial sector and advances RMB internationalization, it is crucial to develop an intervention framework capable of mitigating endogenous exchange rate volatility while safeguarding against external risks. Building on China's experience, future research should analyze the synergy between foreign exchange intervention and other macroeconomic policies to build a theoretical framework with broad explanatory power, thereby offering valuable insights for emerging economies seeking both internal and external balance amid financial openness.
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  Financial Agglomeration, Financial Technology and Urban Economic Resilience

  Shu Wei, Wang Dong, Wei Shan, Li Xiuting

  Studies of International Finance. 2026, 0(1): 33-46.

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  The rise of FinTech has substantially strengthened financial institutions' capacity to collect and process large volumes of client data. While alleviating information asymmetry in finance, it has also extended the operational reach of financial services, thereby weakening the explanatory power of traditional financial geography hypotheses from an information theory perspective, particularly those grounded in information asymmetry and information hinterlands. This paper investigates whether the“capital + technology”model of FinTech development has significantly reshaped the evolution of traditional financial agglomeration patterns and financial formats, and how it subsequently affects the mechanisms through which finance enhances urban economic resilience.
  Using panel data from 287 prefecture-level cities in China between 2011 and 2022, this paper constructs a comprehensive indicator system to evaluate urban economic resilience across three dimensions: resistance, recovery, and innovation. The study investigates the mechanism through which financial agglomeration influences urban economic resilience and examines the heterogeneous effects of financial agglomeration. The results indicate that financial agglomeration significantly strengthens urban economic resilience, with FinTech serving as a key mediating channel. Specifically, financial agglomeration fosters an enabling environment for FinTech development by attracting interdisciplinary talent, building solid financial infrastructure and shared technology platforms, and creating diverse financial scenarios accompanied by substantial business demand. In turn, advances in FinTech bolster urban economic resilience by improving the capacity to withstand external shocks, reducing information asymmetry, optimizing resource allocation efficiency, and promoting industrial structural upgrading—thereby enhancing the economy's adaptability to new environments.
  Cities in non-eastern regions often exhibit underdeveloped financial infrastructure, limited capital accumulation, and lower levels of marketization. Small cities frequently encounter structural constraints, including scarce financial resources, a monocultural industrial structure, and weak capacity to withstand economic shocks. Cities with higher degrees of openness to the global economy tend to demonstrate stronger institutional alignment and a more dynamic environment for financial innovation. In such contexts, the resource integration effect, information spillover effect, and risk management function of financial agglomeration are more effectively realized, thereby significantly enhancing urban economic resilience. By treating FinTech development as a threshold variable, this study identifies a nonlinear relationship between financial agglomeration and urban economic resilience.
  The findings provide a robust empirical basis for understanding the conditional effects of financial agglomeration on urban economic resilience. Based on these results, the study proposes three policy recommendations: first, optimize the allocation of financial resources and strengthen support for the real economy to prevent disengagement between financial systems and productive economic activities. Second, adopt differentiated policy measures tailored to cities at different stages of resilience development, leveraging FinTech to maximize the resilience-enhancing effects of financial agglomeration. Third, enhance targeted policy support and institutional guidance—particularly in structurally challenged regions such as Northeast China—to assist real industries in navigating the complexities of economic transformation.
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  The Impact of Anti-Dumping Investigations on Trade Credit—The Micro-Level Transmission Mechanism of External Shocks in Domestic Markets

  Zhou Xianping, Sun Peixiang, Pi Yongjuan

  Studies of International Finance. 2026, 0(1): 47-61.

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  The world is undergoing profound changes unseen in a century, with the field of international trade being particularly affected. Global trade frictions have continued to escalate. As a key node in global value chains and an important participant in the world economic system, China has become one of the economies most frequently subjected to anti-dumping sanctions. The persistent imposition of such sanctions has deteriorated the external business environment of firms. These shocks not only exert substantial influences on enterprises directly involved in investigations but also generate spillover effects within the domestic economy. Trade credit, as an important financing instrument based on inter-firm commercial credit, may experience structural adjustments in its scale or maturity. Such adjustments can alter firms' production and operational behaviors, thereby forming a transmission channel through which external shocks propagate along supply chain networks.
  Against this backdrop, this study employs data from 2003 to 2019 and matches industries subject to anti-dumping investigations against China to A-share listed firms to examine the impact of anti-dumping shocks on corporate trade credit. The empirical results indicate that anti-dumping shocks significantly reduce listed firms' trade credit liabilities, while exerting no significant effect on their trade credit assets. This suggests that anti-dumping shocks primarily influence firms' financing structures through a reduction in trade credit liabilities. The negative effect remains robust across a series of sensitivity analyses. Mechanism analyses reveal that anti-dumping shocks suppress trade credit liabilities by weakening firms' operational performance and increasing financing costs. Moreover, a highly efficient and resilient supply chain network can mitigate the adverse impact of anti-dumping shocks on trade credit liabilities. This finding also indirectly reveals that anti-dumping shocks propagate within the industrialchain through the trade-credit channel, transmitting from the targeted industries to othersectors and ultimately giving rise to a systemic diffusion of credit risk. Further analyses show that the negative effect is more pronounced among firms with limited access to bank credit, lower-quality information disclosure, insufficient innovation capacity, state ownership, and weaker industry competitiveness. Additionally, this suppressing effect is particularly significant in regions characterized by lower levels of financial development and social trust.
  Based on these findings, this paper offers several policy recommendations to alleviate the impact of anti-dumping shocks on affected firms and their domestic spillovers. Firstly, China should actively exercise anti-discrimination investigation rights to safeguard the legitimate interests of domestic enterprises. Secondly, an emergency response mechanism should be established within the accounts receivable registration system to enhance its function as a“credit stabilizer”during crises. Thirdly, targeted support mechanisms should be developed for firms directly affected by shocks. Fourthly, corporate financing channels should be further diversified. Fifthly, the overall resilience of supply chain systems should be strengthened. Sixthly, technological innovation should be reinforced to promote collaborative innovation between the government and enterprises.
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  Research on the Impact of Deposit Market Constraints on Commercial Bank Credit Risk—A Dual-Path Transmission under the Financial Regulation Background

  Wang Yanan, Liao Yuanjun, Liu Yunyue

  Studies of International Finance. 2026, 0(1): 62-75.

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  Against the backdrop of continuous global financial market development, the stability of commercial banks remains a core concern for regulators and policymakers worldwide. Deposit market discipline, serving as a crucial market-based monitoring mechanism, complements formal prudential regulation and has garnered significant attention due to its profound impact on bank behavior and risk-taking. The theoretical foundation of market discipline posits that well-informed depositors can supervise commercial banks and curb their excessive risk-taking primarily through the quantity constraint and the price constraint channels. Despite this robust theoretical underpinning, empirical findings regarding the impact of deposit market discipline on commercial bank risk are notably divergent. Furthermore, a significant gap exists in the existing literature concerning the understanding of its specific transmission mechanisms. Most studies treat the influence of deposit market discipline as a monolithic effect, failing to adequately disentangle the potentially differential impact pathways of quantity versus price constraints. Aiming to bridge this research gap, this study constructs a dual-pathway analytical framework. This paper proposes that the quantity channel and the price channel of deposit market discipline affect bank credit risk through different economic mechanisms.
  Utilizing a panel dataset comprising 203 commercial banks in China from 2009 to 2023, this paper employs a two-way fixed effects model for empirical testing. The study yields several important findings. Firstly, a statistically and economically significant positive relationship is identified between the intensity of deposit market discipline and the level of commercial bank credit risk. This result suggests that disciplining pressure from depositors may exacerbate banks' risk profiles. Secondly, heterogeneity analysis reveals that this relationship is more pronounced among listed banks, state-owned banks, and institutions with a higher degree of business diversification. This finding challenges the conventional assumption that market discipline exerts a uniform effect across all types of banking institutions, underscoring the necessity of incorporating institutional heterogeneity into regulatory design. Thirdly, the research empirically verifies that quantity and price constraints operate through separate channels. On the one hand, the quantity constraint, manifested through fund withdrawals by depositors, compels banks to expand their reliance on interbank liabilities as an alternative funding source. This shift in funding structure increases banks' exposure to liquidity risk and enhances their systemic interconnectedness, thereby elevating credit risk indirectly. On the other hand, the price constraint materializes as higher deposit interest rates, which directly compress banks' net interest margins and profitability. To maintain profitability levels, banks are incentivized to engage in riskier lending practices and investment activities, thereby directly amplifying credit risk through a distinct channel.
  This paper makes marginal contributions to the field. It not only examines the aggregate effect of deposit market discipline on credit risk, but also empirically differentiates and validates the operational mechanisms of the two specific transmission channels. Such analysis deepens the theoretical framework of market discipline and broadens the scope of related research. The conclusions provide a valuable theoretical basis and practical insights for financial regulatory authorities and commercial banks, aiding their decision-making processes and enhancing risk prevention capabilities within the evolving financial landscape.
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  Sovereign Debt Correlation Risks under the Impact of Global Major Events

  Chen Xuebin, Ma Ruiting

  Studies of International Finance. 2026, 0(1): 76-91.

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  Since the 21st century, global major events have occurred frequently, leading to increased financing costs for sovereign debt and ongoing pressure to repay debts in various countries. The escalation of sovereign debt risks has become an increasingly serious global issue. Meanwhile, economic globalization and financial integration have strengthened the connections among international financial markets. These complex correlations have become a key factor in speeding up risk contagion and triggering systemic financial risks.
  This paper uses the 5-year sovereign debt CDS spread data of 46 countries from December 2008 to November 2023 as samples, calculates market volatility based on the GARCH model, and further examines correlations across multiple time scales from the perspective of global major event shocks using the time-varying generalized dynamic factor model（tvGDFM）.
  The findings reveal several key insights. Firstly, global common factors are the main drivers of the resonance in sovereign debt market correlations, especially during the pandemic, which significantly altered systemic correlation levels. Secondly, correlation changes occur synchronously across multiple time scales, being most sensitive during instantaneous fluctuations and exhibiting both long-term memory and periodicity. Thirdly, sovereign debt market correlation can serve as an early warning indicator of global financial pressure: it facilitates risk sharing during stable periods and acts as an“amplifier”during crises, intensifying risk contagion. Fourthly, the increased global sovereign debt correlation after the pandemic is primarily driven by emerging markets or developing countries, which also face higher debt risk pressures.
  This paper makes four main contributions: Firstly, it effectively isolates the influence of global common factors on correlation by considering the high-dimensional features of sovereign debt CDS spreads, and integrating their time and frequency-domain correlation characteristics into a unified analytical framework. Secondly, it conducts an in-depth analysis and comparison of how the sovereign debt market's sensitivity varies at different time scales when impacted by major events, revealing how systemic events influence sovereign debt correlations. Thirdly, it accurately identifies the resonance phenomenon of sovereign debt correlations during major events, and examines the heterogeneity of risk spillover and pressure between developed countries and emerging or developing economies. Fourthly, it finds that sovereign debt correlation can be an important tool in risk management for predicting global financial pressure, underscoring its significance.
  Based on these findings, this paper offers the following policy recommendations. Firstly, make scientific judgments on the types, impact ranges, and intensities of global major events from multiple perspectives, reasonably predict the global financial pressure situation, and implement differentiated long-term and short-term risk control measures promptly when global sovereign debt risks rise. Secondly, include the degree of risk correlation in the sovereign debt risk assessment system, clarify the characteristics of the correlation structure across different types of sovereign debts, and develop risk governance mechanisms tailored to various conditions. Thirdly, focus on external markets with a high degree of correlation with China, actively participate in global sovereign debt risk governance, and enhance policy coordination and risk prevention among financial regulatory authorities of various countries.
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  The Influence of China's Structural Monetary Policy on Corporate Financing from the Perspective of Credit Default

  Lan Xiaomei, Gong Liutang, Yang Shenggang, Chen Sihan

  Studies of International Finance. 2026, 0(1): 92-107.

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  Currently China's structural monetary policy system has progressed from the exploratory stage to a stage of institutionalization and standardization. This paper constructs a macroeconomic model incorporating heterogeneity in financial intermediaries' credit allocation, and in conjunction with the targeted liquidity constraint mechanism of structural monetary policy under the macroprudential assessment（MPA）framework, this paper investigates the influence of structural monetary policy with Chinese characteristics on corporate financing from the perspective of corporate credit defaults.
  The study finds that, firstly, under the sole implementation of structural monetary policy, when either highly qualified enterprises or low-quality enterprises experience credit default, the scale of credit extended by financial intermediaries to the defaulting enterprises decreases, but the cost of credit granted to these enterprises does not increase. Secondly, when macroprudential assessment（MPA）imposes targeted liquidity constraints on structural monetary policy, the scale of credit financing provided by financial intermediaries to both highly qualified enterprises or low-quality enterprises which experience credit default in the short term but increases in the long term. Thirdly, The prominent effect of policy coordination is that regardless of whether high-credit-quality firms default on their loans or not, the cost of credit financing for highly qualified enterprises has been rising in the long term.Regardless of whether low-quality enterprises default on their loans or not, the cost of credit financing for low-quality enterprises has been declining significantly and consistently over the long term. However, the economic system faces pressures and risks due to an excessively rapid increase in price level. It is recommended that monetary authorities continue to enrich the toolkit of structural monetary policy and optimize the balance of structural monetary policy through mechanism design, while more flexibly adjusting the indicators and parameters of the macroprudential assessment（MPA）to encourage commercial banks to improve the allocation of credit resources in order to alleviate financing difficulties and high costs for small and medium-sized enterprises, However, the monetary authorities still need to pay attention to the potential risks of structural monetary policy and closely monitoring the potential side effects of structural monetary policy and remaining vigilant against risks arising from high leverage and potential regulatory arbitrage under targeted monetary easing.
  This study contributes to monetary theory by highlighting the unique features of China's structural monetary policy relative to unconventional monetary policies in other advanced economies, enriching the theory of China-specific dual-pillar regulatory system in optimizing credit allocation and promoting real economy development.This study also provides a theoretical reference for enhancing the relevance and precision of financial support for economic structural adjustment and high-quality development.
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  ESG Information Transparency and Green Financial Governance: Evidence from Chinese Listed Firms

  Hou Xiaojuan, Xie Guanxia

  Studies of International Finance. 2026, 0(1): 108-120.

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  Enhancing the transparency of ESG（environmental, social, and governance）information has become an essential means of improving the quality of information flow and strengthening the functions of green finance in modern capital markets. The purpose of this study is to examine comprehensively how reducing information frictions in ESG disclosure affects corporate green financial governance in China.
  Using panel data of non financial A share listed companies from 2009 to 2023, this study employs a staggered difference in differences（DID）model with firm and year fixed effects to identify the impact of improved information transparency on the performance of firms' green financial governance. The data combine information from Bloomberg ESG disclosure records and several domestic databases, allowing for verification through alternative indicators such as mandatory disclosure policies, regulatory inquiries, and market opening shocks. Multiple robustness tests are used to ensure the validity of the results.
  The empirical evidence reveals that enhanced ESG information transparency significantly strengthens corporate green financial governance. Firms with higher transparency levels tend to exhibit more standardized management structures, more prudent investment allocation, and stronger commitments to sustainable development. Further analysis identifies two main mechanisms underlying this effect. First, an improved information environment mitigates internal agency conflicts by increasing managerial accountability and reducing opportunistic behavior, thereby improving operational efficiency. Second, it optimizes the external financing environment by reducing market uncertainty, easing financing constraints, and enhancing investor confidence.
  The study also finds that government agencies, institutional investors, and media supervision play an important role in reinforcing the relationship between ESG transparency and green governance. Governmental subsidies and environmental policy initiatives strengthen the incentive effect of transparency through fiscal support and reputational endorsement. Institutional investors contribute by advocating responsible investment and exercising ownership engagement, while media coverage increases public visibility and strengthens reputation based constraints on corporate behavior.
  This study enriches the literature on information disclosure and sustainable governance by providing micro level evidence from Chinese listed firms. It highlights the value of information transparency as a governance instrument that promotes corporate responsibility, resource efficiency, and long term competitiveness. The results lead to several policy implications. Firstly, regulators should accelerate the construction of a unified ESG disclosure framework, improve disclosure standards, and enhance supervision and accountability mechanisms. Secondly, market institutions should cultivate responsible investment culture and develop green financial instruments such as green bonds and sustainability linked loans. Thirdly, firms should strengthen internal ESG data management systems and integrate transparency principles into corporate governance to ensure consistency between disclosed information and actual practices. These efforts together will help advance China's dual carbon strategy and promote the high quality development of a sustainable financial system.