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The People's Republic of China's Financial Policy and Regional Cooperation in the Midst of Global Headwinds




Although growth deceleration in the People’s Republic of China (PRC) is inevitable, if the country’s new direction of financial policy (on exchange rate, capital flows, banking, capital market) can be achieved, it will be good not only for the country but also for the rest of Asia. This is consistent with the increased degree of Asia’s integration and interdependence. But given the nature of financial contagion and spillovers across countries and asset classes, the financial headwinds from global crisis may require regional cooperation in safety nets provision, as the domestic policy in the PRC and other Asian countries is likely insufficient. Equally essential is the cooperation among Asian regulators to secure financial stability and enhance market liquidity. If coordinated well, such cooperation can also strengthen Asia’s collective voice to ensure that harmonization of international rules does not mean applying the same laws in all jurisdictions, and that the global debates on bank-centric regulations do not have adverse consequences on Asian capital markets.

Suggested Citation

  • Azis, Iwan J., 2013. "The People's Republic of China's Financial Policy and Regional Cooperation in the Midst of Global Headwinds," Working Papers on Regional Economic Integration 114, Asian Development Bank.
  • Handle: RePEc:ris:adbrei:0114

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    References listed on IDEAS

    1. E. Kohlscheen & M. P. Taylor, 2008. "International liquidity swaps: is the Chiang Mai Initiative pooling reserves efficiently?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 13(4), pages 323-332.
    2. C. Randall Henning, 2002. "East Asian Financial Cooperation," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa68.
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    More about this item


    PRC financial policy; global headwind; Asia interdependence; regional cooperation; financial regulation;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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