The Influence Of International Capital Flow To The Chinese Economy

The most important characteristic of the world's economic development during the 20th century is the massive inflow of international capital to the emerging economies. Because several developed countries, such as the US, initiated financial liberalization policy, the international capital flow in emerging market grew dramatically and became faster and faster. This had a profound influence on the emerging economies. This article introduces theoretical research on international capital flows in different period, and analyzes the status and characteristics of capital flows in China since the 1990s. It also analyzes the positive role that international capital flows play in promoting China's economy. However, there are also some risks. For example, the incremental debt in China grew too fast and problem emerged in the foreign debt structure; capital flow was disequilibria in industrial and regional development; underlying finance crisis came out and so on. It is suggested that China should deepen financial development in order to enhance her international competitive strength and efficiency of using capital; adjust the economy structure, improve capital market and the supervision of international capital flow in order to reduce risk.