Tag Archives: China

Could China’s population halve by the end of the century?

Demography, the study of population, is one of the few areas of the social sciences where long term predictions (over one or more decades) can have some value. This is because the dynamics of population growth depend on the current age structure (how many young versus old people), which is fixed in the short term,… Continue Reading

What has the world economy ever done for us? – EMBA elective reading 2 (*)

A lot of people in the richer economies appear doubtful that economic globalisation has been good for them. But there are hundreds of millions in the rest of the world for whom globalisation has been a critical part of their escape from poverty. * Globalisation means the greater international movement of goods and services, finance,… Continue Reading

What’s the future for peer-to-peer lending?

P2P (peer-to-peer) lending is the biggest and most developed form of alternative finance. But does it have any enduring value to add in the financial system? * P2P lending platforms have sprung up in many countries since the global financial crisis, particularly in China, where they are now in crisis. According to research from the Cambridge… Continue Reading

The accidental trillionaire

China’s $3.9 trillion foreign exchange reserves were not planned but arose as a side effect of a strategy, now ended, of keeping the RMB exchange rate lower than the market would have set it. * Last week I visited the home of China’s SAFE – the State Administration of Foreign Exchange. SAFE’s reserve management division… Continue Reading

Liberalising the Chinese banking system: necessary but dangerous

I recently gave a presentation to the Cambridge China Business Network, a student club. The title is “Like dismantling a nuclear bomb: liberalising the Chinese financial system”. The slides are shown below. Summary Liberalisation of a market means removing most or all regulatory and legal restrictions on market forces. Most countries that have liberalised their financial… Continue Reading

The international impact of abolishing China’s capital controls

Perhaps a little lost in the Christmas shopping rush was an interesting article in the 2013 Q4 Bank of England Quarterly Bulletin about what might happen when China finally abolishes all controls on its international capital flows, consistent with its stated policy goals. China has already had a very large impact on the international financial… Continue Reading

Chinese investment – too much of a good thing?

A key feature of macroeconomic analysis is the relationship between a country’s savings and investment rates. Savings represent income that is not consumed. Investment means spending on assets that will last for some period of time, such as factories, houses, cars and infrastructure. Savings are resources – you cannot invest if you don’t set aside… Continue Reading

China’s balance of payments: current and capital accounts now pulling in different directions

Every country’s economic relations with the rest of the world are summarised in the balance of payments. This is divided into the current account, which records the flows of trade and income, and the capital account, which records the flows of financial assets and liabilities. Usually countries have a deficit on one and a surplus… Continue Reading

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