An Analysis Of Financial Factors Of Chinese Current Accout Balance Fluctuation

In the post-crisis era background, how to ease the current account imbalances brought about by economic problems risks are particularly important. First this article combed the domestic and foreign research status of China’s current account balance and the evolution of decision theory often project context, and then analyzes the volatility characteristics of China’s current account balance, then the decisive factor in the previous studies China often project, on the basis of theoretical and empirical, introduced a concept of financial factors, the fluctuations of China’s current account balance mechanism of the influence of financial factors are analyzed in theoretical deduction, and unstructured method is adopted to establish the Chinese current-account balance model, to empirically explore the degree of financial deepening, foreign direct investment, RMB effective exchange rate, domestic interest rates and financial asset prices from the five factors influence on China’s current account balance, we also use the1992-2012time series by step-wise regression analysis model for China’s current account balance model correction.In the process of demonstration analysis, this paper carried out in the granger causality test and cointegration test process, we found that the domestic interest rate and the current-account balance is no granger causality between, but the degree of financial deepening, foreign direct investment, RMB effective exchange rate, financial asset prices, and there exists a granger causality relationship between China’s current account balance, and the degree of financial deepening, foreign direct investment to GDP ratio, the effective exchange rate, financial asset prices and China’s current account balance to GDP ratio there is a cointegration relationship between the five variables. We also use the vector error correction model static projections for China’s current account balance, and use the variance decomposition to quantitatively measure the importance of the financial factors. Results indicate that the degree of financial deepening, the foreign direct investment and financial asset prices on China’s current account balance has significant negative impact, at the same time, the effective exchange rate on China’s current account balance has significant positive effect, while domestic interest rates impact on China’s current account balance in statistical significance can be ignored. RMB effective exchange rate both in short and long term on China’s current account balance is the most important variables; Financial deepening degree is decided to China’s current account balance in the short term fluctuations important factor, but in the long run it on the fluctuation of China’s current account balance is limited; Prices of financial assets is determined in the long term China’s current-account balance fluctuation important factor, but in the short term its limited on the fluctuation of China’s current account balance.