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Ending Financial Repression in China


  • James Dorn


China has the most restricted capital markets in Asia. Constraints on capital freedom have resulted in politicization of investment decisions, corruption, waste of capital, and loss of personal freedom. Ending financial repression in China by liberalizing macro-economic prices and making the Yuan fully convertible would help China become a world-class financial centre. To do so, however, would require widespread privatization and rule of law-both of which would undermine the power of the Chinese Communist Party. The West should be patient with China and recognize that gradual reform and engagement are preferable to destructive protectionism.

Suggested Citation

  • James Dorn, 2006. "Ending Financial Repression in China," Global Economic Review, Taylor & Francis Journals, vol. 35(2), pages 231-238.
  • Handle: RePEc:taf:glecrv:v:35:y:2006:i:2:p:231-238 DOI: 10.1080/12265080600715566

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    References listed on IDEAS

    1. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    2. Kirsten Daniel & W. S. Siebert, 2005. "Does employment protection reduce the demand for unskilled labour?," International Economic Journal, Taylor & Francis Journals, vol. 19(2), pages 197-222.
    3. Balassa, Bela, 1988. "The Lessons of East Asian Development: An Overview," Economic Development and Cultural Change, University of Chicago Press, vol. 36(3), pages 273-290, Supplemen.
    4. Kenneth H Kang & Hong Liang & Henry Ma & Anthony J. Richards & Ajai Chopra & Meral Karasulu, 2001. "From Crisis to Recovery in Korea; Strategy, Achievements, and Lessons," IMF Working Papers 01/154, International Monetary Fund.
    5. Yung Chul Park & Jong-Wha Lee, 2003. "Recovery and Sustainability in East Asia," NBER Chapters,in: Managing Currency Crises in Emerging Markets, pages 275-320 National Bureau of Economic Research, Inc.
    6. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 641-680.
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    Cited by:

    1. James Dorn, 2006. "Comments on H. Genberg: “Exchange-rate arrangements and financial integration in East Asia: on a collision course?â€\x9D," International Economics and Economic Policy, Springer, vol. 3(3), pages 383-386, December.
    2. Dehghan Nejad, Omid, 2011. "The review of financial repression policies and banking system in Iran," MPRA Paper 30924, University Library of Munich, Germany.
    3. Aoife Hanley & Wan-Hsin Liu & Andrea Vaona, 2015. "Credit depth, government intervention and innovation in China: evidence from the provincial data," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 73-98, June.


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