A Study On The China's Imported Excess Liquidity On The Globlization Perspective

The globe economy experiences the excess liquidity and financial crisis since 2005. Many scholars began to discuss the excess liquidity. They try to use tightened monetary policy to solve the above question. But the financial crisis requests expansionary monetary policy. So it is a conflict.As a matter of fact, the excess liquidity will be a question to be study even after the financial crisis. Especially for China, the influence of financial crisis on Chinese economy is not serious, and the Chinese government supplies large quantity of money. So the excess liquidity still exists.Under the open economy, any issue is relative to the international background. So the author tries to study the excess liquidity from the international perspective. Firstly the author analyzes the cause of globe liquidity and the distribution mechanism. Then the author analyzes the characters of inflow liquidity and the inflow channel and tries to find some measure to solve the excess liquidity.The paper is composed of six chapters.Chapter 1 introduces the background of the paper. Then the author sums up the literature regarding the excess liquidity. Lastly the author introduces the method, the outline, the creativeness and the shortcoming of the paper.Chapter 2 introduces three theories, including globe theory, equilibrium adjust theory and international capital flow theory which are the base of the following paper. Briefly the theory base is the international specialization theory.Chapter 3 analyses the liquidity creation and the distribution mechanism. Firstly the author analyses the current international specialization and the globe economy imbalance due to the international specialization. Then the author analyses the current monetary system which is the background of the globe liquidity. Lastly the author focuses on the liquidity creation and the distribution mechanism.Chapter 4 analyses the cause of Chinese excess liquidity. The author applies the empirical analysis to find the cause of Chinese excess liquidity. And the author chooses three variables:foreign exchange reserve, GDP and base money quantity. The overcome shows that the excess liquidity is due to the two factors:foreign exchange reserve and GDP.Chapter 5 analyses the channel to China of the international liquidity. The channel includes real economy and financial perspectives. The position of the Chinese specialization leads to the model of export-oriented and long-term current item excess. So the excess and the hot money are the channel of international capital.Chapter 6 analyses the method to solve excess liquidity. The first is to output the liquidity. And the second is to reduce liquidity input. To do the above mentioned, China must play a role in the reform of international monetary system and change the Chinese position of international specialization.The method used in the paper includes qualitative and quantitative analysis. There are three points to be mentioned:The first is that the paper is written from a new perspective. The paper links the globe economy and the liquidity. So the study is the necessary supplement.Secondly, the author brings out some original ideas. The globe excess liquidity is inevitable due to the current international monetary system. And the Chinese excess liquidity is caused by the input liquidity and extra money supply. The author tries to find the measures to solve excess liquidity from wider perspective.Thirdly, the method is more science and wider. The author applies some proper theory to explain the current situation.Of course, because of the restrictions of research terms, there are some limitation for the paper and await the farther research.