Empirical Analysis Of Impact Factors Of International Short-term Capital In China

With trade liberalization, the movement of capital exceeds national boundaries and flows on a global scale. The development of electronic networks further accelerates the speed of capital flow and widens the scope of capital flow. Especially the rapidly flowing of international short-term capital around the world reduces the financing cost in different countries, accelerates financing speed and promotes the development of world economy. At the same time, the international short-term capital plays "chasing ups and selling downs" role in the economic development process around the world due to the property of for profit and avoid risk, which seriously affects the steady development of economy.The international short-term capital inflow in China expands very quickly along with the rapidly advancing of opening up and high speed growth of Chinese economy after China attending WTO, especially in recent years. Thus, this paper discusses and researches international short-term capital flow in China, which has important realistic significance to take targeted measures and effectively against adverse impact of short-term international capital flows in China.This article emphatically analyzes and studies China's international short-term capital from the three aspects. The main contents are summarized as follows:Firstly, the author collects the monthly data of increasing in foreign reserves, FDI and trade surplus from Jan.2006 to Sept.2008 and measures the stock and flow of international short-term capital. The results show that international short-term capital swarms into and strands in China. Suppose January 2006 as base period (assuming in January 2006without any capital stranded in China, namely the deposit of China international short-term capital is zero), international short-term capital stock in China has reached 23742.2 thousand billion dollar by the end of September 2008. Next, this thesis analyzes the interaction between China's international short-term capital flow and its influencing factors using cross-correlogram after measuring the flow and stock of international short term capital flow in China, and establishes the multivariate linear regression models of China international short-term capital flow and its influence factors. Simultaneously, an empirical analysis of the relationship between China international short-term capital and its influence factors was carried out by using multiple linear regression models.Finally, the RMB appreciates pressure increases with the influx of international short-term capital, which not only promotes the rise ceaselessly, but also brings many influences to our country's economic health. The international short-term capital would profit enough from RMB appreciation and leave China as RMB appreciating to a certain level, which may great impact China's economic and financial system. Therefore, this thesis constructs game model of withdrawing international short-term capital from China and RMB appreciation based on the analysis of the influence of RMB appreciation on our country, calculates the mixed strategy equilibrium between the international short-term capital leaving China and RMB appreciation, analyzes the relationship among the probability of international short-term capital exodus from China, the probability of RMB appreciation and the variables, then puts forward corresponding suggestions for Chinese government to prevent the international short-term capital withdrawal.