The Research On The RMB Capital Account Full Convertibility

With the globalization of economy and finance, as a great power, China is inevitable to open its capital account if it wants to play a significant role in the world economy and new financial system . In the 11th Five-Year Plan period, Chinese government has clearly put forward that it will "make the Renminbi convertible gradually under the capital account". It is also, in the Fifth Plenary Session of the 16th CPC Central Committee, proposed to "make the renminbi convertible gradually under the capital account." This shows that achieving full convertibility of Renminbi under capital account is our government's firm objective. Therefore, in order to advance the innovation and development of our country's economy, the more important realistic study in China is how to maximize the use of two marks and two resources for domestic economic development and what approach to further push on the full convertibility of Renminbi capital account which base on the Chinese characteristic and actual state .This paper is written under such a background in order to study the sequence of China's capital account convertibility. The main points of the paper are as follows.First, using the method of analogy summarized, it analyzed and appraised the different point of view of the international and domestic economists about the capital account convertibility's definition, standards, approaches, the costs and benefits, and the relationship between macroeconomic balance and the capital account convertibilitySecond, using the method of process analysis, it searched the current status of the Renminbi convertibility under the capital account. Especially it inspected the course of the Renminbi convertibility, the status of current control and convertibility, the arrangements of convertibility's path and the positive impact and the negative effects on our economy for such a path under the capital account.Third, by comparing, it analyzed and reviewed three different kinds of path of capital account convertibility about Japan, Chile and Thailand, gained a useful inspiration from them.Finally,from the perspective of integrating theory with practice, in promoting the process of full convertibility of Renminbi under capital account, we should implement the path arrangements of "opening up the capital account balance," Focusing on how to achieve the "opening up the capital account balance," the paper designed the sequencing and strategy of the full convertibility of Renminbi under capital account. Using empirical analysis, the paper analysis the existing problems of excessive inflow of foreign capital and the capital disequilibrium brings by it, and its impact for macroeconomic, analysis the important reason of the problem which lies in the existing capital account convertibility's path arrangements of "encouraging foreign capital inflow and restricting national capital outflow ".To achieve capital flow from the "unbalance" to "balance", we need reform the existing path, implement the "opening capital account balance." This paper designed the "dynamic model of balanced funds," and corroborated this view.Results of this study show that: basing on part convertibility of the Renminbi under capital account, we should seize the opportunity of the current rapid economic growth, the favorable foreign currency liquidity to strengthen the study of bilateral open, maintain overall balance of the inflow and outflow of foreign funds, steadily boost Renminbi capital account towards full convertibility.