A Study On The New Ways Of Capital Fight In China And Its Countermesure

The article probes into the problem of capital flight in China, which has been rather serious and complex since the 1990s. When coming into the new century, the state of capital flight is still severe, while balance of payments in China keeps net capital inflow.Although much academic work has been done in this area of capital flight, most of them focus mainly on that before the 1990s. However, in the recent years, there comes out new characters, new trends and new patterns of China's capital flight. Especially, since 2002, foreign "hot money" aiming at speculation swarmed into our country, which causes the phantasm that capital flight declines obviously, with the still serious situation of capital flight covered. Therefore, it's very meaningful to study in deep on the current capital flight situation in china.The main purpose of the article is, on the one hand, to rectify the misunderstanding among academic circle of the current situation of China's capital flight; and, on the other hand, to expatiate the new problems and put forward pertinent measures.The article is composed of the following six parts: 1 the definition of capital flight and its main characters in China recently; 2 re-evaluation of the scale of capital flight in China(1990-2002) and its effect on macro-economy; 3 cross-border money washing and capital flight; 4 RMB circulation abroad and capital flight; 5 investment abroad and capital flight; 6 analysis of economic factors and pertinent measures for capital flight problem in China.The article draws the following conclusions: Capital flight in China at present still possesses a great scale. For example, capital flight in 2000 reaches a record 82.2 billion dollars and still 60.8 billion in 2002. Thegreat capital flight has caused terribly adverse negative effect on China's economy. Money washing, investment abroad and direct RMB flight is the three new ways of capital flight in China at present. The two main factors attributing to China's capital flight are various preferential policies in foreign capital and demand exceeds supply of foreign exchange caused by long-term foreign exchange control. In the short term, strengthening financial regulation can restrain capital flight effectively. In the long term, we should administer capital flight in two ways: one is to reform foreign exchange management system and loosen foreign exchange control the other is to reduce the discriminating practices between foreign capital and native gradually and execute genuine "national treatment".The main innovative points in this dissertation are: The definition of both the broad-sense and the narrow-sense concepts for capital fight; The re-evaluation of the scale of capital flight of China using scientific rational means; analyzing thoroughly the new patterns of current capital flight from three aspects: cross-border money washing, RMB flight and investment abroad; analyzing the main influencing factors through econometrical model and putting forward reasonable countermeasures.