Research on Chinese capital account liberalization under soft constraints

Abstract

This paper will discuss some unfavorable restraint factors influencing Chinese capital account liberalization progress. It will employ theoretical and empirical method to analyze the restraints of foreign reserve increase, foreign exchange administrative regime, imperfect industrial structure and changeable monetary policy to this liberalization with data (1993-2010) and chart. Then, it suggests some basic principles of progressive liberalization, flexible deregulation and differential administration At last, suggestive proposals of controlling foreign reserve quantity, establishing a flexible and effective exchange rate regime, accelerating the reform of industrial structure and setting up an emergent adjustment mechanism will be given. The innovative part of this paper is the establishment of emergent foreign reserve pool. © 2011 Springer-Verlag Berlin Heidelberg.