Reseach on several issues regarding international capital flows

This thesis will start by introducing the scale and relevant features of global capital flows, as well as emphasizing differences between capital flows to the developed markets and the emerging markets. With the historical review and theoretical analysis of international capital flows, this thesis takes up the effects of capital flows and concludes some important factors of influencing capital flows. Perhaps the main one of these factors is financial and capital account liberalization in most of the countries of the world. However, in countries with an open economy, risks of international capital flows and energy of occurrence of financial crises have been successively accumulated. When an inducement of risks occurs, risks will possibly be transformed into financial crises. Therefore, the discussion on the process of risk creation helps form a frame which is used to monitor risks of capital flows, especially short-term capital. The indexes under this frame will be evaluated from three various angles-macroeconomic, microeconomic, and market confidence, each of which respectively represents different risk points and shows a country's problems at different risk points. All the above aspects discussed will eventually provide us with key elements to analyze the challenging policies as regards managing international capital flows. At present, developed countries would generally like to choose a relatively loose policy of capital liberalization. Yet, because of differences between developed countries and developing countries in terms of market systems, economic architecture, foreign trade, balance of payments, most developing countries adopt the policy of 'strictly tending to be loose'.

No doubt, Chinese economic growth in the last twenty years has been fairly surprising. China's capital controls have a big impact on its economic development. By recalling the development of foreign capital in China, we may come to a conclusion that capital controls have played an important role in preventing the abnormal economic fluctuation. Certainly, there are still several problems related to international capital flows to be emphasized and solved.