Analysis Of Benefits And Risks On Capital Account Opening And Choice Of Policy In China

An open capital account is the need of market economy development and globalization; it's also the important content of economy liberalization. By the midterm of 1990's, the developed countries had cancelled most of the capital controls and opened the capital account. Under the trend of liberalization, many developing countries also have opened the capital the capital account. As the biggest developing countries country, China has adopted the gradual pattern reformation and the policy of opening. During the 20 years of the last century, China has sustained a higher growth, a higher opening level and made a decision to open capital account.The opening of capital account has greatly enhanced the intensity and profundity of the capital inflow and capital outflow from China. The large capital flows bring to China the new chance of economy development as well as many risks and unsteady. The paper explores benefits and risks associated with an open capital account in China. These risks and benefits are relative nor absolute, potential nor actual. How to make the potential profits comes to true and how to reduce the possibility of the potential risks occurring, or, how to deal with risks as they are appear. Therefore, some stratagems and counter measures that how to reduce risks of capital account opening are brought up in this paper.The paper is divided into five chapters.The first chapter: analysis of the basic theory of an open capital account-from capital control to the opening of capital account. First of all, I explain the meaning of an open capital account and it makes the goal clear and limits the range of further research. Subsequent research makes an analysis on why there are so many countries purse the open capital account and how it forms.The second chapter: China capital account opening's history and actuality. This chapter introduces the process of China capital account opening and describes the actuality and the next step of China capital account.The third chapter: analysis of benefits on China capital account opening. This chapter explores benefits that China can acquire during the opening of capital account from six aspects.The fourth chapter: analysis of risks on China capital account opening. This chapter explores risks that China may face during the opening of capital account from four aspects.The fifth chapter: choice of policy towards the opening of capital account and the counter measures of minimizing the risk. This chapter puts forward the principle China should insist, the step China should obey and counter measures of minimizing risks.The sequence of this paper is the general first singularity second. This paper consider capital account opening from the angle of finance liberalization. This paper intend to research the profound influence including profits and risks on China's economy due to the opening of capital account on the benefits of China, established in the realistic state of China.This paper also gives further consideration to: (1) to put forward that opening capital account brings active effects on our country's "go-out" stratagem and reduces the pressure of RME appreciation. (2) to emphasize on the sustainable of opening capital account and insist that China capital account opening is the sustainable opening and object the opening in order to open.