Analysis On Legal Issues Of Reform Of China's Foreign Exchange Management System

After deregulated its control on current account in the 1990s, China formally became member state of IMF Article 8. Whereas, foreign exchange control thereafter continues to play an important role in China's economic development. On 2007 IMF adopted a new resolution, proposing that the Members shall refrain from using exchange rate policies which may cause external imbalances and an important indicator to determine the external imbalance is whether current account or capital account stays on surplus or deficit state for a long time. Seen from the Balance of Payments Form of China, trade has been in China's favor for a long time. This surplus state is an inevitable outcome arisen in the process of China's foreign exchange management system reform.There is a lot of controversy in China and the international community as to China's foreign exchange reform, such as, Whether China should give up control of foreign exchange on capital account? Shall States'foreign exchange controls still exist in the financial context of increasing globalization? If yes, how much freedom may States own? How to coordinate the relationship between exchange control provisions and the IMF provisions? Will IMF provisions and the WTO requirement for Member States to exchange control regulations constitute international obligations? Is there any problem in the process of our country's foreign exchange reform? In the reform process, what steps should our country adopt? To find solutions for these problems is the main purpose of this essay.This essay tries to find solutions for China's foreign exchange management system reform by studying the evolving process of China's foreign exchange management legislative system, analyzing and summarizing the deficiencies of foreign exchange management legal system, such as legal issues of individual foreign exchange management system, deficiencies of foreign investment capital settlement system, and defects of existing exchange control regulations, as well as analyzing the foreign exchange management legal system in other countries such as Japan, Korea, Singapore and summing up their experience. Meanwhile, the author puts forward her own proposals for foreign exchange management legal system reform, such as principles of legislation related to foreign exchange controls, integrity mechanisms for exchange control legal system and improvement of regulatory mechanism.This essay consists of four chapters.Chapter I introduces the concepts and features of the foreign exchange, concept and role of foreign exchange management, and history of our country's foreign exchange management legislative system.Chapter II analyzes mainly legal issues of the foreign exchange management system, such as legal issues of personal foreign exchange management system, deficiencies of foreign investment capital settlement system, and defects of existing foreign exchange regulations.Chapter III mainly introduced the legal framework, legal changing process and experiences of foreign exchange management of other countries such as Japan, Korea, and Singapore.Chapter IV proposed legal suggestions for our country's foreign exchange reform based on studying of deficiencies of the legislative system of foreign exchange management and learning from experience of other countries, such as principles of legislation related to foreign exchange controls, integrity mechanisms for exchange control legal system and improvement of regulatory mechanism.Conclusion part of this paper summarizes the context of the thesis, and expressed the author's concern and desire to continue to absorb the views of community on China's foreign exchange management system reform and provide proposals for our country's foreign exchange management legal system in accordance with international status.