Capital Account Opening Of Developing Countries And Enlightenment For China

Opening the capital account is one of the most important tasks in the process of a nation's economic liberalization. Since the 1990s, with the development of trade liberalization and the release of restriction on current account, to establish a sound financial market for promoting rapid and healthy development has become a main aim in a nation's economic system arrangement. Decision-makers in developing countries are by and by faced with the problem of opening the capital account. As a reform experiment, capital account opening seems to be the most difficult, the most controversial and the most risky in the developing countries' economic liberalization. The financial crisis in Latin America between the 1970s and 1980s, the Mexican rate crisis in 1994 and south-east Asia financial turbulence in 1997 all connected with the speed and ways of capital account opening. How to learn the benefit and potential risks in opening capital account and how to gain most benefit and prevent the financial crisis has become important task faced all developing countries. With the deepening of the economic system reform and opening up, capital account opening is the demand for China to develop market economics. It is also the need for China to really come into the world and integrate with global economics. On the first of September, 1996, China accepted the eighth term of IMF agreement and basically realized the RMB convertibility. Entering the WTO, especially the commitment on opening the financial industry, means China's capital account opening will be the focus in reform process.There are three parts in the article. The first part mainly introduces capital account opening-related concept and theories. On the basis of clarifying capital account and capital account opening, the part analyzes the sameness and differences between the opening and restriction of capital account.The second part introduces the process of developing countries from firmly restriction to restriction release to opening the capital account. It points out the history and trend of developing countries' capital account opening. After that, the part analyzes the practices of Chile, Thailand and Indonesia and draws some beneficial experience and lessons.The third part introduces the situation of China's capital account opening, especially the new measures China took after entering the WTO. It further points out that China must maintain the positive and progressive opening pattern. In the financial opening, the capital account opening can not be avoided. In order to make a success in capital account opening, it is crucial for China to prevent risks through strategic arrangement and policy co-ordination.