Research On The Construction Of State Economy Security Alarming System

As blood to our body, financial security is crucial to the health and stability of state economy, which in turn have a significant impact on the overall development of the economy or even society. Since China’s accession to the WTO in 2001, the opening up policy has been accelerating and financial regulation has been abated. Combined with the speeding up of financial globalization and rapid economic development, however, a variety of economic and financial issues have been disclosed, including domestic credit expansion, mismatch between risks and benefits in banking system, heavy burden of government debts, bubbles in shares and housing and the occasional shocks by international capital, which threaten the security of state economy. Therefore, alert and prediction of state economy security by reasonable model is critical not only to guaranteeing the safety and stability of state economy, but also to the security of the whole nation and society.Firstly, this article mainly focuses on the background theory by introducing the concept of financial security and the associate system and description of architecture and principle of RBF neural network, followed by its advantages and feasibilities of application in financial security alarm. Secondly, aiming at analysis of the state economy security, an overview of the security condition of the state economy is presented and the internal and external factors are analyzed as well. Based on the above observation and the past research results, a state economy alarming index system is proposed. The five sub-systems, macro economy, banking system, government debt, stock & houses and foreign economy constitute the whole system and 27 indices are introduced. Combined with the real data between 1997 and 2013, an RBF neural network model is composed. With this model, Principal Component Analysis and hierarchical clustering method, an alert and analysis of 2014 economy security is formulated. In the end, based on the above analysis and evidence, some according advices to the state economy risks are presented, followed by suggestions of the state economy security alarming system. The analysis in this article validates the effectiveness and feasibility of RBF in constituting state financial economy alarming system and its application is highly anticipated.