Analysis of China's Short-term Capital Flow Based on the Errors and Omissions Account

摘要

In order to judge the causes of China's short-term capital flow, this paper analyzes the fluctuating trend of the errors and omissions account. It is found that the errors and omissions account is an important indicator to monitor capital flow, especially the short-term capital, and its fluctuating trend is relatively weak associated with that of RMB rate, on the contrary it is strongly associated with that of GDP growth rate which implies that capital inflow or capital flight is also strongly associated with that of GDP growth rate. As a result, the economic fundamental is the important factor to decide capital inflow or flight on a large scale.