Analysis of Capital Control Policies in China

Abstract

With the continuous development of economic globalization and the liberalization of China’s capital account, and the scale and frequency of international capital flow are constantly increasing. These cross-border capital flows not only promote the domestic economic development, but also bring many potential risks to the domestic economic and financial system. Many international organizations’ and countries’ views on the capital control also changed, and put forwarded the policy framework of capital flow management, including macro prudence and capital flow management. Furthermore, the capital control policy itself and its effect also become the focus of governments and the academia. Based on the establishment of monthly and quarterly capital control indicators in 1995-2018, this paper analyzed the characteristics and trends of China’s capital control policy. The results show that: the intensity of China’s capital control policy is fluctuating and decreasing, and the restrictions are gradually relaxed, and the development of economic globalization is obviously affected by domestic economic environment and international factors.