Effectiveness and Effects of China’s Capital Controls
نویسندگان
چکیده
Reductions in barriers to global trade have not been accompanied by a widespread loosening of restrictions on international flows of capital, especially in China. This study shows that China has some of the most restrictive controls and uses them effectively to bias flows of cross border capital heavily in favor of foreign direct investment and limit flows of portfolio and bank assets and liabilities, as well as reduce capital flow volatility. China is now facing pressure to speed up its opening to all forms of cross border capital. But since China is still struggling to strengthen its domestic financial structure, capital account liberalization would expose it to considerable risks and potentially high costs. . ______________________________
منابع مشابه
China's capital flight: Pre- and post-crisis experiences
We study China’s illicit capital flow and document a change in its pattern. Specifically, we observe that China’s capital flight, especially the one measured by trade misinvoicing, exhibits a weakened response in the post-2007 period to the covered interest disparity, which is a theoretical determinant of capital flight. Further analyses indicate that the post-2007 behavior is influenced by qua...
متن کاملCapital Controls and Optimal Chinese Monetary Policy
We examine optimal monetary policy under prevailing Chinese policies – including capital controls, nominal exchange rate targets, and costly sterilization of foreign capital inflows. China’s combination of capital controls and exchange rate pegs disrupts its monetary policy, precluding adjustments that could maintain macroeconomic stability following a set of shocks that mirror its experience d...
متن کاملThe Illusive Quest: Do International Capital Controls Contribute to Currency Stability?
Available online 23 July 2010 We investigate the effectiveness of capital controls in insulating economies from currency crises, focusing in particular on both direct and indirect effects of capital controls and how these relationships may have changed over time in response to global financial liberalization and the greater mobility of international capital. We predict the likelihood of currenc...
متن کاملControls on Capital Inflows: Do they Work?∗
This paper analyzes the effectiveness of controls on capital inflows. In particular, we analyze in great detail the Chilean experience with the use of the unremunerated reserve requirement. We examine the effects of the controls applied in Chile in 1991–98 on interest rates, real exchange rate, and the volume and composition of capital inflows. The effects are elusive and it is difficult to pin...
متن کاملThe Effectiveness of Existential Psychotherapy on Psychological Capital and Affective Control in Cancer Patients Undergoing Chemotherapy
Introduction: In addition to the physical problems caused by the disease and the treatment process, cancer patients also face several psychological and emotional consequences that existential psychotherapy may be effective in this regard. Therefore, the present study aimed to determine the effectiveness of existential psychotherapy on psychological capital and affective control in cancer patien...
متن کامل