China’s Capital Account Liberalization Effect And Mode Selection

One of the important contents of economic liberalization and trade liberalization is the opening ofthe capital account.Since the nineteen ninties,many countries began to relax controls on the currentaccount.And as the global interests of the temptation,many countries began to relax controls on thecapital account.However, the financial crisis in Latin American countries, Mexico, the exchangerate crisis in the Southeast Asian country showed that there is a risk of capital account liberalization.So, how to fully understand the benefits and risks of capital account liberalization and to takeopen-door policy at the appropriate time which can reduce the risk to the lowest level has becamemany emerging market countries problem,China is no exception.This paper is divided into six parts.The first chapter is the introduction part.This part mainlyintroduces the research background,significance of the capital account,and the relevant researchresults at home and abroad.And on this basis,I introduce my research ideas,research methodsetc.The second chaper briefly descibes the relevant concepts of the opening of the capital accountand its connnotation and analyzes the necessary conditions for opening capital account.In this part,Isummary the measurement methods of different academic on the capital account and analyze thechallenge after opening capital account:its benefits and risks.In the third chapter,I choose tworepresentative countries-Japan and Chile,analyze their’s gain and loss.In the process of China’sopening up the capital account,the fourth chapter briefly discusses the history of China’capitalaccount liberalisation,conditions etc.In addition,I combine the measure data mentioned before.Wecan see that our country still has more stringent controls on capital account,its opening degree islow.In the fifth chapter,I analyze the advantages and disadvantages of capital account openingform.Opening the capital account has a good side,the capital account liberalization can improveChina’s financial system,promote national economic.But also there exits risk such as causeinflation,will influence the international balance of payments etc.So,we should correctly treat thisproblem.The second part of this chapter using Eviews software analyze the relationship betweencapital account liberalization and economic growth,which shows that it really has a promotingeffect on economic growth.In combination with the theoretical analysis and the specific situation ofour country,I put forward some principles in the sixth chaper.In this way,we can get gains andreduce the risks.I give some policy recommendations and strategies in this part.So,China will winsuccess on its ways which has Chinese characteristics. This paper analyze China’s capital account opening from theory and practice,the typical case andthe present situation of our country,the successful experience and failure lessons.In my process ofwriting, I always combine theory and practice together,other countries’experience and lessonstogether.I analyze the situation faced by our country,and put forward some feasible policysuggestions.