| In recent years, with the process of economic globalization, economic financiarisation, financial freedom, financial globalization present a tendency of accelerating to develop. Especially under the capital project's opening to the outside, which initiated the large-scale short term capital (also named "hot money") to inflow more easily, became the most important reason of causing economical crisis and financial crisis in developing countries. Our country have an imperfect financial system,the money market open and mature degree is insufficient, in addition to the financial regulation's limited experience, monetary disturbance's familiar degree and bearing capacity all have some gaps compared with the developed countries. So international floating capital's negative effects are prominent in China, the effects on them are also bigger. Therefore, while enjoying the maximum benefit from international capital movement,discussing how to reduce the risks international floating capital brings to the lowest level effectively will be very important to maintain our country's economic security in practice.On the basis of redifination of "hot money",this article measures the size of hot money flowing into China from Jaunuary,2001 to August 2009 using the numbers of new foreign exchange reserves, trade surplus and foreign direct investment.Then we analyse the usual ways hot money flowing in and the effects to the financial security in China.In order to investigate the true motivation of short term capital,we do some empirical tests with the ARMA model. We conclude that interest arbitrage and exchange arbitrage are two vital reasons for hot money flowing into, however, the causes coming from securities market and houses market are not so obvious as we usually know. At last, after drawing on the international experience in regulatory hot money and analysing the Situation,we propose some countermeasures to strengthen "hot money" supervision with existing supervision environment in our country. |
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