Research On The Endogenetic Factors Of China's Currency Crisis

More than 100 currency crises have taken place in the world since 1970s, in which around three quarters are in the emerging market countries. The frequency, paroxysmal character, contamination and enormous destruction of currency crises have severe impact not only on the occurring countries, but also the international finance stability. Research theory on currency crises became pioneer field in international economics and finance, updating and developingThis paper mainly researches on the origin and impact of currency crisis, the endogenetic factors of and prevention of currency crisis in China. It has been proven in theory and reality that the characteristics of intermediate exchange rate regimes are lower policy transparency, lower extent of promise credibility and worse implicit insurance, which give rise to currency crises more compared to two-poles-regimes. The currency crises in emerging market countries often arise from banking industry. The fetch-up and reversion of excess inflow of international capital result in crisis in capital account. The multi-task of foreign exchange reserve not only accomplishes nothing, but also increases the means of speculation indirectly. The interior defection of international monetary system is one of the roots of monetary crisis, at the same time, the frequent burst out of monetary crises promote the evolvement of international monetary system. The burst out of currency crises will imperil the political stability, real economy and finance deeply. Inevitably a series of financial risks come into being in the process of economic reforms of China, such as the technical bankruptcy of the state-owned banks because of historical and systemic reasons, the interior defection of existing exchange rate regime results in the absence of public credibility of the promise of maintaining RMB's stability, the scale and term structure of international capital flow not only deteriorate the efficiency of domestic investment, but further put us in the risk of international finance turbulence, and the lack of independence of the central bank make it be compelled to accept the conflicted multi-task, with no capability to safeguard exterior balance. Therefore, there is possibility of suffering currency crisis in China without cautious prevention. We suggest that China construct the prevention system correspondingly as follows:...