Study On China’s Short-term Capital Flow And Anti-Money Laundering Countermeasures Under RMB Internationalization

Since the reform and opening up, China’s economy has maintained growth rapidly. Nowadays, China has become the world’s second largest economy, and the country which attracts the most foreign direct investment in developing countries. However, with the rapid development of the economy, especially for the gradual opening up of banks and other financial industries, the size of illegal short-term capital flow (such as hot money inflow and capital flight) becomes larger and larger. With the progressive realization of capital projects freely convertible, the capital flow for the purpose of money laundering will certainly damage our country’s macroeconomic stability and financial security under RMB internationalization.In this paper, from the perspective of cross-border money laundering, first analyses the relationship of short-term capital flow, hot money inflow and capital flight, summarizes the channels of illegal short-term capital flow, and estimates its size; Secondly, discusses the definition, methods as well as the harm of cross-border money laundering; Thirdly, establishes a continuous dynamic constrained model, the model contains both general money laundering and cross-border money laundering and discusses the established anti-money laundering regulatory measures on the social money laundering capital stock; Further, establishes the multiple linear regression model with the dependent variable of illegal short-term capital flow’s size, researches the impact of different measures on cross-border money laundering, and to a certain extent tests and verifies the previous theoretical model. Finally, this paper puts forward feasible suggestions from the improving of anti-money laundering regulatory level, refinement of policies and measures to combat money-laundering and the training of anti-money laundering experts.