Empirical Study Of The Influencing Factors On The Short-run International Capital Flows In Framework Of Market-oriented Reform Of Exchange Rate

In the beginning, the international capital was used for mutual trade goods payment, then, it became the international direct investment for the purpose of production, which turn into short-term international capital for arbitrage speculation. Since the reform and opening to the outside world, although, on the whole, China has a relatively strict capital control policies, but many signs that the short-term international capital could bypass capital controls, the inflows and outflows on a large scale in China. After the outbreak of the east Asian financial crisis of 1997 large capital outflows, China the attention of many scholars at home and abroad. After joining the world trade organization in 2001, the Chinese economy is becoming more and more closely integrated into the global economy, the government also gradually relax capital account controls. In 2002, the errors and omissions item in China the balance of payments for the first time in 12 consecutive years after negative change is, this means that the short-term international capital flow to shift, from capital outflows into a large number of short-term international capital flows. The flow trend in 2005 China’s exchange rate regime by peg to the dollar peg to a basket of currencies instead after more strong. In 2007 the subprime mortgage crisis and trigger after the international financial crisis, global financial institutions "financial leverage" trend of strengthening, short-term international capital into China and reversal of momentum. But as the improvement of Chinese economy, especially the appreciation of the RMB is expected in 2010 and the benchmark interest rate increase, under the condition of short-term international capital began to flow. Since the second half of 2011, because of fears of a hard landing of the economy in China, the trend of short-term international capital to flow.Short-term international capital flows is a "double-edged sword". On the one hand, the appropriate scale of international short-term capital inflows is beneficial to make up for a lack of domestic capital, improve the efficiency of the international operation of capital, promote the economic development of China. Short-term international capital, on the other hand, have to sneak into the huge, flow speed and reverse the characteristics of strong, macroeconomic stability of our country has formed a huge challenge. If short-term international capital flow scale is beyond the market capacity, may lead to the country’s economy is overheating, inflation and macroeconomic policy failure, economic vulnerability increased, while the sudden reversal of short-term capital flows may lead to China’s exchange rate regime collapse, currency crisis, and even the comprehensive economic crisis. Because of worries about negative effect of short-term international capital flows, scholars for this year to constantly accelerate the marketization of exchange rate reform is controversial. Scholars think the marketization of exchange rate reform will make frequent fluctuations of exchange rate, exchange rate fluctuations will through capital flows, especially short-term international capital flow channel influences a country’s financial stability, so treat the marketization of exchange rate reform should be careful. Also the scholar thinks, marketization of exchange rate reform so as to improve the level of marketization of exchange rate, is the effective tool for the relieve excessive short-term international capital flows. Based on the above, the marketization of exchange rate on the influence of short-term international capital flows, discussed the influence factors of short-term international capital flows, is conducive to the rational exchange rate marketization reform, also for the short-term international capital flow management to provide theoretical basis and guidance.The structure and main content of the paper is as follows:Chapter 1 is introduction of the research background and purpose, method, significance, possible innovation and inadequation. Chaper 2 is literature review and theory introduction. Chapter 3 presents a detailed descriptive analysis of the marketization of exchange rate. Chapter 4 explores whether the link between the marketization of exchange rate and the short-run international capital flows exist. Chapter 5 chooses some explanatory variables on bases of the theories, such as the interest rate, the asset prices and so on.The main conclusions of this paper is, including exchange rate appreciation expectations and the marketization of exchange rate level, exchange rate factor is the primary explanation factors of short-term international capital flows, raising the level of marketization of exchange rate can reduce the short-term volatility of international capital flow, which in part how the exchange rate marketization is a effective tool to prevent excessive volatility of short-term international capital, our country should perfect the marketization of RMB exchange rate formation mechanism.