China's Economy Under Open Conditions, Internal And External Balance Study

In the open economy, the aim of macroeconomy controlling is to realize macroeconomy internal balance and external balance, namely macroeconomy equilibrium implies internal balance and external balance simultaneous. Internal imbalance and external imbalance are interactional and interdependent, they have consistency and conflict. Consistency indicates internal imbalance inducing external imbalance, external imbalance can also lead to internal imbalance. The two kinds of imbalance can be reciprocity and transformation. Conflict indicates that external imbalance is worsening when we take measures to aim at internal balance, vice versa.At present, China economy internal imbalance and external imbalance are worsening. Internal imbalance manifests overplus of save and too high of investment increasing, consumption, especially resident consumption is shortage; external imbalance manifests the increase of"twin-surplus". Thus, foreign exchange has been increasing fastly and Renminbi has the pressure of appreciation. Internal imbalance is primary and descides external imbalance. At the same time, external imbalance aggravates internal imbalance. The interest aim and foreign exchange rate aim of monetary policy are conflicting. So macroeconomy controlling attends to one thing and loses another or plunging into policy plight. Now, China macroeconomy running appears"tri-overplus problem"----the problem that investing quantum, credit quantum and trade surplus are all increasing fastly is the reflection of internal and external imbalance. At present, domestic banks have liquidity, economy is hotting and manifests inflation, the number of trade friction case is increasing fastly, the pressure of Renminbi appreation is aggravating.If the state is standing,"Bubble Economy"will be emerging which will lead to financial crisis. Not only are internal imbalance and external imbalance harm to economy welfare, but also the pressure accumulating of disequilibrium will lead to landfall. That causes national economy fluctuating. Macroeconomy controlling should know the trend of economy development, realize economy dynamic equilibrium, and promote economy development stably, correspondly and continuously.On the basis of Open Macroeconomics, the paper uses equilibrium analysis method, deductive and induction method, adopts positivism and criterionism to discuss the history evolvement and new connotation of internal and external balance, advances relationship mechanism between internal and external imbalance. The paper uses IS-LM-BP Model to summarize contradiction adjusting mechanism of internal and external imbalance. From history point of view, the paper summarizes experience in adjusting internal and external imbalance of developed countries and developing countries. Then, this paper reviews China macroeconomy controlling policy confliction, appraises the effect of macroeconomy controlling policy from 2002 year, states causes which lead to internal and external imbalance, and analyzes China internal and external imbalance from point of views of"overtake stratagem", tradition economy and the global imbalance.The paper points out the causes which lead to internal and external imbalance are complicated. There are not only external factors such as global economy integration, world industry structure adjustment, and the limitation of international maontary system, but also internal factors such as domestic traditional economy development stratagem, etc. There are not only long term factors such as system, but also short term factors such as disharmonious macroeconomy policy. So, the paper puts forward a total idea which deals with internal and external imbalance, explains policies particularly including long and short term policy, and expects to manage economy disequilibrium synthetically and comprehensively. To manage economy disequilibrium, government should strengthen and improve macroeconomy controlling, makes its policies more efficiency and science in the short term, and should deepen system reformation, improve socialist market economy, and change traditional economy development model.