China's capital account convertibility and financial stability
Capital account convertibility in China is on the rise. Some see the process as a means of circumventing domestic financial sector inefficiency while others view it as potentially exposing China to financial crises. In considering these different viewpoints, this paper attempts to quantify the impact that opening the capital account will have on the volume of China�s international capital flows. It is found that were China to fully open its capital account, gross non-FDI capital flows are predicted to rise by around 4.6 percent of GDP. While an increase of this magnitude would present a prudential challenge for China�s monetary authorities, it does not appear to be large enough to seriously call into question financial sector stability, either in China or abroad.
Authors: | Laurenceson, James ; Tang, Kam Ki |
---|---|
Institutions: | School of Economics, University of Queensland |
Saved in:
freely available
Saved in favorites
Similar items by person
-
The FDI-Income Growth Nexus: a review of the Chinese experience
Laurenceson, James,
-
China�s Equilibrium Exchange Rate and Trade Balance: A Tale of Apples and Pirates
Laurenceson, James,
-
Share reform and the performance of China�s listed companies
Laurenceson, James,
- More ...