Impact of the International Short-term Capital to Asset Prices in China
|School||Tianjin University of Finance and Economics|
|Keywords||International short-term capital The stock market The real estate market Research association Policy suggestions|
With the deepening of economic globalization, the international short-term capital scale increase largely. The mass inflow or outflow will affect the normal operation of a country’s economy. From Mexico financial crisis, Asian financial crisis to Russian financial crisis, Brazil crisis, we find every crisis is directly involved in the international short-term capital. And when the international short-term capital enters or leaves a country market, it tends to cause sharp price fluctuations in the stock market and real estate market and it disrupts the normal operation of the stock market and housing market to cause the stock market and housing market collapse, or even financial crisis. These are worthy of our attention and deep thinking.At present, China is at a stage of economic transformation. Its’ fast development and deepened openness and relative stability of domestic economy attracts short-term capital inflowing. Short-term capital entry to China to fluctuate price in stock market and housing market and it also has brought a great deal of uncertainty and risk to China’s economy.The paper makes theoretical and Empirical Analysis on the influence of international short-term capital flow on stock price and house price. First, we analyzed the trend of the short-term capital flow and the price-fluctuation of stock and real estate in China in recent years. By contract, we find they have some common features. Second, we study motivation, policy basis, circulation way, profit mechanism, negative influence that short-term capital flow into stock market and real estate market. It confirms the fact that the short-term capital flows into the stock and property market. Third, we construct of VAR model related factors of international short term capital, stock-price and house-price. Through a variety of inspection, we conclude that when short-term capital inflow into a country, the price of stock and house will fluctuate remarkably. The fluctuation of stock price is relatively complex, early to rise, then the stock will fluctuate. In contrast, house-price rises slowly and then rises quickly. The reason is that the real estate industry has a longer period, the funds after entering will last for a period of time effect, on the contrary, the stock market has price volatility, turnover rate higher characteristic and funds in and out of stock market is relatively easy. At last, in order to guarantee the normal operation of the stock market and the housing market, disturbance from external shocks, we put forwards many suggestions from the national macro-control, short-term capital regulation, the stock market and housing system and other aspects.