Estimation To Capital Flight Scale And Analysis Of Its Influence On Economic In China

After the debt crisis in Latin American countries in 1980's, the financial crisis in Mexican in 1994 , as well as currency crisis in Southeast Asia, economists begin to pay attention to a strange phenomenon in developing countries, that the massive foreign capital flow into developing countries, with the large amount of capital outflow developing countries, capital flight is becoming a cause for concern again. China is during a period of economic system transition, inevitably plagued by the problem of capital flight. In this paper, on the basis of foreign and domestic literature, we estimate the scale of capital flight in our country from 1990 to 2005.In light of Chinese actual situation, we analysis the origin of capital flight. On the basis of estimate of the capital flight scale, we make empirical study of the impact of the capital flight to economic.The first chapter mainly introduced domestic and foreign theory achievement in three aspects of the definition, estimate method and the origin of capital flight. Capital flight can be defined broadly divided into two categories, namely, namely, generalized capital flight and narrow capital flight. The concept of generalized capital flight take all capital outflow in the developing countries as capital flight, while the concept of narrow capital flight tries to take the capital flight from the normal capital outflow, and there is a basic consensus that the capital escapes is one kind of abnormal capital flows out, but the different scholars on how to define such abnormal is difference. They use social contract, state interest, tax regulations, capital controls and so on to define the narrow capital flight.And correspondingly, the measure of estimating the capital flight mainly includes direct measure, indirect measure and Dooley measure. Direct measure is using short term capital outflow item that responds to the domestic unusual risk rapidly, generally used to estimate the narrow capital flight scale. Indirect measure use the remainder of the foreign debt balance of payments account, net foreign direct investment inflows, official reserves and the increase in the current account deficit to indirectly estimate the of capital flight. Indirect measure covering all private and public sector net external creditor places, not distinguish between speculative and non-speculative capital outflow and normal and abnormal outflow of capital, so it use to estimate generalized capital flight. Dooley measure is a mix of direct and indirect measure. To the origin of the capital flight, scholar study in aspect of the investment, political risk, super-national treatment. The forth chapter introduces the estimate and origin of capital flight in our country. First, we use direct and indirect measure to estimate our capital flight, and adjust the results with the trade false and the trade credit, recording as"ACCF1K","ACCF2K","ACCF3K"and"ACCFM". Comparing four groups estimate value, we found that four groups of the estimate value of the capital flight have the same change tendency. That is to say, despite the estimate measures of capital flight and the value of estimate result are different, the situation reflects changes in the scale of capital flight is the same.Then we take the average of four estimate results as the value of capital flight, recording as AVCCF. By AVCCF analysis, we found that the capital flight has the following features: 1. the scale of capital flight is large, and there is a rapid growth trend. China's large-scale capital flight all above 20 billion dollars, and rose to 106.6 billion dollars in 2000, is 5.2 times than that in 1990; 2. it is possible for capital flight to sudden outbreak unpredictable. The amount of capital flight from 1997 to 2000 increased considerably. The capital flight rose from 40.7 billion dollars in 1996 to 106.6 billon dollars in 2000, the paroxysm is very strong; 3. Thirdly, is been remarkable influenced by macroeconomic situation, has the obvious policy synchronism. In the period of economic disorder, the scale of capital flight expanse, while the economy growth steadily grows, the scale of capital flight can be brought under control. According to estimate of the scale of capital flight, and in light of China's actual situation, we try to find the factors which could lead to capital flight, such as the existence of a macroeconomic instability; conditioned by financial circumstances; lack of protection of property rights; super-national treatment; the existence of illicit income; budget deficits and inflation; devaluation of the RMB exchange rate and so on. Chapter 5 analyzes the influence between economic and capital flight in the aspects of international balance of payments, financial system and economic growth. We use VAR model to analysis of the interaction between economic growth and capital flight.Results from the analysis, we can see that the economic growth to significantly inhibit capital flight, that is, positive economic growth can control capital flight scale; while negative economic growth can expansion the capital flight. This conclusion is consistent with analysis above. And the impact of capital to economic is not significant negative. It is because the there are many factors impact on economic growth, and the change of the capital flight is not the main reason. On the other hand, there is particularity in Chinese capital flight: first, although the capital flight scale is huge, the domestic investment is not in serious shortage; Second, there is a lot of"transitional capital flight"in capital flight. The domestic capital is attracted by the super policy of the foreign capital, and gets the identity of foreign capital by capital flight, then it is invested into the mainland by the foreign investor; Third, China's foreign debt is not a major source of the funds to capital flight, and it alleviated the pressure of liquidating foreign debt caused by capital flight, and also avoided the vicious circle that the government has to bring money with higher cost because of the ability of repaying debt descending.All above, we can see that, the measures such as to maintain a stable economic growth, abolish super national treatment and so on all can control the capital flight.