Research On The Cross-border Money Laundering In The Process Of Capital Account Openness In China

With the acceleration of economy globalization,the opening process of China capital account is accelerating,and the scale of cross-border capital flow is becoming more and more complicated.A large quantity of capital flowsprovide powerof economic growth,but at the same time,it also intensify and expand the financial risk,especially the illegal cross-border money laundering which is easy to be overlooked and bring harm to the financial security and stability in our country.This paper studies the problem of cross-border money laundering from a macroeconomic perspective.The main purpose isto understand how thechanges of macroeconomic policy impact the scale of money laundering,find out the best fit point between macroeconomic policy and anti-money laundering,and consummatethe anti-money laundering supervision mode.At the same time,it provides policy reference for preventing the risk ofcross-bordermoney laundering in the process of Chinacapital account openness,to further promote the economic development in China.This paper is guided by economics,finance,management science,criminology theory,based on the present situationof China capital account openness and cross-border money laundering.It combines theanalysis methods of theoretical and empirical,historical and logical deduction,case and analogy deduction,and dynamic and static,to analyze and discuss the problems of cross-border money laundering under the background of Chinacapital account openness.At the same time,this paper calculates the size and distribution of cross-border money laundering in China.It analysesthe correlation betweencross-border money laundering and capital account openness and how the distributioninfluenced by foreign direct investment and import and export trade using the VAR model and fixed effect mode of panel data.Finally,combining the theoretical and empirical analysis conclusion,this paper puts forward five suggestions on the construction of cross-border money laundering supervision system in the process of capital account openness.According to the structure of the article,the paper is divided into fourmain parts:The first part consists of the first two chapters.The first chapter is the introduction,which introduces the background,significance,purpose and methods of the research,and gives a general overview of money laundering and anti-money laundering.The second chapter is the basic theory and existing research results.It elaborates the capital flow theory,broken window theory,asymmetric information theory,cost and profit theory,financial supervision theory,and gives a general overview of the openness of the capital account.At lats,it summarizes the research results on capital account openness and cross-border money laundering.The second part is the third chapter,which is the theoretical analysis.It puts forward a theoretical model which explainshow the utility level of money launders,financial institutions and government changeswith the opening of capital account.It sums up the different stages of the capital account openness,and analyzes the scale,the way,the risk and the influence of the capital flow.It indicates that the risk of cross-border money laundering shouldbe concerned.It summarizes the definition,channels,reasons,hazards and surpervisn modelsof cross-border money laundering,and mainly analysesthe impact of capital account opennessto cross-border money laundering.And the theoretical model is used to analyze the deep reasons.The third part concludes the fourth,the fifth and the sixth chapter,which is the empirical analysis part.Based on the fourth chapter,it first calculates the scale of cross-border money laundering.In the fifth and the sixth chapter,VAR and fixed effect model of panel data analysisare used for empirical analysis.On the one hand,it tests and verifies the overall correlation between capital account openness and cross-border money laundering by using VAR model;on the other hand,it caucalates the distribution of the cross-border money laundering scale using modified WGM and analyzes the impact of foreign direct investment and import and export trade onthe distribution.The forth part is the seventh chapter,which consists of the conclusions,recommendations and future prospects.Through the theoretical and empirical analysis of the impact of China capital account openness on cross-border money laundering,the relevant conclusions are drawn.And it put forward policy recommendations in five aspects including legal system,regulatory model,punishment mechanism,cash management,linkage mechanism to improve the cross-border money laundering regulatory mechanism in China.The conclusions of this paper are as follows:First,from the theoretical analysis point of view,the opening of the capital account increases the scale of cross-border money laundering from two aspects of subjective and objective,which conclude the widening channel and the changing of motivation.From the subjective stand,after the opening of the capital account,the optimal amountof money laundering for money launders increases,thus the willing to engage in cross-border money laundering activities increases.At the same time,financial institutions' reports decline in cross-border money laundering transactions due to higher yields on cross-border operations and greater difficulties in reporting.The reporting motivation is relative inadequate.From the objective stand,the more open the capital account,the more channels of capital flows,and the more funds used by moneylaunders.As results,social welfare losses increase.So the opening of capital account enhanced the salce,the complexity and concealment of cross-border money laundering,which brings newchallenge to themoney laundering regulatory.Second,from the empirical analysis,capital account openness has a positive effect on cross-border money laundering,but there is a certain lag in this positive effect.After the openning of the capital account,the scale of cross-border money laundering will not increase immediately,but lag for some time.At the same time,the scale of cross-border money laundering in China has been increasing year by year,mainly in some developed countries and regions in Asia and Europe,where the largest area of money laundering is Hongkong.The scale of money laundering will be affected by foreign direct investment and import and export trade.For most countries and regions,the more foreign direct investement and export and import trade,the larger amount of cross-border money laundering from China.But there is an exception,if a country or a region has an effective anti-money laundering mechanism,the phenomenon can be prevented.With the deepening of capital account openness,the impact of foreign direct investment on cross-border money laundering is greater than the impact of import and export trade.