The Estimating Scale, Influencing Factors And Countermeasures Of Inflow Hot Money In China

Since the1980s, with the wave off of global economic integration, the general recognition of the market economy, academics、politicians and the business community across the world have endorsed the financial liberalization based on market efficiency and market fair. Financial innovation、derivatives and the rapid growth of the virtual economy, making the flow of cross-border funds become more frequent. But at the same time, Frequent movement of huge international hot money have pose a seriously affected on developing country, and thus reinforce the importance of the supervision of the international short-term hot money.Since July212005, the Chinese government restart the reform of RMB exchange rate formation mechanism, the RMB appreciation has been a hot topic in the international economy, after that a large number of international hot money flow into China.This article is from this perspective. After a large number of cross-border hot money into the country, there are related issues,(1) capital inflow channels. Solving the above problem will help us to control the scale of hot money inflows and outflows;(2) estimating the scale of hot money;(3) to explore the impact of main factors into the hot money;(4) how to improve our existing regulatory system. Around the answers to these questions and solutions have form the main content of this article. Therefore, under the new international and domestic environment, it is much important to investigate the characteristics of international capital flows seriously, sum up approach to maintenance of our financial security.The main content of this paper is divided into six chapters,The first chapter is a summary of the status of the domestic and foreign literature about the study of hot money. The second chapter clearly defines the hot money definition, characteristics and sources. The third chapter discusses the inflow channels and estimate scale of hot money. The fourth chapter of the article discusses the impact of inflow hot money, pointed out that there are pros and cons of the impact for the country’s economic development. The fifth chapter discusses the causes and empirical analysis of hot money inflows in China. The conclusions in this article is the RMB exchange rate changes and the Sino-US spreads is the main reason for attracting hot money inflows. In last Chapter, this paper proposes a strategy to strengthen the supervision of China’s hot money.In this paper the main innovation is that improve the hot money calculation method. The inadequacies of this article is that the final estimation results is rough, and contains some of the long-term capital. Short-term hot money flows is a volatile, complex process, so this topic needs to be further research.