Capital Flight In China-Scenario, Reasons And Countermeasures

The following article will discuss 'capital flight' problem in three aspects: One isthe scenario of China's capital flight during the period from 1988 to 2005. Thisscenario contains the state and channels of capital flight, especially focusing on newchanges and trends;The second aspect are the reasons why capital flight occurs inChina. This article combines theory and practical analysis by applying western theoryabout international flow to China's reality;The third aspect are countermeasuresagainst capital flight.The research results demonstrate that the amount of capital flight in china reacheda record high in 1998. Then the amount declined in 2001 and meanwhile 'net capitalinflow' appeared. But in subsequent years, the amount again went up. Therefore thecapital flight problem can by no means be overlooked. The reasons are mainly relatedto policy, system and macroeconomic environment. Therefore, the article suggeststhat government make policy and system perfect and reasonable;creat soundinvestment environment. Meanwhile, carry out anti-moneywashing campaignactively.