BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 4/2015:
The internationalization of the RMB, capital market openness, and financial reforms in China
Joshua Aizenman ()
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, one
expects the rapid accelerating of the commercial internationalization of
the CNY. In contrast, there are no clear-cut reasons to rush with the full
CNY financial internationalization: The gains from CNY financial
internationalization are overrated.
Keywords: export led growth; CNY internationalization; mercantilism; financial integration; FDI; (follow links to similar papers)
JEL-Codes: E60; F36; F40; F60; O24; O40; (follow links to similar papers)
27 pages, February 12, 2015
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