Study On Capital Control In China

In 1996 China accepted No.8 item of IMF, then realized RMB free exchange in current account. At the same time, China controlled capital account strictly, which help China go through Southeast Asian financial crises. Therefore many specialists are engaged in studying the opening of capital account and capital control. Most of studies are concerned about the economic problems after the opening of capital account while only few studies are concerned about the management of current capital account. From studying the current conditions in capital control in China, this paper analyzes the reasons for capital control and moderation on capital control in theory, and establishes measurable index system of the extent of capital control in China and measurable criteria on effectiveness of capital control, and evaluates effectiveness of capital control in China in empirical. The study object in this paper is capital control, which does not mean encouraging capital control but looking for appropriate capital control extent suited for China economic situation. The ultimate objective of this paper is to enhance the effectiveness of capital control and prepare for the opening of capital account.