A Study On The Flow And Control Of The Short-term International Capital In China

Based on macroeconomic and international economic theory, this dissertation first summarizes previous research and calculates China's short-term international capital flows, then analyzes possible ways of China's short-term international capital flows, builds a theoretical model on the causes of short-term international capital flows and carries on empirical test. After that, this dissertation systematically combs the management system and the evolvement of regulation policy, and tests the effectiveness of China's capital control on short-term international capital flows by empirical analysis. Finally, based on comparative and case analysis, this dissertation proposes suggestion on how to governing short-term international capital flows in the pace of capital account liberalization, providing a reference for improving China's efficiency of short-term international capital flows.The main conclusions of this dissertation are as follows:(1)In recent years, short-term international capital flows in China presents variegate, flow hiding, increasing scale, and volatile trend. On the influence of the financial crisis, short-term international capital outflow in 2008 is especially worth attention.(2) Expectation of RMB exchange rate is the basic reason of short-term international capital flow in China, while the impact of asset price and interest differencial between domestic and foreign markets is insignificant. So, it is top priority to guide the arbitrage opportunities and arbitrage expectations to reduce short-term international capital flows. The short-term international capital inflows mainly attempt to arbitrage of the RMB appreciation in this stage. Therefore in order to effectively control the illegal inflows of non-compliance, China should perfect the RMB exchange rate formation mechanism, improve the RMB exchange rate flexibility, reduce pressure on RMB revaluation, achieve truly two-way floating at a reasonable appreciation of the RMB exchange rate ,break the one-way RMB appreciation expectations, reduce the profit margins of speculative capital. It can fundamentally eliminate the profitability of capital through various means of entry and exit of speculative motive.(3)China's short-term international capital inflows control policy is valid in the maintenance of domestic and foreign interest rate and lower the expected RMB appreciation. RMB Appreciation expectation have significant positive impact on short-term net capital inflows, that is, the higher the expected RMB appreciation, the greater the short-term net capital inflows. Domestic and foreign interest margin have a lag and positive impact on short-term international capital inflows. Therefore, the direct and indirect control is the second-best option under the condition that arbitrage expectation can not be completely eliminated.(4) Accompanied by appreciation of RMB and asset prices, more international inflow China through the form of FDI, therefore, China should attach importance to the covert short-term international capital flows which lies in such formal channels as FDI and establish of a comprehensive monitoring system of cross-border capital flows.(5) China should reform foreign exchange management model and gradually introduce price-based controls. While the mirror image of foreign exchange reserve is increasing rapidly, URR is a feasible way to control short-term international capital inflows as a price-based control instrument.(6) The control on short-term international capital flow is independent and ineffective to some extent, therefore, capital account liberalization is a tendency in the long run..