Research On The Impact Of Short-term International Capital Flow On China's Capital Market

In the current context of international slowing economic growth,the scale of China's capital flow have risen and the frequency of two-way fluctuations has increased.Capital flows play an active role in activating financial markets and promoting the rational distribution of capital in the world.At the same time,however,The rapid advancement of large amounts of international capital is likely to have an impact on capital and financial markets,which will bring instability to China's economy,especially short-term international capital,it will have a greater impact because of its flexibility and destructive power.As an important part of China's financial market,the capital market has been expanding in scale,enhancing the ability of international financial innovation and enriching off-balance sheet business in recent decades.While providing a competitive place for various financial forces,the capital market also gives full play to its functions such as financing and capital allocation,starting from the three major directions to serve the development of real economy: service supply side structural reform,support for entrepreneurial innovation and national poverty alleviation and development strategy.The Chinese government also has attached great importance to the capital market.The report of the Nineteenth National Congress of the Communist Party of China pointed out that we should deepen the reform of the financial system,enhance the ability of financial services to the real economy and promote the healthy development of multi-level capital markets.Therefore,in this context,it is indispensable to explore how capital flows affect the capital market.Based on the above background,this paper takes the impact of short-term international capital flows on the capital market as the research topics.Firstly,it defines and analyses the related concepts and basic theories,then analyzes and explains the influence and mechanism of capital flows on capital market.Secondly,the capital market is divided into five levels,from which representative indicators are selected and principal component analysis is used to construct an index system to measure the capital market.Then,using the monthly time series data from January 2007 to February 2018,this paper construct the SVAR model and empirically analyze the impact of short-term international capital flows on the capital market and its various levels based on the impulse response graph.Finally,according to the empirical test results and conclusions,on the basis of the actual problems existing in reality,relevant policy recommendations are proposed in a targeted manner.