This paper begins by documenting a significant challenge for macroeconomic policy-makers in China, namely a spatial dimension that sees considerable asynchronization in business cycle fluctuations across the country’s 31 provinces. This asynchronization points to potential benefits from...

Purchasing Power Parity (PPP) is an appealing theory of the determination of longrun equilibrium exchange rates as it is founded on the intuitive proposition that opportunities for arbitrage will not go unexploited. However, in practice, measuring PPP exchange rates is hindered by difficulties...

Since 2001, foreign investors have been permitted to acquire minority ownership stakes in China�s banks. This paper assesses whether there is any evidence of a cost efficiency payoff in those banks that have taken on foreign investment. Data Envelopment Analysis is first used to generate...

WTO entry in 2001 heralded a new stage in the reform of China’s banking sector. With the reality that foreign banks would be extended national treatment by the end of 2006, China’s banks faced the imperative to reform in earnest. They began reforms from a variety of different starting points...

This paper critically comments on the policy literature surrounding China�s exchange rate regime. It first seeks to expose as myths several popularly raised contentions regarding the dollar peg employed by China, including the belief that the RMB is clearly undervalued and that its value is...

The picture often painted is that foreign capital inflows in China and India are prominently linked to rapid growth at the national level, and contribute to widening income disparities at the provincial/state level. In this paper we revisit Krugman�s (1993) contention that foreign capital...

The path to emerging as the world’s second largest economy (in PPP terms) has not been a smooth one. This paper seeks to provide a detailed chronology of China’s business cycles since 1979. It also considers whether their volatility has changed over time, and how their volatility compares...

China has been widely accused of deliberately maintaining an undervalued currency to fuel its exports. In this paper we argue that one of the most popular measures of equilibrium exchange rates, the Big Mac index, should make way for an Apple index; a theoretically more appealing index where...

The latest round of share reform in China, which began in 2005, sets two related processes in motion: it increases the tradable share proportion and signals the start of a decline in the government-owned share proportion. This paper considers the effect these processes might have on firm...