Study On Further Pushing Rmb Convertible Under The Capital Accounts

With in-depth development of economic globalizationand financial liberalization, global capital flows has beenone of the most concerned issues in economics. The globalfinancial crisis stemming from the U.S. sub-prime mortgagecrisis has thrown extreme strick on the regional and globaleconomy, and its further impact, for example, the excessliquidity treating the emerging economies cannot beunderestimated. Facing the special complicatedinternational economic environment, China should be morecautious when opening the RMB capital account, inconsideration of the probable impact on its financialstability the global capital brings.Based on the latest international economic andfinancial situation and guided by international economicstheories and the following research train of thoughts:introducing relative theories, analyzing the currentsituation of RMB capital account, referring relativeinternational experiences, and putting forward policysuggestions lastly, this paper summarizes the availableinternational experiences of Japan and Korea, and providea reference for the government to make the RMB convertibleon capital account under the premise of national economicsafety, stability and development.The paper first makes a brief introduction of the theoryrelated to capital account liberalization, including the connotations, conditions and paths. Followed by theanalysis of current situation of the RMB convertibility oncapital account, and the brief review of the methods andpolicies our government made to push the opening of capitalaccount, this paper introduces the characteristics of thedirect investment, portfolio investment and other ones, andpoints out that there are still some problems regardlessof the achievements we have made. For example, the abnormalstructure of low-yielding assets and high-risk liabilities,the phenomenon of capital flight and hot money flows, theoutdated approach of regulation. Next, the paper summarizesthe referencing international experience in retrospect ofthe capital account opening processes of typical East Asiancountries, to provide some beneficial references to thepath-choosing, arrangement of the capital accountliberalization order and improvement of supporting methods.Afterwards, this paper introduces the supporting methodswe should improve in consideration of their currentsituation and the risks the convertibility on capitalaccount might bring, and put forward the policy suggestionsat last, which include pushing the process in order, usingprice variables to make indirect adjustments, improving thesystem of financial supervision and developing diversifiedfinancial system.