Early Warning Index Establishment And Empirical Test Of Financial Crisis In China

With the development of the economic internationalization, interdependence of national economies in the world continues to grow,more and more financial crises have occurred in the world. The financial crises had caused serious harm to the global financial markets and the world economic development. In particularly, the U.S. subprime mortgage crisis in 2007 led to the global economy as a whole into a recession. Because of China's high dependence on foreign trade, export industry of China has been seriously dameged by this recession. At present, China is still in economic transition period, the market economy system, financial system and regulatory system is not perfect, the inherent vulnerability also exsists in the economy.So, our country has accumulated a large number of financial risks. Although there is no large financial institutions out of business, and no serious financial crises, it does not mean our financial institutions outside of exposure to systemic financial risks. Therefore, it is very urgent and important to establish early-warning indicator system for China's financial crises.This paper is formed under such a background,and the purpose of this study is: trying to establish early-warning indicators of our country's financial crises, and China, predicting the situation of China's financial operations over the next 12 months, in accordance with the actual situation of China's economic and financial development.This paper can be divided into six parts, the concrete structure is as follows:The Introduction briefly describes the background and significance of this topic,the basic ideas and logical structure of this paper, and the methods of research.Chapter 1 reviews the theoretical foundation for the financial crises and the financial crises early-warning research in the theory at home and abroad. Theoretical reviewing is useful to develop the following study. At home and abroad, the study on the theory of financial crises and its early-warning system has achieved a very high level,obtaining many fruitful results after years of development,which provides many useful references for our establishment of the financial crises early-warning indicators system.Chapter 2 concentrates on the international financial crisis early-warning indicator system. By analyzing the induced factors and the pathway of financial crises,this paper introduces the foundation of the current international financial crisis early-warning indicator system to establish.Chapter 3 focuses on analysis of the main source of China's financial risk, and lists the differences of risk sources between domestic and foreign.On the basis of the actual situation of China's economic development, the author analyzes in detail the source of China's financial risk,respectively from five aspects of the banking, securities, foreign exchange reserves and external debt, international capital flows and the the bubble economy.Chapter 4 is the most important part of this thesis, in which the author tries to establish our own early-warning indicators system of financial crises and conducts empirical analysis. This chapter begins by describing the principles of early warning indicators establishment, and then gives an early-warning indicator system of our country's financial crisis. Finally,the author conducts an empirical analysis with the methods of factor analysis and ARIMA model,which makes judgments on the economic situation of China and predicts the possibility of a financial crisis in China next 12 months.Chapter 5 is conclusions of this paper. This paper tries to establish our own early-warning indicators system of financial crises on the basis of China's economy development situation and gets some meaningful conclusions.During the writing process,the most difficult problem the author was confronted with was the lack of concrete data,so the author only selected a part of representative indicators to conduct empirical research.The indicators established in this paper inevitably bring with subjective tendency of the author. Therefore all the paper can present is nothing but a framework of ideas.There are still many problems to be settled.In future,the author will study this topic relentlessly.