An Analysis Of The Efficiency Of China 's Foreign And Foreign Currency Arrangement And Its Influencing Factors

Developing countries are always facing the problem of insufficient funds in the process of opening,common solution is the large scale introduction of foreign capital,China is no exception, the Inflowing scale of foreign capital has continued to expand under the impetus of a variety of preferential policies since the 1990s.In recent years,As China’s economic growth rate is slowing down and our foreign exchange reserves are sufficient surplus,our own capital has excess liquidity,however,the foreign investment activity with high cost is continuing,both the domestic and foreign funds are liquidity surplus.From the point of view of international experience,the last century,Southeast Asia had also appeared the foreign influx phenomenon in their process of opening,However, due to the government’s missteps on foreign management and the misallocation of funds.When the economy was in the form of reverse,a large number of foreign investors were fled,forming the capital empty window,triggering a nationwide financial crisis. Stones from other hills may serve to polish jade,so how to manage foreign funds in our opening process?are the captain configuration in our country coordinated?Whether our country will follow in the footsteps of Southeast Asian countries?On the basis of combing the literature at home and abroad,firstly,this paper studies the capital allocation status,through the comparisons of savings rate and investment rate、 the difference between deposits and loans in national and foreign currency、foreign exchange reserves and foreign debt, discoveries that the capital on the amount is misallocation,RMB deposits differences and foreign currency loans differences are existing simultaneously in financial institutions, foreign exchange reserves and foreign debt are rising at the same time,in addition, the RMB and foreign currency in management is still in their operations、independent regulatory status,which fully demonstrates the funding allocation efficiency of China’s RMB and foreign currency is low.Secondly,this paper analyzes the impact of the low funding allocation efficiency of China’s RMB and foreign currency,on the one hand,which will affect China’s macroeconomic performance,including increasing the pressure in domestic inflation and RMB appreciation、increasing the hedging costs of central bank、weakening the effectiveness of monetary policy、increasing the reversal risk;on the other hand,which will cause problems in the daily operations of financial institutions,including liquidation difficulty, asset impairment loss, flee risk and so on;moreover, which will also affect the currencies choice behavior of economic agents,leading to "currency substitution" risk.Therefore,in order to improve the funding allocation efficiency of China’s RMB and foreign currency,this article traced,theoretically analyzing the impact factors of the funding allocation efficiency,Under the premise of the principles of practicality and effectiveness,considering RMB deposits differences、foreign currency loans differences、foreign exchange reserves and foreign debt as representative indicators of the funding allocation efficiency,and adding cash in circulation foreign investment、domestic and foreign interest rate、foreign benchmark interest rate、the RMB exchange rate、total imports and exports、savings and loan balances in financial institutions as explanatory variables,building the simultaneous equation model creatively and using GMM moment estimation method to test the direction and extent of each factor,and further simulating and predicting the simultaneous equation model,to ensure the validity and applicability of the empirical results.Finally,based on theoretical analysis and empirical analysis,this paper put forward a series of policy recommendations,including weakening foreign policies、guiding the domestic money demand、adjusting the balance of payments、increasing the value of realized foreign exchange reserves、promoting RMB freely convertible steadily、improving coordination linkage of RMB and foreign currency、promoting the integration of RMB and foreign currency.Because existing researches focus on the configuration status of RMB and foreign currency and how to achieve integrated management of RMB and foreign currency,domestic scholars’ studies about the impact factors of RMB and foreign currency and its empirical analysis are still quite lacking, the thinking in the index selection, model construction, method selection and other aspects can learn little,so the empirical study about the funding allocation efficiency of China’s RMB and foreign currency is this paper’s key, difficulty and innovation,is also future research’s direction and priority.