To Study The Hedge Fund's Influence On Chinese Financial Market And How To Cope With It

With the integration of the world economy and the globalization of international finance, a lot of derivatives are invented, controlled capital is loosened step by step and the system of international credit is founded. Under this international economic and financial background, hedge fund has been developed greatly. She exerts a strong influence on every financial market in the world, furthermore Macro Hedge Funds have surpassed the confine of sovereignty and law. They are wandering in the international financial markets and looking for the opportunity of speculation. They make full use of financial leverage and selling short to increase the force of speculation and attack.Now we still remember the Currency Crisis of Southeast Asia in 1997 as it happened yesterday. It disserved so greatly and influenced so deeply. It was nothing less than any economic crisis in the history. At that time, China succeeded in escaping not because we have abundant foreign exchange reserve and well-liking economy, but because we were putting the system of strict controlled capital into practice at that time. Thus, hedge fund had no chance to attack. But we must open our Capital Account and perform our commissions when we joined the WTO. So RMB is exposed in the attack of hedge fund. With the recovery and development of Asian economy, and with the Asia reappearing economic miracle, hedge must come back to Asia. China is the most important engine of Asian Economy, so RMB is the potential target of hedge fund. Thus we must discuss how to deal with the crisis during our opening the market, especially to prevent the potential currency crisis or financial crisis by speculation and attack of hedge fund. So it is very important and necessary to research the strategies of speculation, the techniques of attack and the possible attack to RMB fully and objectively.This thesis reviews the several currency crisises on account of the speculation and attack of hedge fund, introduces the definition, characters, sorts, functions, development and evolvement. I define the hedge fund on the basis of research, analyze the hedge fund's strategies of speculation and techniques of attack, discuss the edge tools of hedge fund in detail, such as financial leverage and selling short. I make use of this argument to explain why hedge fund has so enormous power of speculation and attack, analyze the true reasons of the Currency Crisis of Southeast Asia and the enormous harm of hedge fund. I think the true reason of the Currency Crisis is the combination of hedge fund's speculation and attack and the attacked country's bubble economy.This thesis discus the hedge fund's potential influence on Chinese financial market detailedly, the tools of speculation that they can make use of and the channels they enter our financial market. I check whether RMB is in crisis and put forward the hedge fund's imaginary attack to RMB. At last, I put forward the measures that our government can make use of to escape the speculation and attack.