Study On The International Capital Flow Vulnerability And The Risk Precaution

Along with the unceasing deepening of the economy globalization, as the important symbol of globalization, international capital flow is developing swiftly and violently, and is influencing the world economy more and more deeply. Because the various countries further the process of the currency convertibility, interstate capital flow becomes more frequently. The scale of it is bigger and bigger, and the complex degree further enhanced. While large-scale capital flow meets the investment need, it also causes the interior vulnerability of macroscopic economic and the financial system becomes prominently. The international capital centralized inflow causes a country credit to expand, brings pressure to currency appreciation, and accelerates the formation of economical foam. The centralized outflow will create the domestic currency to depreciate, lead to the initiation of debt and currency crisis, and intensify the economy depression. Recently, the United Nations sent out the currency crisis warning to four Asian countries, which had suffered the financial crisis in 1997-1998. To China, which is in the market economy transition period, large-scale capital flow extremely easily has the impact on economy. Under certain conditions it also has the possibility to trigger currency finance crisis. Therefore, it is necessary to strengthen the analysis and the research on capital flow and its vulnerability, establish the early warning system of capital flow vulnerability, and defend the economy and finance security.This article has combed the related domestic and foreign literature on international capital flow and its vulnerability research, and introduced the concept and elementary theories of international capital flow and its vulnerability; By the economic and international finance theory, it analyzed the characteristic and tendency of international capital flow mechanism. About the study on concrete manifestation and root proof of capital flow vulnerability in China, this article changes the former methodology research, and selects three sensitive angle to study capital flow vulnerability: international balance of payment, FDI and external debt. On the basis of previous year's data, the opening degree of China capital account and the pressure of RMB appreciation or depreciation, it inspects China capital control efficiency then capital flow vulnerability through the international balance of payment. Through the angle of FDI and external debt it discussed the root of capital flow vulnerability. The conclusion is as follows: From the macroscopic economic view, China's economical development degree is relatively low. Its financial deepening degree is limited, and the anti- risk ability is weak. The open macroeconomic system needs consummation. From microscopic economic view, the management of its financial department is poor. The investing and financing system needs to be modified and the factor market is imperfect. At the same time, this article has compared and analyzed the supervising and managing of capital flow in the main developed countries with in developing countries. On this bases, it referred the advanced international capital flow management experience and combined the foreign exchange management working practice. Then it proposed capital flow vulnerability risk precaution measures as follows: Construction of scientific and effective capital flow vulnerability analysis and the early warning system; Transforming of the method of foreign exchange management; Continuing to consummate the formulation mechanism of the RMB exchange rate; Impelling the interest rate market reform; Moderating foreign exchange reserves; Steadily advancing the convertibility of the RMB and strengthening the international cooperation.