An Analysis Of Long-term Determinants Of The Current Account In China

The exterior equilibrium of a country's economy was defined again since the early 1980s, that is, emphasizing the balance of current account. It could simply be defined as rational current account surplus accommodated with a country's macroeconomic conditions. The balance of current account disequilibrium is the head aspect of the world economy problem, and is also the main factor of instability of global economy.Since the marketization and opening degree of Chinese domestic economy enhance, the Chinese foreign exchange control is relaxed and the process of Renminbi transaction exchangeable under capital and financial account is gradually advanced, the uncertainty of Chinese current account is growing. This kind of uncertainty makes the controllability of Chinese economy to external equilibration weaker. In this sense, analyzing and researching China current account's determinations thoroughly, is not only very important to guard and analyze macroscopic financial risk, but also can provide the model and basis for the international payment balance policy formulation simultaneously.On the basis of the theoretical analysis combined with empirical analysis, qualitative analysis combined with quantitative analysis and vertical analysis combined with horizontal comparison to the determination of current account, as well as on the basis of the theoretical analysis and empirical analysis to the determination of current account, this dissertation uses econometrics and the international economics principle to analyze and research the long-term determination of Chinese current account in 1986 -2005, discusses the co-integration relationship between the Chinese current account and the net foreign assets, trade degree of openness, the financial deepening degree, the relative income, and estimates the Chinese current account long-term determination and puts forward some suggestions on the Chinese current account management.