Global Economy Series no. 14
Management of Cross-Border Capital Flows and Macroeconomic Stability
TWN (ISBN: 978-983-2729-69-3)
2009 No. of pages: 56
has been an economic success story over the last three decades, but
in recent years persistent balance-of-payments surpluses have subjected
the Chinese currency to appreciation pressures and the economy to the
danger of overheating. Among the policy measures the Chinese government
can use, and has used, to address these challenges is the imposition
of capital controls.
This paper examines China’s management
of cross-border capital flows and the role it plays in the stewardship
of the Chinese economy. The author also traces the evolution of the
country’s capital account regime from the 1980s till the present-day
policy, which aims at relieving upward pressure on the currency and
minimizing volatile speculative capital inflows.
China’s experience shows that, notwithstanding
some leakages and loopholes, capital controls are effective if the government
has the will and determination to implement them. Indeed, this paper
contends, the maintenance of capital controls should be a key part of
policy efforts to sustain China’s
remarkable record of rapid and stable growth.
YONGDING is Director-General of the Institute of World Economics
and Politics, Chinese Academy of Social Sciences.
CHINA’S CAPITAL ACCOUNT REGIME
THE CONSOLIDATION OF CHINA’S BANKS
RECENT CAPITAL FLOWS AND EFFECTIVENESS
OF CAPITAL CONTROLS
MACROECONOMIC AND EXCHANGE RATE POLICIES AND CAPITAL CONTROLS
MANAGEMENT OF FOREIGN EXCHANGE RESERVES
THE CHALLENGES AHEAD
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