<i>Financing China Trade and Investment</i> (review)

In this paper, I try to show and emphasise how China has adopted alternative economic policies in the transition and in the evolution of its financial system. In fact, the ‘step by step’ or ‘gradualism’ approach followed is in contrast to the fashionable idea that indiscriminately prescribes market-oriented financial system architecture to emerging and transition economies, and is, I believe, more close to the financial policies recommended by Post-Keynesians. A preliminary version of this paper entitled (2008) was presented at the 10th Post Keynesian Conference on ‘Economic Policy’, University of Missouri, 1–2 July, Kansas City, USA, 2008, Centre for Full Employment and Price Stability (CFEPS), thanks to all the research participants for useful comments and suggestions.

The integration of China into the world economy has done its part to increase global imbalances. Relying on export-led growth, the country's quasifixed exchange rate against the US dollar has led to much debate. While a lot of discussion focussed on the question of sustainability, few paid attention to the consequences of the Chinese strategy for the US financial market. After explaining in detail China's policy of sterilization of capital inflows we turn to the US financial market and revisit the consequences of the additional Chinese demand for US assets. We find that the bubbles in the real estate and stock markets have indirectly been fuelled by Chinese hunger for US government debt. Therefore, the Chinese growth strategy is the demand side explanation of the financial crisis, explaining why the supply of toxic assets by US financial institutions found its buyers.

International Review of Economics & Finance, 2010

Recent development in China's financial markets: An introduction☆ Since adopting reformist and open-door policy thirty years ago, Chinese economy has experienced tremendous growth particularly in the most recent decades. Along the path, we witness the development and structural changes in China's financial market. This special issue contains five articles spanning from macroeconomic to microeconomic topics related to China's financial markets. Specifically, what was the relationship between China's economic growth and financial development? How had soft budget constraints affected Chinese firms' investment decisions? What determined Chinese companies' R&D intensity? How did Chinese financial market interact with world financial system? What was the behavior of China's IPO market?

China Economic Review, 2006

Data on physical capital are an indispensable part of economic growth and efficiency studies. In the case of China, fixed asset time series are usually derived either by aggregating gross fixed capital formation data ove r time, net of depreciation, or by correcting the limited official fixed asset data available. These procedures, to varying degrees, ignore that (i) gross fixed capital formation does not equal investment, (ii) investment does not equal the value of fixed assets newly created through investment, (iii) depreciation is an accounting measure that has no impact on changes in the production capacity of fixed assets, (iv) official fixed asset data, where available, incorporate significant revaluations in the 1990s, and (v) the variable "net fixed assets," frequently used in the literature, is an inappropriate measure of fixed assets for the purpose of growth or efficiency studies. This paper derives economy-wide fixed asset values for 1954-2002, correcting for these shortcomings. It also uses the so far unexplored method of combining economy-wide depreciation data (in the income approach to the calculation of gross domestic product) with an economy-wide depreciation rate to directly yield economy-wide fixed assets. The fixed asset time series derived here are contrasted with each other as well as with those presented in the literature. The reliability of the different series is evaluated, leading to the recommendation of a specific choice of fixed asset time series.

International Journal of Economic Policy in Emerging Economies, 2012

In this paper, I try to show and emphasise how China has adopted alternative economic policies in the transition and in the evolution of its financial system. In fact, the 'step by step' or 'gradualism' approach followed is in contrast to the fashionable idea that indiscriminately prescribes market-oriented financial system architecture to emerging and transition economies, and is, I believe, more close to the financial policies recommended by Post-Keynesians.

1998

2012

Princeton University Press eBooks, 2020

The Chinese economy has undergone three major phases: the 1978-97 period marked as the SOE-led economy, the 1998-2015 phase as the investment-driven economy, and the new normal economy since 2016. All three economies have been shaped by the government financial policies, defined as a set of credit policy, monetary policy, and regulatory policy. We analyze the macroeconomic effects of these financial policies throughout the three phases and provide the stylized facts to substantiate our analysis. The stylized facts differ qualitatively across different phases or economies. We argue that the impacts of China's financial policies work through transmission channels different from those in developed economies and that a regime switch from one economy to another was driven mainly by regime changes in financial policies.

Journal of East Asian Economic Integration, 2006