Arrangement Of The Order Of International Financial Liberalization In Economic Development

In 1970' s, the study by Shaw and Mckinnon, two famous American economists, showed the important function of the financial system in modern economy. They also pointed out that there are always financial repression in developing countries, which cuts off the source of economic growth and leads to heavy economic recession. They suggested that developing countries try to reform through financial liberalization to deepen their financial system. Thereafter, some Asia countries, such as Korea and Thailand, and some Latin-America countries like Chili and Argentina got success in financial liberalization reform with the guidance of their theory. At the end of 1980' s to the early years in 1990' s, however, almost all these counties were facing the heavy threaten of financial instability.Firstly, we retrospect the theory of Mckinnon' s financial liberation and the process of the perfect and development of the theory devoted by many economists. Many economists including Mckinnon himself draw the conclusion that the financial liberation in developing countries should be carried out on the base of its well fundamental marcoeconomy and in perfect order through the practice of these developing countries. Secondly, we try to find out the perfect order and measures of the financial liberation in our country through comparing the process, measures, manners and order of the financial liberation in some typical countries in Latin-America, East-Asia, transferring and developed countries.Finally, the article looks back the process of the financial reform in China, analyses the situation of nowadays' marcoeconomic and its microeconomic bases and discusses some important questions such as financial liberation, the opening of financial services, the opening of capital items and the choice of exchange rate in China. Through experimental study we try to give some theoretic referrences to financial reform in China.