China's Utilization Of Foreign Investment In Financial Risk Management Research

Financial Risk is the probability of the deviation of the financial act from its expected goal. As a special kind of economic risk, the nature of the financial risk will be unpredictability of the loss of the monetary fund. Mass volumed international capital inflow can bring a lot of financial risks, including: commercial banking system risk, security market risk, the impact of international capital inflow to the foreign currency rate, and turn of the international capital inflow----suddenly outflow. In the past two decades, utilization of foreign capital has played a major role in China's economic booming and market-oriented economic reform process. However, what is the important to us is, as the biggest developing country in the world, China has several similarities with other developing countries in the field of utilization of foreign capital, especially in its goal, funding form and, of course, the financial risk which capital inflow bringing into. Also, confronting the progress of the economic globalization, our national economy will be participate the international economical activity more and more often. By that time, the volume of foreign capital in China will be largened, the impact of foreign capital using also will be strengthened, and the financial risk will be activated too. Therefore it is the high time to study the financial risk of using foreign capital and offer some possible solutions. And that is the one reason why I choose this topic for my master's degree thesis.The thesis covers three chapters. The First Chapter studies foreign capital inflow bringing into the financial risk in the developing countries and looking into the reasons behind the problem.The Second Chapter addresses the potential financial risks in our country' s using foreign capital which may break the balance of the existing financial system, resulting ultimately in financial crisis.The Last Chapter try to design appropriate policy to dissolve the financial risks, with effective measures to check on and monitor short-term capital circulation, toaddress the potential risks related to the opening of capital accounts, and to correct the weak links in our management system for foreign debts.Main Features of the Thesis:1. Using a lot of charts and tables, which resourced from several famous institutions in China and abroad, to strengthen the authority of the thesis.2. Because of the volume of the thesis and the writing principle that "Just focus on the main topic", I had made a few eliminations for some side financial risks of using foreign capital and centralized my attention to the Liberalization of the Capital Account and its related financial risks.