China: capital flight or renminbi internationalization?

2021 ◽  
Vol 9 (4) ◽  
pp. 552-574
Author(s):  
Paulo van Noije ◽  
Marina Zucker-Marques ◽  
Marina Zucker-Marques
Keyword(s):  
Detailed Analysis ◽  
Foreign Asset ◽  
Capital Flight ◽  
Chinese Government ◽  
Domestic Economy ◽  
Foreign Reserves ◽  
Stocks And Flows ◽  
International Assets ◽  
Asset Holdings

During 2014–2016, many analysts have claimed the occurrence of a capital flight in China due to the reduction of the country's foreign reserves by over US$800 billion. This paper aims therefore to answer the question: did China really undergo a capital flight in this period? Its methodology includes a detailed analysis of the Chinese external stocks and flows between 2014 and 2016, and an examination of the currency hierarchy and the international usage of the renminbi (RMB). The authors conclude: the fall in the foreign reserves that occurred in China in 2015–2016 was partially due to (i) a strategy of the Chinese government to diversify its international assets; and (ii) Chinese residents (private entities) increasing their foreign-asset holdings. Besides that, there did indeed occur a capital flight in China in 2015–2016, mostly due to a reduction of the non-resident deposits and loans, but these outflows were partially in RMB. Due to that core difference, the effects on the domestic economy are much lower. Furthermore, the RMB outflows may contribute to the internationalization of the RMB.

scholarly journals Income smoothing and foreign asset holdings

2008 ◽  
Vol 34 (1) ◽  
pp. 23-29 ◽  
Author(s):  
Faruk Balli ◽  
Rosmy J. Louis ◽  
Mohammad Osman
Keyword(s):  
Income Smoothing ◽  
Foreign Asset ◽  
Asset Holdings

scholarly journals Exchange Rate Misalignment and Capital Flight from Botswana: A Cointegration Approach with Risk Thresholds

2019 ◽  
Vol 12 (2) ◽  
pp. 101
Author(s):  
Mpho Bosupeng ◽  
Janet Dzator ◽  
Andrew Nadolny
Keyword(s):  
Exchange Rate ◽  
Trade Openness ◽  
Capital Flight ◽  
Foreign Reserves ◽  
Distributed Lag ◽  
Long Run ◽  
Exchange Rate Misalignment ◽  
Capital Outflows ◽  
The Government ◽  
The Impact

This study investigates the impact of exchange rate misalignment on outward capital flight in Botswana over the period 1980–2015. The study uses the autoregressive distributed lag (ARDL) approach to cointegration and the Toda and Yamamoto (1995) approach to Granger causality. Botswana’s currency misalignment was caused by current account imbalances. The most important determinant of capital flight from Botswana is trade openness, which indicates that exportable commodities are misinvoiced leading to net capital outflows. Our main findings show that in the long-run, when the currency is overvalued, the volume of capital flight through trade misinvoicing declines and increasing foreign reserves does not reduce outward capital flight. However, when the currency is undervalued, the volume of capital flight through trade misinvoicing increases and foreign reserves reduce outward capital flight. Investors respond more to prospects of devaluation than to inflation. Botswana should tolerate overvaluation of the pula of only up to 5%. When the pula is overvalued beyond 5%, capital flight increases substantially. The government has to formulate trade regulations and monitor imported and exported commodities. Botswana should also implement capital controls to limit capital smuggling and maintain monetary autonomy.

scholarly journals Does Risk Aversion Matter for Foreign Asset Holdings of Pension Funds – The Case of Poland

2014 ◽  
Vol 17 (2) ◽  
pp. 139-153
Author(s):  
Radosław Kurach ◽  
Daniel Papla
Keyword(s):  
Exchange Rate ◽  
Risk Aversion ◽  
Simulation Study ◽  
Asset Allocation ◽  
Exchange Rate Volatility ◽  
Optimization Procedure ◽  
Pension Funds ◽  
Foreign Asset ◽  
Regulatory Policies ◽  
International Assets

In this study we explore the issue of foreign assets in mandatory pension funds portfolios. First we provide an overview of the regulatory policies regarding international assets and indicate the externalitieswhich may account for the observed differences among the CEE states. Then, taking the perspective of portfolio theory, we run a simulation study to measure the diversification benefits that may be achieved by greater international asset allocation. By applying the specific constraints and exchange rate volatility to our optimization procedure, the study reflects the perspective of the Polish pensioner. However, the findings regarding risk aversion intensity and the discussed directions of further research should be of a universal character.

scholarly journals DETERMINANTS OF CAPITAL FLIGHT IN PAKISTAN

2011 ◽  
Vol 11 (2) ◽  
Author(s):  
Basheer Ahmed
Keyword(s):  
Capital Flight ◽  
Individual Investors ◽  
Foreign Reserves ◽  
Investment Funds ◽  
Long Run ◽  
Political Events ◽  
Short Run ◽  
Political Conditions ◽  
The Relationship ◽  
Practical Implications

Purpose: This study investigates the relationship between Capital Flight (CF) and its Determinants: Foreign Direct Investment (FDI), External Debt (ED), Exchange Rate (ER), Foreign Reserves (FR), Gross Domestic Product (GDP) growth, and Inflation (I). Methodology/Sample: CF from Pakistan is measured through the residual method which is the mostly used method in the literature. This method uses changes in ED, net FDI, Current Account Surplus (CAS) and changes in the FR to calculate the CF for the period of 1971 to 2011. Findings: The results of the study show that there exist relationship between CF and its determinants in the long run whereas no relationship is found in the short run. Practical Implications: CF refers to the condition when money, investment, funds and assets rapidly fly out of country due to economic and political events that discourage and cause individual investors and companies to lose their confidence in the host country and its economic and political conditions.

Prosodic Impairment Associated With Traumatic Brain Injury

2009 ◽  
Vol 19 (3) ◽  
pp. 97-102
Author(s):  
Billy Irwin
Keyword(s):  
Traumatic Brain Injury ◽  
Brain Injury ◽  
Detailed Analysis ◽  
Acoustic Characteristics ◽  
Individual Variations

Abstract Purpose: This article discusses impaired prosody production subsequent to traumatic brain injury (TBI). Prosody may affect naturalness and intelligibility of speech significantly, often for the long term, and TBI may result in a variety of impairments. Method: Intonation, rate, and stress production are discussed in terms of the perceptual, physiological, and acoustic characteristics associated with TBI. Results and Conclusions: All aspects of prosodic production are susceptible to the effects of damage resulting from TBI. There are commonly associated prosodic impairments; however, individual variations in specific aspects of prosody require detailed analysis.

Actual Problems of Economic Policy

2003 ◽  
pp. 23-38 ◽  
Author(s):  
M. Ershov
Keyword(s):  
Economic Growth ◽  
Economic Policy ◽  
Foreign Exchange ◽  
World Economy ◽  
Domestic Economy ◽  
The World ◽  
Exchange Policy ◽  
Effective Integration

At present Russia faces the task of great importance - effective integration into the world economy. The success of this process largely depends on the strength of the domestic economy and stable economic growth. To attain such a goal certain changes in economic approaches are required which imply more active, focused and concerted steps in the monetary, fiscal and foreign exchange policy.

Sanctions of the USA and the Policy of Bank of Russia:double Blow to the National Economy

2014 ◽  
pp. 13-29 ◽  
Author(s):  
S. Glazyev
Keyword(s):  
National Security ◽  
Economic Sanctions ◽  
Capital Flight ◽  
Practical Advice ◽  
The Us ◽  
Monetary Authorities ◽  
The Usa ◽  
Simultaneous Adoption ◽  
The Eu

This article examines fundamental questions of monetary policy in the context of challenges to the national security of Russia in connection with the imposition of economic sanctions by the US and the EU. It is proved that the policy of the Russian monetary authorities, particularly the Central Bank, artificially limiting the money supply in the domestic market and pandering to the export of capital, compounds the effects of economic sanctions and plunges the economy into depression. The article presents practical advice on the transition from external to domestic sources of long-term credit with the simultaneous adoption of measures to prevent capital flight.

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