Internationalization of the RMB, Capital Market Openness and Financial Reforms in China

Joshua Aizenman

Research output: Contribution to journalArticlepeer-review

13 Scopus citations

Abstract

This paper provides an overview of Chinese financial and trade integration in recent decades, and the challenges facing China in the coming years. China had been a prime example of export-led growth, benefiting from learning by doing, and by adopting foreign know-how, supported by a complex industrial policy. While the resultant growth has been spectacular, it comes with hidden but growing costs and distortions. The Chinese export-led growth path has been challenged by its own success, and the global financial crisis forced China toward rebalancing, which is a work in progress. Reflecting on the internationalization of the CNY, rapid acceleration of the commercial internationalization of the CNY is expected. In contrast, there are no clear-cut reasons to rush with the full CNY financial internationalization: the gains from CNY financial internationalization are overrated. Copyright

Original languageEnglish
Pages (from-to)444-460
Number of pages17
JournalPacific Economic Review
Volume20
Issue number3
DOIs
StatePublished - 1 Aug 2015
Externally publishedYes

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