Research On The Relationship Between Capital Account Liberalization And Systemic Financial Risk

With the emergence of the wave of globalization,the openness of China's capital projects has continued to advance.The improvement of the openness of capital projects is not only conducive to the structural improvement of China's financial market system,but also injects fresh blood into China's macro-economy.It is also conducive to promoting cooperation between China and the other countries and improving China's international competitiveness and internationalization.However,the opening of capital projects will also inevitably lead to capital flight and so on.The accumulation of systemic financial risks in the country will threaten the stability of the financial system and even trigger a financial crisis.Therefore,exploring the relationship between the two has become a hot spot for many scholars.This paper explores the relationship between capital project openness and systemic financial risk.Firstly,the article expounds the related concepts of capital project opening,summarizes the current status of China's capital project opening process,and uses the fact index method proposed by Lane & Milesi-Ferretti(2001)as a measure to calculate the overall openness of China's capital projects between the first quarter of 2007 and the fourth quarter of 2017.Secondly,the article discusses the theoretical mechanism and measurement methods of systemic financial risk,analyzes the current risk forms in China,uses the analytic hierarchy process to establish an indicator system to calculate China's systemic financial risk between the first quarter of 2013 to the fourth quarter of 2017.Finally,by constructing a VAR empirical model,Granger causality test and impulse response analysis are used to analyze the relationship between the capital project openness and systemic financial risk.Through the above research,the article draws the following conclusions:(1)The degree of openness of China's capital projects is constantly increasing in volatility,and the level of systemic financial risks is relatively stable.(2)The opening of capital projects can affect the level of systemic financial risks through multiple channels such as macroeconomics,financial institutions,and financial markets.(3)The opening of capital projects will indeed have an impact on China's systemic financial risks.The opening of capital projects that are too fast will increase systemic financial risks and have an adverse impact on China's economy.This paper hopes to further understand the internal relationship between the capital project opening and systemic financial risk by combining theoretical and empirical analysis,and provide reference for China's financial system to prevent and control risks and build a security system to help Chinese economy which is under the ?new normal? of development to prevent and resolve systemic financial risks.