Tag Archives: China

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

Financial repression: China versus India

Financial repression is a term used by economists which means the government taking ordinary people’s savings to achieve some goal, typically to pay for the government itself, by exploiting imperfections in the financial system. It is an indirect form of a much more widespread process, that of governments (or the elites which control them) commanding… Continue Reading

Internationalisation of the RMB: what does that mean?

A phrase that pops up regularly in Chinese financial and economic commentary is the internationalisation of the RMB (renminbi – the people’s currency). What does this actually mean? Internationalisation is not an official or recognised economics term but China uses it to convey what economists would term a move to currency “full convertibility”. What does… Continue Reading

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