The International Capital Flows Based On Internet

By the end of 2008, the amount of China's foreign exchange reserve has reached 1.95 trillion U.S. dollars. It is generally held by the scholars that there have been plenty of inflows of hot money in China. According to the traditional view, hot money can flow in the name of capital account, through trade account, individual account, enterprises' non-trade income and secret private banks. However, based on the follow-up studies of electronic payment and network receipt, the author found out that international capital can easily avoid foreign exchange control and therefore can freely flow in and out by the means of paying on the network. This thesis is composed of the following parts:First of all, it expatiated on the classical theories on international capital flows. And the author also has made concise analysis and comment on these theories.Secondly, the author made a brief conclusion of the traditional channels of international capital flows as well as a summary of contemporary achievements of THE STUDY OF INTERNATIONAL CAPITAL FLOWS BASED ON INTERNET. And on the basis of empirical analysis of the mechanism of international capital flows through internet, the author also has elaborated on how international capital flows into China through internet, like 3D channel and non-3D channel of credit cards, transfer accounts through electronic money and network banks and the exchange websites of electronic money.Thirdly, the author has calculated that there was $899 billion hot money flowing into China from 2003 to the 3rd season of 2008, by adopting the formula "Increment of foreign exchange reserves - Trade surplus - FDI + Fake Trade surplus" . Then the author has estimated that the amount of international capital flew into China through internet is over 100 billion U.S. dollars.In the end, the author has found out that there are regulatory gaps of China on international capital flows on the internet. Also, a great deal of international capital can avoid foreign exchange control and flow into China freely, which threatens the macro-economy.