Internal And External Balance Of Conflict And Excess Capital Mobility

Excess capital liquidity has become a global economic phenomenon with a result of a large amount of capital investing into real estate, basic resources and various financial assets, leading to a rapid rise in asset prices. And the rising of prices of the resources will promote the prices of consumer goods. If there're some stimulating factors, some capital will also flow into consumer goods which will lead to a rapid rise of prices. Liquidity surplus to trigger economic overheating, a bubble economy, has become a universal concern about the economic phenomenon. The current liquidity surplus has also become an important variable which plagued China's stabile macro-economic growth and balance both inside and outside.This paper studys the capital liquidity problems China encounters today through two factors. The one is a study how the developed countries deliver financial capital to developing countries to achieve a high yield against the background of globalization, resulting in surplus of capital liquidity. Another one is a study in intrinsic relationship among "Government intervention--opening to the outside --economic growth-- Excess capital liquidity" in China and their formation mechanism. Based on economic integration and financial globalization for the research background, capital liquidity surplus to make a breakthrough, liquidity mechanism along the main line, this paper carries out an empirical study according to international norms of academics on the real economy and the virtual economy, the international financial environment, international liquidity trends and China's economic characteristics of a transition, systematically analyzes institutional background, micro-forces and the operation mechanism of the Chinese excess capital liquidity, and with this study, this paper builds up a practical regulatory framework.This paper firstly sorts out the relevant literature and research on international capital flows, internal and external balance in an open economy and the capital liquidity surplus, defines the concept of the capital liquidity surplus, and analyzes the characteristics of global capital flows and the status of capital liquidity surplus in developed countries and developing countries, and also analyzes China's basic state of capital flows and the features of China's capital liquidity surplus. The study of the reasons for China's capital liquidity surplus has three angles for analysis: First, from the imbalance of the real economy and the virtual economic. The steps of using the real economy and the virtual economy model to analyze the operation of capital flows are: economization→marketing→monetary→capitalization→asset securitization→virtual economy→excess capital liquidity. Second, the paper studys the paper from institutional reasons for the imbalance of the transition period of the old and new systems, including the relationships of government-led economy and the excess capital liquidity, economic restructuring, the evolution of foreign trade system, exchange rate system, interest rates system, land property system and the structural contradictions of China's financial industry and excess capital liquidity. Third, the paper analyzes the nature of financial capital globalization and reasons for the global excess capital liquidity using internal and external balance model in an open economy, at the same time, the conflict and continuity of China's internal balance and external balance under the condition of opening up are also studied. After the analysis and study of the impact and result of the excess capital liquidity, comes to the conclusion that a country's rapid capital flows is constantly benefit to developed countries, however, a crisis for developing countries, whose essence is to grab the wealth of developing countries through a more sophisticated, more hidden financial means.This paper's view is that in the background of financial globalization, China's excess capital liquidity resulted from the imbalance of three aspects: First is the imbalance of the real economy and the virtual economic. Second is the institutional imbalance in the transition period from old to new systems. Third is the internal and external balance in an open economy. In order to fundamentally solve China's excess capital liquidity problem, financial globalization is demanded as a strategic basis, adaptation to the adjustment of international monetary system and the general trend of international capital flows is also demanded as a strategy to ensure three balances with the focus of national security, they are the balance of the real economy and virtual economy, the economic structure balance in the transition period of the old and new systems, the internal and external balance in an open economy. Improve the financial operation mechanism, restructure the financial market and the operation mode of micro parts to adapt and release the excess capital liquidity situation.