Study Of Modern Financial Organization System

â… . The significance of this topicAs a large economy, China should play a significant role in global economy and finance, thus it will be an unavoidable trend for China to carry out capital account liberalization, and China's entering WTO has also quickened this trend. In fact, the government and the academia both accept such a perspective that the significance of capital account liberalization speaks for itself. Many scholars and sections have made abundant researches and a number of important conclusions have been drawn, such as: in the process of capital account liberalization, direct investment account should be released earlier than indirect investment account; capital account should be open first to institutions and then to individuals, first to nonresidents and then to residents; long-term investment account should be released earlier than short-term investment account. Meanwhile, the indispensability, preconditions, risks and income of capital account liberalization have been discussed thoroughly, however, the problem of how to realize China's capital account liberalization step by step has not acquire an accordant solution. Meanwhile, the persistent growth of the world economy, the advancement of science and technologies and many other factors have brought great changes in the international financial market in the form of economic globalization, the liberalization of international finance and asset-backed securitization. The economic and financial crises that appear frequently these years also call for our attention to consider capital account liberalization in depth, and this dissertation is written under such a background in order to study on the sequence of China's capital account liberalization.The worldwide viewpoints on the sequence of capital account liberalization can be divided into three types: the first type can be described as "gradualism", and it's representative is Mckinnon, who considered the liberalization of capital account as the final phase during the process of economic liberalization and rapid growth; The second type is "radicalism", for instance, in Lal (1987)'s view, the liberalization of capital account, the reform of trade, the implementation of floating exchange rate system and the reform of fiscal institution should be carried through simultaneously in the early days of economic reform; The last type can be referred as "middle-of-the-roader", and the economists who adopted this perspective paid more attention to the sequence rather than the pace of capital account liberalization. Theyemphasize that the capital account liberalization should be one part of macroeconomic and structural reform, and the balance between national sections and foreign sections is the keystone. As in Fischer's view, the benefit of capital account liberalization is obvious, however, great risks may exist when capital account liberalization is implemented with fragile financial institutions and macroeconomic frames. Thus the policymaker should maximize the benefit of liberalization as well as minimize its cost. The view of "gradualism" ignores the cost of capital control, especially under the circumstance of postponing capital account liberalization s.d., in which the cost of capital control keeps on rising and the efficiency of capital control keeps on declining. The "radicalism" neglects the risks brought by capital liberalization. The "middle-of-the-roader" also overlooks the speed of capital account liberalization. There are two different standpoints on the sequence of capital account liberalization in China. One is that China's capital account will be liberalized naturally along with the financial and economic development of China. This kind of standpoint overestimated the power of economy itself and underestimated the risks caused by capital floating freely, and it is passive and negative. Te other is that capital account liberalization should be avoided as long as possible since it may bring great risks. This view, which seems to be cautious, ignores the enormous benefit of capit...