Research On Economic Effect Of Chinese Capital Account Liberalization

Capital account liberalization is one of the important components of Chinese economic and financial market reform.In 1996,China has announced the current account convertibility.But compared with the current account,capital account liberalization process is slightly long and sorry tale.On October 1,2016,RMB was formally incorporated into the IMF's Special Drawing Rights(SDR)and it has the milestone significance on the road of promoting the Chinese capital account liberalization and RMB internationalization.But since the "811"exchange rate reform,RMB exchange rate has began to decrease for a long time and has a serious depreciation expectation.Companied with our unclear economy inflection point and serious asset bubbles,the pressure of capital outflowing is serious.At this time,kinds of capital controls are rising slightly and the discussion of the RMB capital account liberalization causes concerns.Capital current liberalization has complex influences on one country.It may has different influences on the countries with different levels of economic development and the influences between short-term and long-term may be different.Based on the Chinese reality,the ways and extend where capital account liberalization influence Chinese economy and finance remain to be researched.Therefore,the research on the economic effect of Chinese capital account liberalization contributes to clarify the mechanism of influences and guarantee the good development of economy and finance in the process of capital account liberalization.The paper summarizes the theories about the economic effects of capital account liberalization including the economic growth,financial deepening and risk effect.Afterwards,the paper introduces the process and current situation of Chinese capital account liberalization and common methods of measurement and then measures its degree with the fact-index method.Combined with the Chinese reality,the paper innovates the indexes reflecting the financial deepening and risk effect and then it establishes the SVAR model to analyze the economic effect of the capital account liberalization including the responses of economic growth,financial deepening and financial stability.The conclusions are almost consistent with traditional theory analysis.At last,the paper give some suggestions to take full advantage of capital account liberalization and make Chinese economy and finance develop well.These suggestions include choosing the proper mode and order of capital account liberalization,promoting the marketization reform of interest rate and RMB exchange rate,strengthening the macro prudent management and so on.