A Study On The International Short-term Capital Flows And Its Influence On Monetary Policy Of China

Since the 1970's,the expansion scale of international capital flow has been largely exceedin g the growth scale and rate of the gross world product and those of international trade, with the e xpansion of the international short-term capital flows especially protruding, which greatly impact s not only the global economy, but also the economic and financial safety of China on its way of reform and open-up.This paper tries to deeply analyze features, flowing channels and flowing mechanism of the international short-term capital, finding a various effects of international short term capital flow on a countries'economy, with that on China's Monetary Policy independence the most critical. B y establishing a VAR model, this article analyzes econometrically the relationship between inter national short-term capital flow and China's monetary policy independence and find that the inte rnational short-term capital influx, especially that from abnormal channels in huge volume, does adversely affect the independence.At the end of the paper, some countermeasures are designed, such as stronger enforcing tax levy, tighter supervising investments in this field, closer cooperating with other countries'govern ments, etc.