This paper presents the general idea of global-flow-of-funds, and discusses the issues about estimating simultaneous-equations model. Then explore the mirror image of external flow of funds between China and the U.S. The twins-surplus in China's balance of payment, and the risk of having huge foreign reserves are statistically analyzed by three viewpoints: saving-investment, international trade, and an international capital flows. Moreover, this paper proposes some economic policy about the structural adjustment of China's economic development.

References:

David A. Freedman (2005). Statistical Models: Theory and Practice, Cambridge University press.

John C. Dawson (1996). Flow of Funds Analysis: A Handbook for Practitioners, M. E. Sharpe.

N. Zhang (2005). The Global Flow of Funds Analysis in Theory and Application, Mineruvla Inc. (in Japanese)

William H. Greene (2000). Econometric Analysis, Prentice-Hall, Inc., pp.652-710.

Keywords: Global Flow of Funds; Balance of Payment; Financial Crises; Simultaneous-Equations Model

Biography: Dr.Zhang was born in Beijing, China, he is a professor of statistics in Hiroshima Shudo University, he received his Ph.D in Economics from Ritsumeikan University (in Japan) in 1993. His main teaching areas are Statistics, Economic Statistics, and Financial Econometrics. He also has ever worked as visiting scholar in East Asian Institute at Columbia University (2001-2002) and in the Department of Statistics at University of California, Berkeley (2007-2008). His research areas include Global Flow of Funds Analysis, Structural Equation Modeling.