The Economic Impact Of China'S Capital Account Opening And Cross-Border Capital Flows

The opening of China's capital account and cross-border capital flows are important links in the macroeconomic and financial system.In the context of the financial opening strategy,in recent years,calls for further advancement of China's capital account opening have been rising one after another.More and more scholars are focusing on the issue of the impact of capital account opening and cross-border capital flows.There are differences.In different studies,the consensus of many scholars is that on the one hand,capital account control has become a shortcoming of China's full integration into the global financial and economic system,and the explicit and implicit distortions brought by the RMB's non-convertibility have become an obstacle to the efficient allocation of resources by the market.On the other hand,the multiple financial crises remind us that a coin have double side.The opening of the capital account and cross-border capital flows are two-sided.It can bring benefits as well as risks.In fact,as early as 20 years ago,China proposed to gradually realize the goal of capital account convertibility,and this reference has been repeated continuously for 20 years.In particular,the Third Plenary Session of the 18 th Central Committee of the Party pointed out: It is necessary to accelerate the realization of RMB capital projects.However,the determination of the direction of reform does not mean the stagnation of related discussions.As the uncertainty of the international economic and financial environment has increased,issues such as whether to "accelerate" the opening of the capital account and how to improve the cross-border capital flow management system are still being explored.in the process of.Therefore,this article focuses on the key issues in the study and combines the actual measurement data to empirically analyze the impact of China's capital account opening and cross-border capital flows on the macro economy and the financial system.In view of this,based on the realistic macroeconomic background,this article re-examines the economic impact of China's capital account opening and cross-border capital flows,and follows the logic of "proposing questions-theoretical logic deduction-theoretical expansion-empirical analysissummary" Framework research.The main conclusions are:The first chapter is the introduction.First,the concept of capital account openness and the concept of cross-border capital flows are systematically defined.The research content of this article is clarified,the research framework of this article is designed,and the research methods and innovations of this article are given.The second chapter systematically sorts out the theoretical basis of capital account opening and cross-border capital flows.By explaining the theory of financial restraint and financial liberalization,it strengthens the understanding of the theoretical basis of capital account opening.Then,through the international capital flow model and the IS-LM-BP model,the influence of different factors on cross-border capital flows is analyzed theoretically.The theoretical basis shows that: First,although liberalization is still the ultimate goal of open policies,the implementation of specific policies varies from person to person.Under different backgrounds,the impact of capital account opening and related policy coordination needs to be adjusted according to different situations.Therefore,the opening of China's capital account needs to design a suitable opening route based on its own economic situation.Second,cross-border capital flows cannot be allowed to flow freely.Because there are many factors that affect cross-border capital flows,different factors will lead to changes in the impact of capital flows over time.Therefore,the specific impact of crossborder capital flows still needs further research.The third chapter summarizes and sorts out the experience of capital account opening in typical countries and compares the effects of cross-border capital flow management in some countries.The study found that emerging market countries implemented capital account liberalization and financial liberalization measures in the context of high inflation.However,because these countries also implemented fixed exchange rate policies,they faced a debt crisis and currency in the face of dollar appreciation and local currency devaluation crisis.However,the completeness of the financial supervision system ultimately affects the impact of the crisis on the domestic economy.The more countries with relatively complete financial systems and relatively complete financial supervision systems,the less the impact of the financial crisis.In addition,many countries have experience with radical capital account opening,but the reality has proved that such a capital account opening method is not suitable.From the comparison of the effects of cross-border capital flow management in various countries,the essential difference between success and failure is whether to adopt tough control measures in the face of crises.The tougher control,the faster the impact of the crisis will be reduced.And the control measures are not strong,the impact will make the economy into a vicious circle.In addition,foreign exchange reserves are an effective tool for countries in the face of crises.On this basis,this chapter measures the openness of China 's capital account and the scale of cross-border capital flows.The results show that the openness of China 's capital account is currently in a relatively low level,and the scale of cross-border capital flows is stable.After conducting international comparisons and indicator calculations,the full-text study entered the core part.The fourth and fifth chapters mainly focus on theoretical research and empirical test on two practical problems facing China's capital account opening.Among them,the fourth chapter is the opening of China's capital account,the independence of monetary policy,and the choice of exchange rate system.For a long time,the academic community has paid close attention to the problem of "ternary paradox".Therefore,in this chapter,by constructing a TVPSV-VAR model with a hybrid innovative structure,we explore the impact of China's capital account opening on monetary policy and exchange rates,and the sequence of financial reforms.The results show that interest rate liberalization reform should precede exchange rate liberalization reform.And capital account opening,but this does not mean that there is a clear time boundary between the various financial reforms,that is,the exchange rate marketization does not have to wait until the interest rate marketization reform is completed,but it can have an intersection with the interest rate marketization.The same is true for the opening of the capital account.Although it is at the end,some policies can be coordinated in the interest rate and exchange rate reforms.Therefore,after gradually completing the interest rate marketization,the capital account should be gradually opened,which is also conducive to promoting the reform of exchange rate marketization.Chapter five explores the growth effect of capital account opening from a macro perspective.Studies show that: first,promoting capital account opening can promote economic growth,but because China 's capital account opening is relatively low at this stage,the growth effect is limited;second,Promoting financial deepening is helpful to alleviate the limited growth effect.Through continuous financial system reform,increasing the degree of financial deepening can effectively promote economic growth.Third,complete capital account liberalization is not desirable,and appropriate capital controls can prevent it.The role of risk.Therefore,at this stage,the degree of capital account openness should be improved.By deepening financial reforms,the efficiency of the financial system should be enhanced,and the ability of the financial system to prevent risks should be enhanced.Chapters six and seven focus on cross-border capital flow.In chapter six,the results of the multi-factor shock effects on short-term cross-border capital flows show that the impact of shortterm cross-border capital flows on spot exchange rates and forward exchange rates is asymmetric and has a stronger positive effect on spot exchange rates.The negative effect on the forward exchange rate is stronger.The impact of the spot exchange rate on short-term capital flows is lagging,but it will eventually return to equilibrium.The impact of forward exchange rates on short-term capital flows will weaken as the arbitrage space shrinks.Judging from the interactive relationship between interest rates and short-term cross-border capital flows between China and the United States,the impact of short-term cross-border capital flows has increased significantly with the deepening of interest rate liberalization.The stabilization time is significantly faster,while China is relatively slow.Finally,from the perspective of the relationship between short-term cross-border capital flows and asset price interactions,the stock market has become a major market that attracts short-term cross-border capital inflows in the context of gradually increasing openness of the stock market.It should also be noted that,as the policy effect of the real estate market restrains the impact of short-term cross-border capital flows,it is also necessary to pay attention to the impact of shortterm cross-border capital flows on the real estate market.Chapter seven explores the relationship between cross-border capital flows,financial stability and economic fluctuations.From the fitted trend of China's financial stability index,the study found that the stability of China's financial system has been steadily increasing since 2008.Although the financial stability fluctuated in 2015,the current level of China's financial stability is still in a relatively high range.From the model's impulse response analysis,it can be concluded that: first,with the improvement of China's financial stability,the impact of cross-border capital flows on financial stability has weakened,and the ability of the financial system to prevent risks and resolve external shocks has increased;The impact of short-term cross-border capital flows on economic growth is more active at this stage,which shows that China's economic transformation has already achieved initial results and the economic structure has improved.Third,the impact of cross-border capital flows on the price level will not converging to zero over time,which proves that cross-border capital flows are an important factor affecting commodity prices and require close attention.