China's Multinational Capital Flight

With the growing integration of global economies, China'sinternational companies developed rapidly. On the one hand, foreigncompanies made large amount of direct investment in China. On anotherhand, Chinese companies participated in global competition with greatenthusiasm. While cross border capital flows become more frequently,strict foreign exchange controls in China increased the cost of capitalflows. As a result, some companies tried to avoid the controls throughinternal trade, internal transactions and offshore financial centers. Thereare two kinds of capital flight in china. One is called "pure capitalflight",which is realized through internal trade and transactions. Foreigninternational companies usually use this way. Another is called"round-tripping capital flight" , which is realized through offshorefinancial centers. The capital flight harms China's financial security. Inthis dissertation, I analyzed the capital flight in China and its influence toChina's economy. I also gave some suggestions on capital controls, taxcontrols and foreign exchange controls.