Research On The Impact Of Sino-US Spread And Exchange Rate Expectation On China's Short-term International Capital Flows

Globalization has made the world's countries more and more connected.From production globalization to economic globalization,capital flows more frequently in the international areas,and the scale is also gradually rising.In addition,the development of Internet technology has made capital The transfer speed between different countries and regions has risen to a new stage.Close economic and trade exchanges have made short-term flows gradually become the most important form of international capital flows.The short?term international capital itself has strong speculative nature,which further accelerates the flow rate of short-term capital and expands its scale.In addition,the continuous improvement of network technology often inereases its concealment,which makes short-term international capital easy.A country's financial markets,especially emerging market countries,have had a violent shock,with serious consequences.Over the past 40 years of reform and opening,China's reform of the financial market has also been deepening,and the relaxation of capital controls has become the trend of the times.For this reason,in the process of increasingly close contact with the countries of the world,China will inevitably suffer from the impact of international capital,especially short-term international capital.As the world's number one power,the United States' economic policy not only affects the domestic market,but also has an important impact on the countries of the world.As the world's second economy,China has a particularly close economic and trade ties with the United States.The differences in interest rates between China and the United States and the fluctuations in exchange rate expectations will undoubtedly bring huge arbitrage space to countless investors in the international market,triggering the flow of short-term international capital in China.Under the background that China's short-term international capital flows are becoming more active,it is of great significance to study the impact of the spreads and exchange rate expectations between China and the United States on China's short-term international capital flows.In this context,this paper seeks out two most important influencing factors of interest rate and exchange rate by looking up the literature on the factors affecting short-term international capital flows,and studies the impact of spreads and exchange rate expectations on short-term international capital flows.Taking the scale of China's short-term international capital flows from January 2005 to June 2018 as the research object,the theoretical and empirical analysis is carried out.In the theoretical analysis,the impact on short-term international capital flows is analyzed from three perspectives:interest rate spreads,exchange rate expectation,and the linkage effect of interest rate and exchange rate expectations.The results show that during most of the period,both Sino-US interest rate spreads and the exchange rate expectation will have a positive impact on China's short-term international capital flows,and the exchange rate expectations will have a greater impact.In the empirical analysis,the Sino-US interest rate spreads,exchange rate expectation and China's short-term international capital flows scale are selected as variables to construct a VAR model to quantitatively analyze the impact of Sino-US interest rate spreads and exchange rate expectations on China's short-term international capital flows.The empirical results show that Sino-US interest rate spreads and exchange rate expectations can have an impact on China's short-term international capital flows.The short-term international capital flows have a faster response time to exchange rate expectations than the impact time of interest rate spreads.The degree of interpretation of the change in flows is higher than the degree of interpretation of the spreads.At the end of the paper,the conclusions are drawn from the results of theoretical analysis and empirical analysis,and policy recommendations are proposed from three perspectives:interest rate,exchange rate reform,and monitoring and early warning of short-term international capital flows.