An Analysis On China's Financial Risks Of Capital Accounts Liberalization & Financial Supervision

To fullfil capital accounts liberalization is the aim of China's reform of foreign exchange administration after fullfiling current accounts liberalization and entry into WTO.On the one hand, capital accounts liberalization is good for one country to absorb foreign capital,therefore accelerates the economic growth. On the other hand, the international capital, especially the short-term international capital, would cause risks of absorbing capital and impact on financial industry when it flows in or out larglly and rapidly the country, especially the developing country.We have to research emergenly on how to enhance the financial supervision to control the financial risks of capital accounts liberalization.The paper bases on the theoretical and emprical analysis, and shows that we should learn from the lessons of the Asian financial crisis and the experience of the financial supervision of developed countries. Based on the problems of china's financial supervision, the paper also tells that we should enhance financial supervision on the aspects, including the procedure of capital accounts liberalization, the financial supervisory theory, the legal system of regulations for the financial industry, co-operation with financial supervision institutions each other, the reform of foreign exchange administration, the financial risk warning system, the messurements to solve the problem of financial crisis, co-operation with international supervision institutions.