Research On Capital Account Control And Opening

Capital account control is a kind of restrictive measure which influences capital transfer and business transactions including the inflow and outflow of the capital and the assets of residents and non-residents. Countries are divided into three categories which are countries with general capital control, countries with partial capital control and countries without capital control according to the control degree. According to the trend of the world economy and finance, it is a mainstream to release capital control and realize full convertibility of currency.There are both advantages and disadvantages in capital account opening. The advantages are obvious. Firstly, the capital can be collocated according to the market and the collocation efficiency will be increased. Secondly, free flow of the international capital will inspirit practicality fund investment, and foreign direct investment will accelerate the transfer of funds and technology. Thirdly, the financial market will be developed and the efficiency in financial system will be developed. Fourthly, the expensive cost in capital control will be cut down and the corruption in the control environment will be root out. Of course, there also exist some risks going with the capital opening. For instance, the possibility of being attached by exterior world will be enhanced, financial crisis transmitting approaches will be increased. Therefore, there still exist capital control in different degrees in many countries including developing countries. According to the statistics issued by IMF, over 70% IMF member countries have control in different degrees on direct investments, estate businesses, securities transactions and financial derivative products.The dissertation centers on the theoretical approach of the capital account opening and control; capital account opening estimation; the efficiency of capital account; risk analyses on capital account opening; the experiences from other countries' capital account opening; the mode and strategy of our country's capital account opening. The main points are stated as below:The first is theoretical approach. The paper makes a theoretical approach on the control and opening of capital account. It states clearly the capital flow theory, welfare efficiency theory of capital account opening, capital account control system, sterilization of capital flow, capital flow and currency crisis theory. The paper made a breakthrough in following three aspects: by study on capital account opening estimation, The paper made a study on an index system to remark capital account control and opening in China, made a study on the efficiency of capital account and set up investment earning analytical mode, and made a respective study on the efficiency of capital account under free, control and strict control environment by the application of econometric method. It made a further study on the stability of capital investment strategy. The paper, based on representational currency crisis alarm mode found by Frankel and Rose, also set up a crisis alarm mode which is suitable for our capital account opening..The second is empirical approach. The paper respectively makes a empirical approach on capital opening estimation, the efficiency of capital account control and the risk of capital account opening. By comparing the different approaches in other countries, and according to our situation, by applying an estimation standard system of our country's capital account control and opening situation for effective estimation, the result shows that our country's capital account opening is at medium-opening level. The paper made a study on the efficiency of capital account and set up investment earning analytical mode, and made a respective study on the efficiency of capital account under free, control and strict control environment by the application of econometric method. The result is the impact of the capital inflow of FDI is smaller than that of the control on the convertibility under capital account. In security investment and other investment, the impact of capital inflow control under capital account is larger, so the convertibility control is replaced by the capital inflow control. By applying Frankel and Rose and the Probit mode, the paper has got it testified that the potential element of currency crisis in China, it also has found out a set of major index for the prevention of currency crisis in our country.The third is the experience summary. The paper made a study on the evolution of capital account opening. Based on the comparison among different modes of capital account opening in other countries, the paper made a comparative analysis. By analyzing on the advantages and disadvantages of capital account opening in developed countries, developing countries and transitional economies like ( Russia and India ) , and made a summary of the experiences of capital account opening in other countries, which we can draw inspiration for our capital account opening.The fourth is strategy approach. The paper based on theoretical approach on capital account control and opening, practical analysis and experiences from other countries, made a comprehensive study on the precondition and environment of capital account opening, put forward the target of out capital account opening, development strategy, mode choice, and arrangement of opening order and the relative measures.The paper both has the theoretical approach, empirical analysis and strategy. The paper has a profound study on theory and a detailed empirical approach. Moreover, the strategy is practical. The paper is of good reference for the system reform of foreign exchange and the opening of our capital account in our country.