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The Evolving Role of China and India in the Global Financial System

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  • Philip Lane

    ()

  • Sergio Schmukler

    ()

Abstract

Three main features characterize the international financial integration of China and India. First, while only having a small global share of privately-held external assets and liabilities, these countries are large holders of official reserves. Second, their international balance sheets are highly asymmetric: both are “short equity, long debt.†Third, China and India have improved their net external positions over the last decade although neoclassical models would predict them to be net borrowers. We argue that domestic financial policies are key to understanding these patterns and the future role of China in the international financial system. Copyright Springer Science+Business Media, LLC 2007

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Bibliographic Info

Article provided by Springer in its journal Open Economies Review.

Volume (Year): 18 (2007)
Issue (Month): 4 (September)
Pages: 499-520

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Handle: RePEc:kap:openec:v:18:y:2007:i:4:p:499-520

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Web page: http://www.springerlink.com/link.asp?id=100323

Related research

Keywords: Financial integration; Capital flows; China; India; World economy; F02; F30; F31; F32; F33; F36;

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References

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Citations

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Cited by:
  1. Sergio Schmukler & Tatiana Didier, 2013. "The Financing and Growth of Firms in China and India: Evidence from Capital Markets," 2013 Meeting Papers 98, Society for Economic Dynamics.
  2. Luigi Bonatti & Andrea Fracasso, 2009. "The evolution of the Sino-American Co-dependency: modelling a regime switch in a growth setting," Department of Economics Working Papers 0905, Department of Economics, University of Trento, Italia.
  3. Philip R. Lane IIIS, Trinity College Dublin and CEPR, 2009. "Innovation and Financial Globalisation," The Institute for International Integration Studies Discussion Paper Series iiisdp299, IIIS.
  4. Philip R. Lane, 2008. "The Macroeconomics of Financial Integration: A European Perspective," The Institute for International Integration Studies Discussion Paper Series iiisdp265, IIIS.
  5. Bonatti, Luigi & Fracasso, Andrea, 2013. "Regime switches in the Sino-American co-dependency: Growth and structural change in China," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 1-32.

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