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The Impact of Financial Services Trade Liberalization on China


  • Li-Gang Liu


This paper shows that financial services trade liberalization in China has set impetus for accelerated domestic financial liberalization. Foreign banks, though still relatively small in size, have already exerted considerable influence on China's capital flows. Empirical findings from a gravity model analysis indicate that financial services trade liberalization under the WTO promotes bank loans to developing economies strongly though not evenly conditional on country characteristics.

Suggested Citation

  • Li-Gang Liu, 2005. "The Impact of Financial Services Trade Liberalization on China," Discussion papers 05024, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:05024

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    10. Subramanian, Arvind & Wei, Shang-Jin, 2007. "The WTO promotes trade, strongly but unevenly," Journal of International Economics, Elsevier, vol. 72(1), pages 151-175, May.
    11. Bank for International Settlements, 2004. "Foreign direct investment in the financial sector of emerging market economies," CGFS Papers, Bank for International Settlements, number 22.
    12. Baker, Terence J. & FitzGerald, John & Honohan, Patrick & FitzGerald, John & Honohan, Patrick, 1996. "Introduction," Book Chapters,in: Baker, Terence J. (ed.), Economic Implications for Ireland of EMU, chapter 1, pages 1-9 Economic and Social Research Institute (ESRI).
    13. Alexei P Kireyev, 2002. "Liberalization of Trade in Financial Services and Financial Sector Stability (Analytical Approach)," IMF Working Papers 02/138, International Monetary Fund.
    14. Douglas Nigh & Kang Rae Cho & Suresh Krishnan, 1986. "The Role of Location-Related Factors in U.S Banking Involvement Abroad: An Empirical Examination," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 17(3), pages 59-72, September.
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    Cited by:

    1. Forssbaeck, Jens & Oxelheim, Lars, 2007. "The transition to market-based monetary policy: What can China learn from the European experience?," Journal of Asian Economics, Elsevier, vol. 18(2), pages 257-283, April.

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