The Study Of The Dynamic Effect Of International Capital Inflows On China’s Economic Growth

With the increasing development of economic globalization, international capital flows has become normal state among international economic. With several large-scale waves of international capital flows, the global economy has rapid development. But in recent two decades, the negative effect that international capital flows on the economic growth began to appear. The worldwide outbreak of several large-scale crises was closed related with international capital flows. With the outbreak of the global financial crisis triggered by the American subprime crisis, It was the negative effects international capital flows have on a sustained and stable economic growth became increasingly highlight, especially whole economic growth of emerging market economies has severely affected after the outbreak of the global financial crisis of 2008. Scholars from various countries began to pay close attention to the long-term effects of international capital flows on a country’s economy. The paper focus on the impact that the international capital flows has on our economic growth factors and Chinese economic growth under the system theory of view on the basis of system analysis of the relationship between economic growth and factor inputs.This paper attempts to use complex systems theory, make the economic growth as a system, analyze the role of evolutionary mechanisms of international capital flows and economic growth of the system, in accordance with the transmission mechanism of international capital flows impact on economic growth, Study the process of the varying forms of international capital inflows for the non-linear influence of economic growth, revealing the complex influence of international capital movements for China’s economic growth.In the discusses process of the article, making factor inputs during the economic growth as the intermediate variables affecting economic growth of different forms of international capital flows, analysis of the different mechanisms of different forms of capital on economic growth factors, and thus systematically put international capital flows inner and economic growth into a unified system, different feedback mechanisms in the different form of inflows and economic growth, while analysis mutual influence of different forms of capital inflows between each other using VAR tools, and then propose three main form of adapting our international capital flows——the proposals about FDI, FPI, external debt and economic development harmoniously.Paper expounds the system structure of China’s economic growth, explains the basis this thesis research. The author mainly combs the development of the theory of economic growth so far, found that the existing research on the study of the economic growth without in systematic consideration of all factors affecting economic growth, simply consider that the factors impact on economic growth, and in order to improve the economic growth theory, the author proposes that establish the model of economic growth, and further researches on economic growth system, and, in turn, combing the main situation of growth factors in China, then using VAR model system to analysis the dynamic relationship between biochemical economic growth and the inputs in the domestic. On this basis, the paper focuses on the following aspects of content.The first is to analysis the dynamic effects between the international direct investment and economic growth. The system combs the development of international direct investment in our country with the continuous development of our country economy, and on the basis of this, the author analyzes the internal and external factors and feedback mechanism of the international direct investment affecting China’s economic growth, and then illustrates the international direct investment to the influence degree of various economic factors with the variance decomposition of VAR model, at the same time, using the impulse response function of the VAR model to analysis shock effect for the factors of economic growth when international direct investment changes in a unit.Secondly, the paper analyzes the dynamic effect of between the international securities capital inflows and the economic growth in China. The author combed the condition of international securities and capital in the process of economic development in our country, at the same time, using the theory of systematic to analyze the internal and external factors about international securities capital into affecting China’s economic growth (elements), and using system dynamics feedback model to analyze the impact of international securities capital influence mechanism of our country’s economic growth. Finally, this section analyzed the influence degree of international securities capital inflows on China’s economic growth and international securities capital flows into the impact of factors on China’s economic growth using the VAR model. The study found that the effect that introduction of the international process of securities capital impacts on the economy is more obvious. At present, the introduction of international securities capital and capital most is short-term; this is the main cause of China’s capital market volatility.Again, the author analyzed the dynamic effect of external debt inflows and economic growth in China. The author systematically studies the specific mechanism of the foreign capital inflows to our country economic growth, and embodied the human capital formation effect, the material capital formation effect, technology effect. At the same time, the author by using VAR model verified the foreign capital inflows to our country economic growth does exist, but the size of role has the restriction of the economic development in host countries.The last is the international capital inflows and the empirical analysis of the dynamic effects of economic growth. The author through the establishment of plural regression model, VAR model, the result indicates that the influence of foreign direct investment (FDI) and foreign securities investment (FPI), external debt and economic growth is nonlinear. From the results of the VAR model, FDI is active force in the development of China’s GDP, second the inertia of GDP increment is also very important factors on capital; FPI inflows has a slight effect on our country economy growth, in our country, the role of in the existing system is positive; The influence of external debt than FPI effect is more obvious, but also not especially significant, but its impact on itself fluctuation is very big, is an unstable elements in our country economic development, especially in the financial markets, impulse response figure also further illustrates this point. On the basis of the above research, the author put forward his own policy recommendations about the introduction methods of foreign capital in the process of China’s economical development, as well as the practice of foreign investment.