China’s "Lost Money" Issue

1973 US economist Mckinnon in "economic development money and capital" in the proposed M2/GDP index, and as a measure indicates the Chinese currency "Lost" problem. China’s broad money supply M2 in the next 30 years has been maintained between the high growth rate, the stock of M2 in 2013 has more than a million billion scale, M2 to GDP ratio has reached a new historical high. In this regard, the issue of academic debate controversy over China’s currency did not stop.Theory to explain China’s "currency of the mystery" of scholars from different angles on the proposed hypothesis has its own rationality, but still there are many limitations and shortcomings, did not form a more unified understanding. In this paper, the relevant research literature on China over currency issues were reviewed carding system, combined with the new era of China’s market-oriented reforms a reality, imported from foreign exchange due to excess liquidity, land monetization process and virtual the economic expansion of three aspects investigated the effects of supply and demand for the Chinese currency. On the basis of extending Yi Gang, who proposed monetization hypothesis, proposed land monetization process as a new perspective of China’s reversal type intervention mechanism to explain China’s "lost money" issue, as the Chinese currency "Lost" issues The new analysis path.