Japan's Offshore Financial Market Development Experience And Its Enlightenment To China

This essay firstly describes the operation standard requirements and specific operation methods in the process of development of Japan’s offshore financial market from qualitative point of view. We find that Japan’s offshore financial market was not truly inside and outside separated, Japanese banks played a game named "refinancing" which transferred the offshore money to the onshore market. Japan’s offshore financial market was not the main factor which led to Japan’s economic bubble, moreover, Japan’s bubble was mainly caused by wrong macro policies and financial reforms.Besides, from quantitative point of view this essay then analyses the factors which affect the scale of the Japanese offshore financial market. The result shows that the interest rate spread of offshore and onshore financial market has a positive and significant influence on the scale of Japan offshore financial market. Otherwise, GDP per capital、the sum of input and output(scaled by GDP)、the loan amount to the private sector given by the financial institutions(scaled by GDP) and the Japanese government level of management all have a significantly positive influence on the scale of Japanese offshore financial market. However, the market value of stock market(scaled by GDP) has a significantly negative influence on the scale of Japanese offshore financial market.The Chinese government can learn a lot from the experiences from Japan’s offshore financial market. That is, first and foremost, Chinese government needs to improve domestic macroeconomic situation, and insist in the opening policy. Secondly, Chinese government should effectively monitor the offshore market to prevent the mismatch between offshore asset and liability. Thirdly, Chinese government should promote financial institutions to support the private sectors in a large scale. Last but not the least, Chinese government should enhance the government level of management.