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Financial Market Turmoil: Implications for Monetary Policy Transmission in China

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  • Chengsi Zhang
  • Joel Clovis

Abstract

The recent financial market turmoil has initiated another search for insightful understanding of the interactions between the financial market and monetary policy. This paper explores these interactions in terms of the transmission mechanism of monetary policy in China. We argue that evolving financial development, enhanced by the expansion of the financial market, has altered the conventional channel for monetary transmission in China. Analyzing marked changes in the financial landscape and taking into account policy regime shifts in China, the paper provides clear evidence showing that the financial market has become a new and important channel for transmission of monetary policy in China.

Suggested Citation

  • Chengsi Zhang & Joel Clovis, 2009. "Financial Market Turmoil: Implications for Monetary Policy Transmission in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(3), pages 1-22, May.
    • Handle: RePEc:bla:chinae:v:17:y:2009:i:3:p:1-22
    DOI: 10.1111/j.1749-124X.2009.01147.x
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    Cited by:

    1. Chengsi Zhang, 2013. "Has Chinese economy become more stable?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 18(1), pages 133-148.
    2. Yang-Chao Wang & Jui-Jung Tsai & Qiaoqiao Li, 2017. "Policy Impact on the Chinese Stock Market: From the 1994 Bailout Policies to the 2015 Shanghai-Hong Kong Stock Connect," IJFS, MDPI, vol. 5(1), pages 1-19, January.
    3. Zhan, Shurui & Tang, Yangfei & Li, Shuai & Yao, Yaojun & Zhan, Minghua, 2021. "How does the money market development impact the bank lending channel of emerging Countries? A case from China," The North American Journal of Economics and Finance, Elsevier, vol. 57(C).

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