Study The Control Of Capital Flows, Through The Analysis Of Net Errors And Omissions

The net errors and omissions item reflects not only the quality of balance of payments of one country, but also the amount of capital flow unrecorded officially to a certain degree.The net errors and omissions item in China's balance of payments statement is in an abnormal state all along and has turned into high plus from minus in recent years, so it is necessary to research in this field. Firstly, the paper analyzes the status of China's net errors and omissions item over the calendar year and proves its exceptional trend after comparing with that of some major countries' in the world. Secondly, the paper analyzes the influences of statistical error, capital flight and hot money inflow on net errors and omissions and finds out their interrelations. Then the paper points out the main approach of international capitals' flowing into or out from China by analyzing money laundering, balance of payments statement and frontier trade in detail. Finally, from the three aspects of macroeconomic control, concrete mechanism construction and money laundering, the paper brings forward several policy proposals about how to control the flow of international capital, especially international short-term capital, and about how to reduce deviation of net errors and omissions according to the above analysis.