Research On The Contagion Effect Of The U.S. Subprime Crisis In China

As the development of the globalization and the liberalization of the world financial and economic system,the crisis break out more easily.The more financial innovate, the higher the correlation of the various international financial market become.Financial crisis showed strong contagion.By analyzing the financial crisis that occurred in modern times, the following characteristics can be found.First,the paths of transmission are diversity.The transmission channels of the financial crisis aren't single,but varied. Second is the complexity of the transmission mechanism,a variety of transmission channels do not work alone,but together.Third, the speed of the financial crisis transmission is fast,the speed of transmission is very striking.Fourth, the range of transmission is broad, the range of financial crisis transmission which have occurred since the 1990's is much broader than any previous time; a country's financial crisis spread to another or even the world.Since the U.S. subprime mortgage crisis broke out in August 2007, the turmoil quickly spread to the world which lead to the international financial market turbulence. In the context of economic globalization, the influence of financial crisis exsist everywhere; in the past few years, although China as an emerging market country has maintained rapid growth,this crisis still influence China. In particular, opening up in China's economy and the gradual liberalization of capital account to provide more channels for the financial crisis contagion.The sub-prime crisis transmit to China through different channels,such as trade,finance and so on.So study the channel of the financial crisis transmission and on this basis putting forward policy recommendations to prevent financial contagion is undoubtedly important in theory and practice.This paper is divided into four parts.The first part introduces the concepts of financial contagion;the second part introduce the main transmission mechanism of the financial crisis and on the basis of theoretical analysis discusses the channels of the sub-prime crisis transmitting to China;and third parts conducts the empirical analysis of the sub-prime crisis's contagion;on the base of the above analysis, the last part puts forward the countermeasures and suggestions against financial contagion.