The Underground Money Shops In Shenyang Xita Develop Situation And The People's Bank Of China Shenyang Branch Answer Schemes Studying

Underground Money Shops (UMS) are expending illegally and obviously in China, which is troubling China's authority. Actually, it's a dilemma that tolerates UMS or not, because of their more or less reasonability in the circumstance of China's imperfect financial markets and capital account control so far.This thesis is a case study on those UMS operating illegal foreign exchange transaction and money transfer internationally in Xita District of Shenyang city. By disclosing how these UMS run, why they exist and how they affect local economic and financial order, we conclude that (1) it is the comparative advantage of UMS over legal banking to make UMS'existence reasonable and inevitable now and in long term, and (2) tight and tough restriction is neither the only nor the best way to eliminate UMS before China open completely its capital account, deregulate its foreign exchange and RMB become a free convertible currency. Finally, we figure out the practicable policy framework on UMS regulation.Methodologically, some proper analysis tools are used in this thesis, such as econometrics model, comparative research, SWOT matrix model, theory of game and theory of"Broken Window", which are helpful to keep the research comprehensive and thorough.The contribution of this thesis is we explore a new micro view angle to research UMS based on a case study, which is the first try in China. Additionally, it is the first research in detail on illegal circulation of Korea Dollar in China after it has been adopted into money baskets when measuring RMB's foreign value.