An Analysis And Empirical Studay On Influential Factors Of China's International Capital Flows

The policy of reform and opening up has been carried on over 30 years, and China's openness is continuously increasing. The scale of China's international capital flows become more huge, making up the capital shortage of China and playing a very important role in Chinese economic development. But in the promotion of economic development, large-scale international capital flows will threat China's financial stability. In particular, dramatic changes in short-term speculative capital even lead to financial crisis, seriously harming Chinese and world economic development. For example, Asian financial crisis was caused by international speculative capital. After Asian financial crisis, Chinese scholars have been aware of the dangers of international capital drastic change and have done a number of related researches, especially about the influential factors of the international capital flows.This paper makes a research on the situation of China's international capital flows during 1992 and 2009. It describes history and patterns of the international capital flows and makes a detail analysis on the measurement and changes of China's international capital flows. Factors that may affect China's international capital flows are chosen to assist the analysis. Measurement software is applied in doing OLS regression research and analyzing the results. The research results concluded that the growth of GDP, China's accession to WTO, RMB exchange rate and Openness have significant impacts on China's international capital flows. Stock market returns makes a little effect. The impact of interest rates and price levels is not significant. Chapter five argues that to strengthen the management of international capital flows, China should pay attention to the improvement of the economic and social environment, the mutual development of foreign and domestic capital, further deepening of the reformation of RMB exchange rate system, the strengthening of the supervision of other capital flows, the improvement of the monitoring system of international capital flows, as well as the strengthening of international regulatory cooperation.