Based on currency anti-substitution perspective on China’s high M2/GDP abnormal analysis and empirical testing, research results show that: under the current foreign exchange management system, high foreign exchange reserves and the ineffective offsetting mechanism are the main causes leading to M2/GDP increase.

At present,RMB internationalization has a lot of benefits,but at the same time it faces the currency substitution risk,RMB internationalization of risk reversal,the impact of foreign capital and currency anti-substitution risks.

An Empirical Research on the Relation between RMB Exchange Rate and Currency Substitution;

An Empirical Analysis on the Exchange Rate Determination Model Based on Currency Substitution;

Control RMB Exchange Rate Reform Properly: A Behavioral Economics Analysis Based on Currency Substitution in China;

The main purpose of the paper is to test whether there is money substitution in the period of managed floating exchange rate in China by introducing Johansen (1988,1989) cointegration approach.