Empirical Analysis On Influencing Elements Of Chinese Short-term Capital Inflow

As the development of globalization and the in-depth financial integration, the influence of international capital flow to economy of a country has outperformed the influence of international trade. With high liquidity and high profit-driven attributes, short-term international capital is becoming more and more influential in the development and safety of national economy. Based on recalling the classical literature home and abroad, this dissertation focuses on status quo, path to flow and influential elements of short-term capital inflow. By researching on the statistics from 1996 to 2006 empirically, this dissertation finds out the factual elements which influence short-term capital inflow. The empirical results say: the direction of short-term capital flow in china changes very quickly with large outflows and inflows, at the same time, the path to flow in has been diversified. Interest spreads, the price of real estate, rates of change in exchange rate, yield on security market and debt rate have played in the main elements which influence short-term capital inflow. At last, from the perspective of influential elements, this dissertation propose that interest rate should be market oriented and we should monitor capital and real estate markets closely and increase exchange rate flexibility. This dissertation has measured the scale and influential elements from a comprehensive way.