Research On The Formation And Transfer Of The Dominant Power Of International Finance

With the outbreak of the financial crisis in2008, it becomes the consensus of theinternational community that the international financial system needs to be reformed.The redistribution of the Dominant Power of International Finance（DPIF）becomesthe focus and difficulty of the reform. However, the literature on DPIF is very little.In this dissertation, taking the formation and transfer of DPIF as the research subject,it has been preliminarily studied that the connotation, characteristic and function ofDPIF, the process, logic and conditions, international game of formation and transferof DPIF, its economic impact, the development trend and China’s countermeasure.First of all，the problems are studied that the connotation, characteristics andfunctions of DPIF, the process of formation and transfer of DPIF, and the similaritiesand differences between British and American mastering DPIF. In this dissertation，DPIF is defined as “the countries with a certain economic strength and internationalstatus have the initiative and say by negotiation and cooperation actively participatingin international financial affairs，protecting their legitimate rights and interestsenjoyed， maintaining international financial stability development，guiding thedevelopment direction of the international financial order”. DPIF includes thedominant of the international monetary， of international financial market，ofinternational financial institutions and of international financial regulation. DPIF hasfour characteristics of structural，game，polygon and virtual. In the history，theNetherlands，the United Kingdom and the United States had in the hands of DPIF. Ithas been experienced the germination, formation and mature stages. It is found thatthere is difference in access and operation mode of DPIF between the United Statesand Britain, but they both face similar trouble of the Triffin dilemma and thehegemony decline.Secondly, the formation and transfer of DPIF’s logic, conditions, andinternational game process are analyzed. Its formation is the need of the developmentof world economy, the transfer is the result of the international game, the recognitionfor it is the process of public choice under anarchy in the world. A country to graspinternational financial control needs domestic conditions of material, market and theconfidence, and international conditions of world markets and the world patternchange. This dissertation revealed the international game process of DPIF byconstructing the boxed pigs game model between big and small states，as well as theprisoner’s dilemma，the game model of contract and financial hegemony between the powers. Now，the international financial system is essentially the US’ financialhegemony.Again, the economic impact of DPIF is analyzed. Based on theory of aggregatedemand of Keynesian macroeconomics，this dissertation constructs a model of twocountries in the world economy accounting. With the model，the impact of theinternational monetary distribution to domestic and foreign economic growth andinflation has been studied. It demonstrated the impact of the dominant power ofinternational monetary for the world economy. Then，taking the United States and thedollar for example，to analysis the relationship between$issue and world economicgrowth. The result showed there was positively correlated relationship between thedollar and world economic growth，especially in east Asia. There are， of course，problems such as global inflation and asset bubbles, and loss of monetary policyindependence.Finally, the possible trend of DPIF transfer is analyzed, based on it China’s roleis established, China’s countermeasures to gain DPIF is put forward. It is consideredthat it is most possibility for multi-polarization. China shall position itself in a role inthe three pillar. First，China should strength domestic base from three aspects of theeconomic development，the financial system and comprehensive strengthen. Second，China should seize the key，taking the easy before that are difficult. The emphasis ison steadily pushing forward the internationalization of the Renminbi and acceleratingthe construction of Shanghai international financial center. At the same time activelyovercome two difficulties， strengthening theoretical innovation research andpromoting the reform of international financial institutions. Third，steady progress，step to step. China should actively voice in various international occasions to improveChina’s international influence. China should make use of bilateral and regionalmonetary cooperation for internationalization of the Renminbi. China should promotefinancial influence by the international economic and financial cooperation.In this dissertation, DPIF’s formation and transfer is studied. Its maincontribution is to reveal the core issue of the international financial system, theinternational financial control, and the difficulties of reform for the internationalfinancial system, the redistribution of DPIF, which provides the theoretical basis forChina to gain DPIF. The main innovation points of this paper is to put forward a newconcept called DPIF, building international game model of formation and transfer ofDPIF and accounting model in the world economy, designing the strategic objectivesand measures China gaining DPIF.