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

17 Pages Posted: 20 Aug 2015

See all articles by Joshua Aizenman

Joshua Aizenman

University of Southern California - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: August 2015

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.

Suggested Citation

Aizenman, Joshua, Internationalization of the RMB, Capital Market Openness and Financial Reforms in China (August 2015). Pacific Economic Review, Vol. 20, Issue 3, pp. 444-460, 2015. Available at SSRN: https://ssrn.com/abstract=2647756 or http://dx.doi.org/10.1111/1468-0106.12116

Joshua Aizenman (Contact Author)

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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