The globalization of China's financial sector: Policies, consequences and lessons

Laurenceson, James (2005). The globalization of China's financial sector: Policies, consequences and lessons. In Clem Tisdell (Ed.), Globalisation and world economic policies : effects and policy responses of nations and their groupings (pp. 1-27) New Delhi, India: Serials Publications.

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Author Laurenceson, James
Title of chapter The globalization of China's financial sector: Policies, consequences and lessons
Title of book Globalisation and world economic policies : effects and policy responses of nations and their groupings
Place of Publication New Delhi, India
Publisher Serials Publications
Publication Year 2005
Sub-type Research book chapter (original research)
ISBN 9788186771815
Editor Clem Tisdell
Start page 1
End page 27
Total pages 27
Total chapters 9
Language eng
Subjects 340206 International Economics and International Finance
340213 Economic Development and Growth
Abstract/Summary The variety of country experiences with financial sector globalization has precipitated the emergence of a large literature discussing policies, consequences and lessons learned. China's policies and performance makes an important contribution to this discussion. In contrast to many of its neighbours, China maintains a relatively detailed system of capital controls. During the Asian financial crisis that sent most countries in the region into negative rates of growth, China continued to expand rapidly despite having a financial system that by most objective measures was the worst in Asia. This apparent contradiction has led many researchers to argue that an explanation must lie in China's usage of capital controls. This paper first reviews the policies that China has undertaken toward the globalization of its financial sector. The consequences of these policies are then summarised and policy implications are drawn for other countries embarking upon the path of financial sector globalization. It is emphasized that while China makes extensive use of capital controls, many have readily been circumvented resulting in considerable de-facto external financial liberalization. Therefore, the claim that capital controls are the reason behind China's impressive growth performance should not be over-stated.
Keyword China
financial sector
Asian financial crisis
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Created: Fri, 10 Sep 2004, 10:00:00 EST by James Laurenceson on behalf of Faculty of Business, Economics & Law