Research On Financial Security State And Early Warning In China

Nnder the complex international and domestic environment,the spread of the 2019 novel coronavirus epidemic in the world and China continuing to promote the expansion of opening up,it is very important to maintain a country's economic security.Financial security is an important part in national economic security and even in whole national security.It is also an important basis for the steady and healthy development of a country's economy.In this way,how to maintain our financial security under the circumstances of expanding the opening up is a very important issue worthy of study.Therefore,this paper will study how to maintain our financial security during the process of expanding the opening up.This paper was launched as followed: Firstly,based on the analysis of the research background,the main research topics of this study and its significance are put forward.Combining closely with the new situation and the reality of expanding financial opening in China,this paper studies the risks faced by banking,securities and insurance industries and their impact on China's financial security;studies the impact of market-oriented reform of exchange rate(currency security)and the external debt market(debt security)on China's financial security.Using monthly data,VAR and stepwise regression model,this paper studies the main influencing factors and influencing mechanism of banking security,currency security,securities security,external debt security and insurance industry security.Secondly,on the basis of the above research,the corresponding indicators are selected and monthly data are used to measure the level of financial security and its changing trend in recent years.Then,this paper studies the coincidence of China's financial security level with the performance of the real financial industry,evaluates the level of China's financial security and research the early warning of financial security.Thirdly,this paper put forward research conclusions and relevant countermeasures and suggestions in order to maintain China's financial security.After a large number of model analysis,this study draws the following innovative conclusions.First,the exchange rate has a significant impact on financial security.Research shows that the change of foreign exchange rate has a significant impact on China's foreign debt security,and the securities market is sensitive to the change of exchange rate.Therefore,the fluctuation of China's foreign exchange rate has a direct impact on China's monetary security,external debt security and even the entire financial security.In the new situation,it is great significance to maintain the relative stability of foreign exchange rate.From the analysis of the influencing factors of exchange rate fluctuation,market factors have obvious influence on exchange rate fluctuation,but the research also finds that the influence of these market factors on exchange rate fluctuation is short-term,which indicates that the degree of marketization of exchange rate in China is not enough.However,with the development of foreign exchange rate system,China's foreign exchange rate will be affected by the fluctuation of exchange rate system and international currency market gradually.Therefore,accelerating the reform of the formation mechanism of exchange rate marketization is an important and necessary measure to prevent the huge fluctuation of exchange rate and maintain China's financial security.Second,there are many factors affecting banking security.The model study finds that the changes of foreign debt balance,insurance premium income,foreign direct investment level and the volatility of real estate price have a significant impact on banking security.This confirms the important position of banking industry in the whole financial system and even in the whole national economy,as well as the extreme importance of maintaining the safety of the banking industry.Third,expanding the opening to the outside world is conducive to the formation of market-oriented exchange rate mechanism.The VAR model study shows that the degree of openness has a negative impact on the exchange rate volatility in the short term,and reaches the minimum in the second period.Then,with the increase of impact period,the response intensity gradually decreases and finally approaches zero response.This shows that in the long run,the higher the degree of opening up,the smaller the fluctuation rate of exchange rate,which is conducive to maintaining the stability of the RMB exchange rate.That is to say,to continue to open up the financial sector is conducive to maintaining the stability of the exchange rate and even the national financial security.Fourthly the influence of market factors on the security of the securities industry is not significant.The study finds that money supply,macroeconomic prosperity index,consumer price index,interest rate and average P/E ratio of Shanghai A share have different effects on the volatility of the securities market,but the overall impact is not significant.To some extent,this shows that although the overall economic development is rapid,the development of China's securities market is still immature,the operation mechanism of the market is still not perfect,and the market development is not perfect enough,making the impact of the above important market factors on China's securities market still not significant.Fifthly,,the security of the insurance industry is affected by the income of residents and the level of economic development greatly.It is found that the main factors affecting the security of insurance industry in China are the level of household savings and the macroeconomic prosperity index,and the level of household savings and the macroeconomic prosperity index have a significant impact on the security of insurance industry.However,the impact of financial openness on the security of China's insurance industry is not obvious.To some certain extent,this also shows that the opening degree of China's financial industry is not enough,the competitiveness of the insurance industry is insufficient,and the industrial development potential is still great.Sixth,the level of economic development of a country has a great impact on financial security.The model study shows that the level of economic development of a country has a significant impact on the level of banking security,securities security,external debt security and insurance industry security.Economic development is the basis of the development of all industries.The level of economic development directly constitutes the basic factors of banking security and securities industry security,and has a significant impact on banking security and securities security.Seventh,there are many factors pulling down China's financial security level.This study finds that there are many factors that pull down the level of financial security in China.These indicators include not only macro-environmental indicators,such as macroeconomic prosperity index,consumer price index,foreign direct investment level,bank openness and economic openness to the outside world,foreign exchange reserve structure,real estate index and external debt ratio,but also financial market indicators,such as spot exchange rate,one-year fixed deposit rate,dollar index,etc.Therefore,China should conduct a more in-depth study on the early warning of financial security according to the above indicators,so as to maintain the financial security and stability in China.Eighth,since 2004,China's financial security index fluctuated downward and is expected to improve gradually in the next two years.The study shows that from January2004 to January 2008,the index rose;From January 2008 to February 2009,the index declined;From February 2009 to March 2011,the index rose;From March 2011 to March2015,the index declined;From March 2015 to December 2017,the index rose;From December 2017 to June 2019,the index fell.Meanwhile,the financial security early warning research shows that China's financial security level will gradually improve in the next two years.It can be seen that although China's financial security situation is generally controllable,there are still small fluctuations,and the overall downward trend is worth our vigilance.The research results of financial security early warning show that China's financial security level is expected to gradually improve in the next two years.Based on above conclusions,this study put forward some countermeasures and suggestions to safeguard China's financial security.