Study On The Channels Of Hot Money Inflow In China

Since 2002, economic and financial globalization has raised a higher wave than in the 1990s, and the amount of global arbitrage funds has increased rapidly. Breadth and depth of economic market reform of China's financial market, and which conforms to the globalization keep on expanding. In the meantime, China's economy has entered a period of rapid growth, under the stimulations of growth bonus from some factors including WTO accession. Even in the face of the global financial crisis of century, China economy growth still is success in achieving "eight percent" in 2009. Brilliant performance of economy causes the strong expectation of RMB appreciation from the external world. Since 2002, US dollar keep falling as a major international currency, which brings great pressures for the appreciation of Asian currency especially RMB that peg to the dollar or in which currencies basket has too many dollar. These factors intertwine and cause the trend of "global capital running towards the east Asia". In this context, "hot money" flow is unavoidable. However, hot money flows in our country, on the one hand, can obtain higher profits from RMB appreciation, on the other hand from investing in capital market, which brings bigger impact for China's economic development and the central bank monetary policy. "Hot money" is undoubtedly one of the most controversial financial vocabulary in China, which claim is multifarious. So now the related problems is:First, its concept must be known no matter in which view hot money is explained. The second chapter describes definition on "hot money" our academia and international in this paper. Second, to analysis and state hot money problems, the scale of hot money flow in China must be understand about, for estimating the impact and various effects on the economy, accomplish knowing fairly well. Third, it is the key problem to make out the flow channels of "hot money", it is convenient for regulators to control "hot money" inflow effectively to solve this problem. Fourth, in view of the above problem, which the regulatory system is perfect and effect of implementation is ideal or not should be considered. And modify and improve the insufficient place that is found out.Around the above content, this paper divides into four parts. The first section is definition and demarcation about hot money. It is necessary to formulate the extent and concept of the research object before the related study is carried out. This text classifies and concludes the related theory of current world about hot money, and comprehensively elaborated hot money. The second section estimates the scale of hot money flowing into China. This paper estimates and measures the overall scale of hot money inflow our country by various methods basing on kinds of theory about research on hot money scale. The third section, which embraces certain significance theoretically in my opinion, analysis the inflowing ways of hot money. In the first place, the section describes in detail the ways how hot money flow into China, and made an elaborated summary of the ways that hot money is flowed, by analysising the regular items, the capital account, the personal account and loan shark. The study is in a relatively highlighted position in the same field domestically. In the next place, some of practical meanings are also embodied in the section. Sorting out the possible accesses of hot money inflowing, this provides reasonable and powerful evidence to policy making in order to make the oriented supervision. The forth section studies the supervision and control of hot money inflowing. First of all, based on the previous sections regarding to the conclusion of hot money inflowing channels, taking into the consideration of our domestic supervision level, the forth section finds the problems on current policy making and execution process. By this way, furthermore, it attempts to explore some hot money regulation mechanisms and policy proposals that could be fit for our country.