Research On Issues Related To The Capital Account Liberalization

With in-depth development of economic globalization, worldwide capital flows more frequently and it had become one of the most widely discussed topics for economists and the international community. In the face of the current international situation, we should count on the risk we are taking and promoting the capital account liberalization more cautiously according to national conditions. While enjoying the various benefits of international capital flows, the impact of capital flows on economic and financial stability needed to be minimized.The paper is based on the latest international economic and financial situation and is guided by international economics and international finance theories. The paper was discussed in the method of comparative analysis and a combination of theoretical analysis and practical research, mainly dealing with effective measures and reasonable arrangements to liberalize China’s capital account. The paper briefly introduced the theories relating to the promoting of the capital account liberalization, analyzed the conditions we require for the liberalization of the capital account and the risk we take as the basis of discussion below. To provide a more reasonable path to promote China’s capital account liberalization, the paper take the liberalization progress of Japan as a typical reference. Then we had a brief review of the politics we took to promote the liberalization of the capital account since we liberalize the current account in 1996. The paper analyzed the current situation of China’s economic fundamentals to figure out what we can get from the liberalization and the risk we face. At last the paper makes a clear judgment on basis of the current academic point of view according to China’s current situation. The paper made a clear judgment that we should promote the liberalization of capital account coordinate with the financial reform orderly. And the paper emphasizes it’s important to take the risk of “trilemma”, the risk of macroeconomic and financial system instability under control. China is in the period of strategic opportunities, and it’s important that we take a gradual opening-up approach and make a efficient plan for the progress.