The Scale Measurement And Influencing Factors Of China's International Short-term Capital Flows

With the development of economic globalization and financial liberalization, the international short-term capital achieves a large-scale cross-border flows. Because the international short-term capital is speculative, it can easily reverse its flow direction. It will make a tremendous impact on a country's economic development. Since the implementation of the RMB exchange rate reform in 2005, openness of capital account has been rising, which provides a more convenient condition for international short-term capital flows. In recent years, China's economic development situation is facing the constantly changing, such as economic slowdown, exchange rate fluctuations and so on,which will affect the direction of international short-term capital flows. Due to China's financial supervision mechanism is not perfect, large-scale international short-term capital flows will effect China's financial system, even the whole macroeconomics. As a result, it is essential to clarify the mechanism of international short-term capital flows.Based on the study of domestic and foreign scholars, this paper further clarify the concepts of international short-term capital flows and describe its flow channels in China.Then use four methods comprehensively and systematically to measure the international short-term capital flows' quarter scale in China from 2005--2014. It's more time-valuable.The research finds that the fluctuation of short-term international capital flows intensifies after the financial crisis. Since 2012, the trend of two-way flows of short-term international capital continues to expand.Combined with China's actual conditions, this paper establishes a VAR model regarding the US interest rate, the RMB exchange rate expectations, capital market yields,inflation, the level of economic development and the real estate market yields as factors.Use impulse response analysis and variance decomposition to find the main factors causing Chinese international short-term capital flows. The study finds that the RMB exchange rate expectations, real estate and capital market yields are the main factors leading to international short-term capital flows. Followed by further analysis of the impact of international short-term capital flows on monetary policy, financial system and real estate market. Finally we think that we should strengthen the supervision of international short-term capital flows, increase the flexibility of monetary policy,constantly improve the regulation of capital markets and the real estate market, raise the ability to cope with risk, in order to make the international short-term capital serve for China's economic development.