Research On Scale And Influencing Factors Of Short-Term Capital Outflows

Since the second quarter of 2014,China experienced a large-scale capital outflow,current account and capital account have no longer been both surplus,capital account became deficit suddenly.Compare with 2007 subprime crisis and 2010 European sovereign debt crisis,the reason for the outflow more complex this time:Judging from abroad,US economy is undergoing recovery and the Fred is expected to raise interest rates;Judging from inside,China's economic growth slowing down and market appears expected depreciation of RMB,internal and external factors together led this capital outflows longer and larger scale,and foreign exchange reserve appears substantial decline for the first time.This phenomenon has been widespread concern.It can be expected that the short-term capital flows may become frequent fluctuations in the next period of time.Therefore,the study of motivation,channels and the scale of current short-term capital is significant.On the one hand,it can help us to clarify the reasons for the recent capital outflows;on the other hand,it also makes out appropriate solutions according to the actual situation.This paper analysis the reason of the outflows from balance of international payments;banks valet foreign payment and receipt and banks foreign exchange settlement and sale,inferred that the difference between China and the US,devaluation expected,economic growth and our capital account liberalization are the main reason of the outflows.After investigation of the current major capital illegal migration channels,this paper innovative adjusting false trade,error and omission account and underground banks,in order to obtain more accurate scale of short-term capital.In the empirical research part,this paper adopted VAR model,through ADF test,Johansen cointegration test,Granger causality test,has confirmed,the interest rate difference,exchange rate expectation,China's economic growth rate and new commodity housing price play an important role on short-term capital flow.Through VAR pulse response method we can find out once these factors change how much can they influence the capital flow.Finally,following detailed suggestions are put forward according to the analysis above:first,set up Macro-prudential supervision and frameworks base on the actual situation as soon as possible;second,strengthen the information system,in order to grasp the capital flow data timely and effectively;third,take appropriate monetary policy and fiscal policy to keep the economic growth in an acceptable area;fourth,central bank should allow RMB exchange rate decided more by market demand;last,adhere to gradual open capital account policy,reasonably and orderly open our capital account.