IDEAS home Printed from https://ideas.repec.org/a/taf/jocebs/v5y2007i1p1-18.html
   My bibliography  Save this article

Opening China's Capital Account: Modeling the Capital Flow Response

Author

Listed:
  • James Laurenceson
  • Kam Ki Tang

Abstract

Capital account convertibility in China is on the rise. In this paper we consider the impact that removing remaining capital controls might have on the volume of China's international capital flows. Better understanding of this capital flow response can shed light on China's current degree of international financial integration, which has important implications for policy decisions such as whether China should move toward a more flexible exchange rate regime. It is also relevant to discussing the financial stability consequences of removing remaining capital controls. The main finding is that China's capital account is already quite open, thus implying a tradeoff presently exists between exchange rate stability on the one hand and monetary independence on the other. In terms of financial stability, the results generally serve to allay fears that further opening the capital account would compromise China's international payments ability or disrupt global capital flows.

Suggested Citation

  • James Laurenceson & Kam Ki Tang, 2007. "Opening China's Capital Account: Modeling the Capital Flow Response," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 5(1), pages 1-18.
  • Handle: RePEc:taf:jocebs:v:5:y:2007:i:1:p:1-18 DOI: 10.1080/14765280601109196
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/14765280601109196
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lawrence J. Lau & Yingyi Qian & Gerard Roland, 2000. "Reform without Losers: An Interpretation of China's Dual-Track Approach to Transition," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 120-143, February.
    2. Andrea Goldstein, 2002. "The political economy of high-tech industries in developing countries: aerospace in Brazil, Indonesia and South Africa," Cambridge Journal of Economics, Oxford University Press, vol. 26(4), pages 521-538, July.
    3. Nolan, Peter & Zhang, Jin, 2003. "Globalization Challenge for Large Firms from Developing Countries:: China's Oil and Aerospace Industries," European Management Journal, Elsevier, pages 285-299.
    4. Frankenstein John, 1999. "China's Defense Industries: A New Course?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 5(1), pages 1-44, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tahsin Saadi Sedik & Tao Sun, 2012. "Effects of Capital Flow Liberalization; What is the Evidence from Recent Experiences of Emerging Market Economies?," IMF Working Papers 12/275, International Monetary Fund.
    2. Dai, Meixing, 2011. "Motivations and strategies for a real revaluation of the Yuan," MPRA Paper 30440, University Library of Munich, Germany.
    3. James S Laurenceson & Callan Windsor, 2011. "How Effective is China’s Monetary Policy? An assessment of the link between the growth of monetary aggregates and inflation during the 2000s," Discussion Papers Series 435, School of Economics, University of Queensland, Australia.
    4. Pornpen Sodsrichai & Sakkapop Panyanukul & Nantaporn Pongpatthananon, 2011. ""Putting All Eggs in One Basket" Thailand's Under-Investment Abroad: Impact and Explanations," Working Papers 2011-06, Monetary Policy Group, Bank of Thailand.

    More about this item

    Keywords

    JEL C LASSIFICATION : F30; F47;

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • F30 - International Economics - - International Finance - - - General
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jocebs:v:5:y:2007:i:1:p:1-18. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/RCEA20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.