5.1-how effective are china's capital controls

8/7/2019 5.1-How Effective Are China's Capital Controls

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267

How effective are Chinas capital controls?

14

How eective are Chinascapital controls?

Guonan Ma and Robert N. McCauley

cptng ntptatn t ntatn t ntay py an

t gn xang at n cna tn a nt auptn

gang t tvn apta nt. At n n t ptu

t vw tat apta nt y at t apta fw wtut

atng t agntu. in t vw, t avy anag nnbxang

at p tat cna pt t ntay py an a nt v a

t-t ntt at. At t t n t vw tat apta nt a

t bnng nug t aw t cn gvnnt t t t-t ntt

at, pt t t fxbty t xang at. T ntat btwn

t vw apn n t ntxt gwng -b fw un t

unt an apta aunt n t pat 10 ya a w a t aatgn v auuatn n 2005.

dnt vw n t status quo a n t ntptatn ut

utu baatn apta fw. Agan, at n xt, t wu

unvny w tanatn t an tby at t x -b

apta fw, but wtut nay atng t tta vu. in t

ntptatn, apta aunt baatn gt b ntt t pat n

ntnatna nan, but nt t t w w t cn any. Att t xt, apta aunt baatn wu nfun t a an

ptn apta fw an utaty a btwn xang

at anagnt an an npnnt ntay py.


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ChinaLinking Markets for Growth

T apt xan p vn t tn w tv cna

apta nt av bn n t pat an w tv ty an. W u

n t anay p vn bau t pv t t tng vn

n t qutn ( a un t fw vn, ma an mcauy

tng). ou ba nun tat utan ntt at nta

an tat cn apta nt av ntnu t bn. T bv

nta annt, n u vw, b aunt pauby by quty

t at. evn t nawng t nta n t unpggng

t nnbn Juy 2005 av t at ubtanta v. i apta nt

t bt, utu baatn y t p nntay n t

aat a tng baan xang at an nana an ntay

tabty bjtv.

W n ntay autny nawy n t t gvnnt abty

t t t-t t ntt at. su a ntn u b apppat

t any nuta unt w ntay py a nn t t

ttng a t-t ntt at. in at, cna ntay py py a

w vaty t ntunt, nung antatv nt pt

an nu nng at a w a quanttatv au u a v

qunt, nng quta, wnw guan an ttn n nvtnt.

su au u gv cna ntay py t anuv vn

t t-t ntt at w tgty ntan by t xang at

py. Tu, a nng tat t-t ntt at a nt tgty ntan

p a ortiorintay npnn n t ba n, w

vant n t a cna.

Growing cross-border fows in China

cna apta nt g a tw ptant atu. Ft, apta nt

tn t b tgt -b fw tugt t b vat tan tab fw. sn, t guaty g v t a t

n ba agant utfw twa n anagng tw-way -b

apta fw n a baan an. rat t t att t tnny

pya t ytay an agant t wn n t n tat nt

au n utfw a tngtn t t patn pu n

t xang at an v va. W u a naty nt g

u pat any anay, tngnt nt au v t-t

fw t t pvang at pu wu ggt t-t nttat a a uu au t ay apta nt.

on at ntnng t ay apta nt t z xtna

fw. dpt ntnu apta nt, t pat tw a av wtn


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a ap n cna -b fw n t unt an apta aunt.

A a a g t put (GdP), cna g -b fw

tan quntup t tan 120 p nt n 2005, tan 20 p

nt n 1982 (Fgu 14.1), wt a ntab aatn n t 1990. A,

ntwttanng t aab xpann t g unt aunt fw,

cna apta aunt fw av bn ganng atv ptan.1 in 2005,

g apta aunt fw pnt n-t cna tta g -

b fw, pa wt jut 13 p nt n 1982 an 25 p nt n 1990.2

T bap gwng -b fw uggt tat t cn

ny a b nangy pn an ntgat nt t gba ny

an tu pn t nfun gba at tan b. in

patua, ag xtna fw pnt t pptunt t av an va

apta nt. T n tun a qutn abut t ay apta

nt, wt patn ntay autny, nana tabty an utu

apta aunt baatn.

Fgu 14.1 Chinas gross cross-border fows,a 1982, 1990 and 2005 (p

nt GdP)

0

20

40

60

80

100

120

1982 1990 2005

percent

Gross capital account flows

Gross current account flows

a dn a t u bt an t fw n cna baan paynt, xung nt

an n.

Source: ceic data cpany.

Percen

tofGDP


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Gwng ta an nana pnn, wv, nt uppt an

at nun abut t ay apta nt. in patua, vn

ag an gy pnv -b fw u t wtut guttng apta

nt, jut a a an tab fw n nt py tv nt. A

t an tngnt tt apta nt tvn wt ubtanta

-b abtag pptunt pt a nab p. su a

ttba nt n fw but n n an pan a nat

w t tvn a va v t. Wn p an fw au

a ntnt wt a t, n an av at an ay nun gang

apta bty; but wn ty pnt n nt tn, p vn

u b gvn wgt. in a patu t xtng tatu, w

xan ny t p au n gaugng t apta bty.

Price test o capital mobility: onshore and oshore renminbi

yields

T bnatn n nnbntt at, Us a at an

nn-vab wa (NdF) xang at anay nxt, t tt apta

bty btwn cna an t nana at. T nu ypt

tat t a n ubtanta n btwn nnbntt at n,

n t n an, an t p by t NdF n njuntn wt Us

a lb, n t t.3 T tgy tatng u n

nnby gap ba n ma t a. (2004), a ta n t Appnx.

T a tat ag an ptnt n y gap uggt

gnant -b at gntatn an tu bnng apta nt;

but ana a gap nt nay py ntvn apta

nt. W ntpt t vn a upptng t atnatv ypt

t bng an nay ubtanta gap btwn n an

nnby. Aptan t ypt avu t vw tat apta

nt n cna av a an ubtantay bnng.

maung n an nnb y nta

epay n t a atvy -vp ny an gn xang

at, ntunt ut b n auy t p t tt. ca ut

b x n t nn atuty, quty an t. iay, n

want t pa ntunt nta atuty, njyng t a quty,

w a u by t a pvat pat, uuay ban. An apppatpan wu b btwn t y n ag Us a tat

pt n Nw Y vu y n Us a pt pt n lnn by

t tp-at ban tat pt t t Bt Ban Aatn (BBA). su


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a pan tn ba n t t-nt atuty tat pntatv

t an y. T ban nvv n t pan a qut

a n t ub-A t tanng.

Liquidity considerations. in t a cna, t ang a n pat

gttng a anab at btwn a pntatv nnb

ny at y, n t n an, an t NdF at, n t t. in

patua, t ntban nnbny at ta wt gatt quty

at vy t atutvngt t vn ayw t NdF at ta

wt gatt quty at ng tn t nt t n ya.

T apt pv n t pvu tat n

nnby gap n t nn quty (ma t a. 2004). T att

ta t abv natn an t pa t t-nt

cna ntban at (chiBor) y t t t-nt NdF.4 T

pan tt t a atvy ng an qu atuty n t t

ny at, n n an, an t a atvy t atuty n t

at, n t t. h, w upat t a au a w a

pnt t a anay wt a nw pan ba n a nt

pa ntunt. in patua, w a pa t wy autn at

PBc n-ya b avaab n 2004 wt t n-ya NdF. T

pa qu ntunt n bt at, atug t ntu pb

t n btwn t vgn b an t ban NdF pt( bw).

lquty a t tw at at w at t n-ya tn. T

PBc u 1.2 tn nnb(abut Us$150 bn) t n-ya b n

2005 ut a tta b uan 2.8 tn nnb, an avag wy

uan abut Us$3 bn quvant.5 F Januay t ma 2006,

uan ang btwn 40 an 120 bn nnb a w. in t NdF

at, t n-ya atuty pty t t ta atuty (ma t

a. 2004; db t a. 2006).T qu t ntunt tat a u abtag n an

y, t tng a bv a y n. on an

tn an abtag tunn n w ut abtag tanatn a nt

ptab, gvn b-a pa an any tnny fw t v

t at. T upt tat a nng tat apta nt a ntv u

w b ntnt wt bv y gap , ay, 25 ba pnt .

Credit considerations. Wt ga t t, pang vgn an ban

y n n an ntunt, ptvy, pbatn pnp, but n pat t nt w t pan ubtantay.

ct aut wap uggt tat t t tanng cna attat an

nuan paynt ny a anu ba pnt tan tat t aj


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ntnatna ban tat t Us a lb pan ( Tab A14.2). sn

nnbat w w tan t n PBc b y n t p

200406, t xng vgn an ban t wn t tat

y gap t p, tu avung t nng tat apta nt a

tv. But a w w bw, t a t tat y n

100 t 400 ba pnt wa t v ba pnt t n.

Wt u a pan chiBor an y, t n

tn t u t abut vau t bv y nta v u

t ap p. F 1999 t 2001, gy at ban ang

un ntnatna aw pa g (p) y tan t cn

ban ang n. Tang nt aunt t t n wu ny

av wn t gap.

An example o cross-border arbitrage on renminbiinterest rates. B

xanng t ata, t gt b uu t n a patua xap

an abtag tanatn at t n-ya tn by a utnatna wt a

ptab patn n cna. sn sptb 2003, t puatv

an t b ng n nnba gvn t tau u a a tng

nntv t, n t, nnbn an t wa

(tat , nng nnbn an bwng t ). on way

ntutng u a ptn t aat n cna nt t nvt nnb

nt a n t t a vn t t pant ut cna. inta, t

un a tan n nnban nvt n t cn ny at. T

y n t n-ya pt px by t PBc b at (n an tn

a ban tang t un n tut an nvtng n t PBc b). Tu, nnb

un av bn nt n.

sutanuy, t aat bw a at n-ya lb, pang

t a fw t unpa vn cna, an nnb n ya

wa agant Us a, ay, t a g un. T bnatn abwng an wa ptn aunt t bwng nnb

an nvtng t p nt a, an t at ntt pa (by

ntutn) t atvy w NdF-p nnby. At t ya n,

t nnbnvt n an b a at t tn-pvang

pt xang at, w a u t tn any pt n t

NdF, avng t wt t abtag gan btwn t ntt at n t

cn ny at an t w y. Tu, by aggng a unt

a payntnay, t pt patatnt a n t aqua ng nnbptn an n a gan by ng t .

on t uu atu t xap tat t w tat abtag

btwn t n ny at an t wa at


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nt t t ban. o u, nt a gn patng n cna a

ptab; av nt jnt vntu tat ntan u abtag an

nt a wu b wng t na t baan t n cna. Nvt,

u pat pptunt a tng bau tw a au t qua

ntt at u b tan t b y a ypt t nny

cn ban. inta, t pt pptunt pnt tv t gba

pan, w an b pu t bng t cna nt tauy

patn an n t bnt avng pat wtn an aun apta

nt n t n.

on nnby nta ba n t-ntchiBor

ou a anay pa a t ntt att -a t-

nt chiBorwt t nnb at p by t-nt

NdF an a lb. W un nay vy gnant n.

Fgu 14.2 pa t t-nt y gap t nnbwt Aan

p t p 19992001 an 200204. T abut vau t gap

btwn nnby n an avag 250300 ba pnt

n t v ya t ay 2004. T pa cna n t u ap

an n vy w pa wt t n nta 50100 ba pnt t kan wnn t a p, an a gap 2030

ba pnt bv t Japan ynb apta nt w t

n t ay 1980 (otan an Twa 1981). T nawng t nta

n 200204 wa n at vnt n t a cna tan t t

t Aan un.

An upat tat t y gap 19992006 va an vn bgg

avag gap 310 ba pnt n abut vau an a uggt va

tnt pa at ntn (Fgu 14.3). in gna, nt bn,n wu xpt at t b abv n at wn at

patpant a ptnng nnbwan an t nt tn

fw un utwa. cnvy, at wu a bw n

at wn ptnng avu nnbtngt an un a ng t

nt cna.

in t p t eat Aan nana tug unt ay

2001, t wgt ptnng wa n t tn a wanng

nnb, utng n g y . Tn w a p an ung 200102, w aw at bw t n, but

wt a gap tan 150 ba pnt. T p atu baan

ptnng n t nnb. Wt t ntnatn pub pu


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Fgue14.2Averageabsoluteons

horeoffshoreyieldspreads,19992001and20

022004(nbapont)

0100

200

300

400

500

600

PH

IN

ID

CN

TW

KR

Jan1999Dec2001

Jan2002Feb2004

0100

200

300

400

500

600

700

800

PH

IN

ID

CN

TW

KR

Jan1999Dec2001

Jan2002Feb2004

Notes:PhP

lppne,iNina,idinone

a,cNcna,TWTawan(cna),krkoea.

Source:ma,G.,ho,c.anmcauley,r.N.,2004.Teaetfonon-e

lveablefowanAanuene,BisQuatelyrevew

,June:8194.

Aveageabolutepea

stanaeva

tonofteabolutepe

a


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tang patn n cna xang at py n sptb 2003, wv,

y pp ubtantay bw t n untpat. T

wgt ptnng wa n t tn a tngtnng nnb.

A cn pan nvt a ng bwng nt nnb,

v gwt aat, a xng t pa tat u b xpan by

t unt aunt upu an t nvtnt nfw. T avag y

gap wn t tan 360 ba pnt Januay 2003 t Ap 2006. T

gap a a pa 800 ba pnt n 2005, wn t p

y w bw z.6 sn t Juy 2005 py ang, wv, t y

gap a naw ayt tan 200 ba pnt.

T pnpa ag ba n u pvu an upat tat

t-nt tn t chiBor an nnbNdF tat t n

gap n t nnby a bn ptnty ubtanta n abut

t an t gn a bn ntnt wt pvang at pu. in

t w, tt, cna apta nt av pvnt unt -

b abtag t qua n an t-t y.

Fgu 14.3 The onshore less oshore renminbi yields, based on three-

month CHIBOR, 19982006 (n ba pnt)

-1,200

-1,000

-800

-600

-400

-200

0

200

400

600

800

1,000

D

ec-98

Apr-99

A

ug-99

D

ec-99

Apr-00

A

ug-00

D

ec-00

Apr-01

A

ug-01

D

ec-01

Apr-02

A

ug-02

D

ec-02

Apr-03

A

ug-03

D

ec-03

Apr-04

A

ug-04

D

ec-04

Apr-05

A

ug-05

D

ec-05

Apr-06

Basispoints

3m spread

Note: on y.

Sources: Bbg; PBc; aut wn tat.


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wat gt b t an pptunt py unv ntt paty.

Tu, n t nt b an at Juy 2005, cn autt wn

t nnba ntt gap by ung t n-ya PBc b at tug

py at ut agant t bap ng Us py at. T pn up

a 34 p nt gap btwn Us a an nnby.

Tn at Juy 2005, t cn autt ap xptatn a 34

p nt annua appatn tug tatnt an t atua pa t

pt aw. in, at xptatn t av bn aaby

w ntan ung t tantn (ma an mcauy tng). T

ntny u xang at xptatn an t annbntt

at nta v t p n an nnbat nt t

a ut n. ou ntptatn uggt tat t PBc de acto bav a

tug ntt at paty w an patng tagt n ttng ntt at

an t p t aw, tby pby wng t nnt n t

g tantn. T appa u an n t nab apta

nt t n pa, abt t xtnt at t t yng n t

nn-ntt at ntunt ntay py.

Fgu 14.4 Onshore less oshore NDF-implied yields, 20042007 (n

ba pnt)

-100

0

100200

300

400

500

600

700

800

900

1000

Apr-04

Jun-04

Aug-04

Oct-04

Dec-04

Feb-05

Apr-05

Jun-05

Aug-05

Oct-05

Dec-05

Feb-06

Apr-06

Jun-06

Aug-06

Oct-06

Dec-06

Feb-07

Apr-07

Basispoints

12m yield gap 3m yield gap

Note: wy ata; 12-nt (t-nt) NdF, n-ya PBc b y (t-ntchiBor) an 12-nt (t-nt) lb.

Sources: Pp Ban cna; Bbg; Ban intnatna sttnt tat.


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T w a tpay pptunt t va t apta nt tat

a bau t ag btwn at vpnt an t atuatn

apta nt. in patua, t vpnt n 2006 an n wa

at gt av a a nw ann nfw tat p t naw t

n nta. An n nnbwa at wa t

ntu n at 2005.7 T n wa at aw pay wt

a pn n bt t n an at t ngag n abtag.

in patua, u pay u buy nnbwa n t n at

(at atvy g p ntt at) an utanuy nnb

wa n t at (at atvy w p ntt at). mu

bwng nnb an pang nnbn, u tanatn

wu tn t a t ntt at twa t ntt at

v, bngng t n an wa uv t a t

tan tw. su tanatn w appanty a pb by a auna

n t n punta guatn nt gn uny ptn ban,

w t t n nt pt but nt wa ptn. in t, t vpnt

t n wa at at a tpay ann abtag,

tug nt n w nug t a at t t v.

ou nuan ntptatn uppt by vpnt n ay 2007,

wn t n nnby gap tat wnng agan t

tan 300 ba pnt, puttng apta nt t a tng tt. in u

vw, t att wnng a t wt t ugnt ay apta

nt tan wt a pata va t abv at. in pn t t

nfw at t abtag btwn t an gng n wa

at, cn autt av, n t t quat 2006, tgtn

t u. mau tan av nu an xpt pbtn n

nttutn patpatng n t NdF at, an nun

wa ptn n t nw punta guatn nt ban gn uny

ptn an a ap utn n t de acto ng n cn nt

bngng a n.8 mv, n 2006, t aat pa

pt appatn an t ag ta upu av ntn

at xptatn utu appatn, ng t p y

t tun t z vn nt ngatv tty. sn t n-ya PBc b y

bun a w 1.5 p nt abut 2005 t 2.8 p nt by at

2006, t n y gap wn ut.

in tta, t w n btwn n an nnb

ntt at pnt t t ay apta nt. mt nty, t cn

autt gu t ntt at an xptatn appatn

nt ba ntny wt ng Us a ntt at t u t

nnt n t nta xang at g t. T utng n pntag


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in patua, cung t a. (2003) pt a tattay gnant wnwa

tn n t ntt at nta n t ap p Januay 1996 t

may 2002.9 engn ntptatn wan, wv, n t ut

pn n ata t ay t 1990. ra tat cna xpn a

but aty g nfatnang 20 p ntn 199495, tggng

a anan tgtnng by t autt. T n-nt cn ntban

at an at ub-gt v n 199597 an an at 68 p nt

tugut 1998. ony at t eat Aan nana a v ap

fatnay t t cn ny tug t appatn t

tv xang at t nnb cn pya ut ntt

at paty.

W tt t wng t ypt: tat t Us annbntt

at nta (n abut t) gnanty nt z; tat t

nta a wn a nng tn; tat t avag nta t tn

ang ung t ap p. ou tt a ba n t t au

ntt at n Fgu 14.6 Juy 1997 an Juy 2005 an aw pb

atu ba wtn t ap p. Tab 14.1 pt t tt ut,

nng t vw tat cna apta nt an tv.

Fgu 14.5 Domestic renminbi yields less US dollar yields, 19972005

(n ba pnt)

-500

-400

-300

-200

-100

0

100

200

300

400

500

600

J

un-97

D

ec-97

J

un-98

D

ec-98

J

un-99

D

ec-99

J

un-00

D

ec-00

J

un-01

D

ec-01

J

un-02

D

ec-02

J

un-03

D

ec-03

J

un-04

D

ec-04

J

un-05

D

ec-05

Basispoints

3m Chinese repo less US Treasury

PBC base lending rate less US Federal fund rate

3m CHIBOR less US$ Libor



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Ft, t w ap p 1997 t 2005, ubap, t

abut vau t annbnna ntt at nta

gnanty z a t ntt at au. sny, tug

t appa t nt ap p tat t nta wa tnng

wnwa, t ypt a nng tn n t annbntt

at nta jt wtn t ubap.

Fnay, wn t ata a aw t tn t t y t pnt, t

tt jt t nu ypt n ba. in patua, nutn nt a

ba n t ngbu 2001ugy t pnt t ap

p. Gvn t ba, t abut z t ntt at nta

btwn t nnban t Us a a naw t n a

t ap tan t t a, but an ubtanta tattay. A nt,

wv, t tt vn a nng tn wtn t ubap,

an n w n t wng gn t tat tn nt n a

a.

T nt vn n Tab 14.1 n t ypt gnant

nnbUs a ntt at nta. T a tng tatnt tat,

n avag, cna apta nt av bn tv n antanng a wg

btwn ntt at n t Us a an nnb, pt t de acto a

pg t nnb. ou tatta tt nt uppt t ypt a

nng tn n t ntt at nta, n a ba n t ap

aw. in patua, ung 200105, wn cna pn t patpatn

n t gba ny naby an nt w gnay ax, t

tat tn nvgn t-t ntt at a t wng gn n

a t a. i nana ntgatn ntt at nvgn

gvn xang at tabty, t a t aunt t a nvgn

n nt ya.

Tu, t tnt ntt at y n cna an t Unt stat

uppt t a tat cna apta nt av bun unty t pv

pya g t-t ntay autny un a de acto

a pg.10 W ntpt t bv nvgn py at n t 1990

a wng t nfatn nvgn tan t wa apta nt. rat

tan appntan, t nfatn an ntt at nvgn n 19962000

an b n a ftng t a pg pvn a uu u-t

ntay an tug p ta g.11 Wat att t pnt

anay, wv, tat, n t ntxt w nfatn n bt unt,

apta nt av ptt cn ntt at t vg t

t Fa rv, ntwttanng t xang at nag.


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Tab 14.3 Interbank rate dierentials: renminbiUS dollar and euro

US dollar (bp)

on-w T-nt

chiBor eub chiBor eub

lb lb lb lb

Avag abut n 160.47 143.45 166.64 144.56

maxu nta 173.36 190.04 213.16 166.81

mnu nta 429.58 281.50 439.01 284.07

stana vatn 181.39 156.60 194.88 157.37

catn nt 0.32 0.58 0.21 0.60

Note: T ntban at at a chiBor t nnb, lb t Us aan eub t u; nty ata Januay 1999 t ma 2006.


m tngy, t p un natn, eub an lb xbt

gat ptv -vnt tan t chiBor an lb. T ut

a w a pt ap. Tu, t vn ntban aty uggt tat cnawt a x xang at an ntnu apta

nt nt pt t ntt at py t Unt stat t any

gat xtnt tan t u aa. T bvatn ntnt wt t vw

tat apta nt n cna an bnng.

Conclusion

T anay n t apt n tat cna apta nt an

ubtantay bnng. Ty pvnt t quaatn n nnby an t p by NdF. W a n tat t bv

nvgn t-t ntt at btwn cna an t Unt stat

wa aatt t t at 1990 tan t ya n. Wt t

anng apta nt, cna t-t ntt at ttng

pt t Unt stat tan t tat hng kng (a a a pn

ny wt a a a pg) tat t u aa (a a ag ny

wt a fxb xang at).

T pata nvgn n an nnby ung 2005 an at 2006 ntpt a ftng t autt t

at a tug ty w bun by ntt at paty. Tat , n t tantn

t pgg g, t cn autt un t nvnnt t ta


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t bun t apta nt by gnang a at appatn agant

t a tat wa bay ntnt wt t Us annb ntt

at nta. W a gn an nt unntn an tpay

axatn apta nt utng nana at vpnt

gttng aa t nt. T att n gap av, wv,

wn an an ag; an t appa tat t autt a agan ttng

t tvn apta nt.

ov t, nana at vpnt an ut nng nt

u pav t way pa ntgatn cna nt t gba at,

an w n t ptan t anng nt. Nvt,

u nng bnng apta nt n cna u a p gt n

w pya n cna w pa t unty ntnung apta aunt

baatn. ou anay uggt tat t gang baatn

w at tan t nfw.

Nt

1 lan an m-Fantt (2006) n tat cna t ntnatna at an abt

a bay pt pa wt t gba t, n ntat wt cna gwng a gba

GdP an ntnatna ta. Ty pa at/abty t wt GdP fw, w w

pa tw typ ntnatna fw. on u au, cna nana ntgatn

utpang t ta ntgatn.

2 G apta aunt fw a y untat atv t g unt aunt fw

bau apta fw ta t unt aunt tanatn n t av

a ttn ( bw). A, t pt ban-at g fw pnt

ang btwn tw at an nt aptu any ntvnng g fw.

3 F at tatu n apta bty an nt, Fan (1992) an otan an Twa

(1981). capta nt a a u n t ntxt baatn qun (Fan

2004; Paa t a. 2005) an nana ntagn (kawa an Taag 2001). An vvw t

Aan NdF at an b un n ma t a. (2004) an db t a. (2006). T y nt-ban

ntt at u n t apt a lnn nt-ban at (lb) t Us a,t cn nt-ban at (chiBor) t nnb an hng kng nt-ban

at (hb) t hng kng a.

4 T PBc ntu a nw t bna ntban ny at n at,

sanga intban o rat (shiBor), n Januay 2007.

5 China Money, N. 2, 2006:76.

6 Ngatv nna ntt at p by t png wa xang at a nt pa

a vn an nnt at. it gt b a tat, ung t p z yn

ntt at, atnay ngatv ntt at n yn w p by yna wap.

Wat pt t ngatv ntt at ny atnay ngatv wa gn ban pangt yn un n nn-ntt-bang unt aunt at t Ban Japan. T anagy

pt bau t ngatv ntt at n yn avaab t gn ban ft

t t tanng t Japan ban an t n t a a. But t anagy


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uu n tat t ggt t at tat n t cn a nt pvnt nn-nt

btanng ntt-bang vn nn-ntt-bang ng ptn n t nnb

n, w wng t pay ntt n ng wa ptn .

7 in t n wa an wap at, t wa at av bn p pay by

nta btwn n ntt at an Us a ntt at an a avaabany gng a unyng tanatn.

8 A cn nvua nw an bng n ny a axu Us$50,000 p annu un

t unt aunt, wn a pvu de acto ng Us$300,000.

9 T aut autn: [t] a ubtty nvv n ung paty ntn t vauat t

v ntgatn. Wn a paty ntn jt, tnnutn vatn ay

b u t t gat n ntgatn, gat nvgn n p,

bt (p.6). W nn t py nvgn.

10 in, Gang auaty tt uggt tat t t ntt at pa wn n Fgu

14.6, nn t auaty un t Us at t t cn at. in, t nu ypttat t t-nt cn p y nt au t t-nt Us Tauy b y

annt b jt. T un unt t t gna vw tat t Unt stat a gba

ntt at tt an cna a w.

11 rbt mun an rn mknnn av ng t t ptan t nnb de

acto a pg a a b nna an. it an, wv, an pa qutn a

t w u t nfatn nvgn u b attbut t t an a pp t

tng-a cn a nt. T Us Fa rv tgtn aggvy 1994

t 1995 wn t nnbwa t tab agant t Us a. in t nxt t

ya, t Fa rv a wat w cn P Zu rngj t

u au t nt t nfatn unt t eat Aan nana v

tng fatnay t t cn ny.

Reerences

cung, Y-W., cnn, m.d an Fuj, e., 2003. The Chinese economies in global

context: the integration process and its determinants, Wng Pap N.10047,

otb, Natna Buau en ra, cabg, mA.

db, G., Gyntbg, J. an Pub, m., 2006. Fwa uny at

n Aa: n t Autaan xpn, BIS Quarterly Review,

sptb:5364.

engn, B., 2004. cn uny ntv, Pap pnt at t

Aan en Pan hng kng, Ap.

Fan, J., 1992. maung ntnatna apta bty: a vw, American

Economic Review, 82(2):197202.

, 2004. on t nnb: t btwn ajutnt un a x

xang at an ajutnt un a fxb at, Pap pnt at t

hg-lv sna n Fgn exang syt, daan, 2627 may.

kawa, m. an Taag, s., 2001. rtnng apta nt (unpub).


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287


lan, P. an m-Fantt, G.m., 2006. The external wealth o nations Mark II:

revised and extended estimates o oreign assets and liabilities, 19702004,

Wng Pap, N. 06/69, intnatna mntay Fun, Wangtn, dc.

ma, G., h, c. an mcauy, r.N., 2004. T at nn-vab

wa n Aan un, BIS Quarterly Review, Jun:8194.

ma, G. an mcauy, r. (tng). Are Chinas capital controls still binding?,

Bis Wng Pap, Ban intnatna sttnt, Ba.

otan, i. an Twa, s., 1981. Capital controls and interest rate parity: the Japanese

experience 197881, sta Pap, db, intnatna mntay Fun,

Wangtn, dc:793815.

Paa, e., rubaug, T. an Wang, Q., 2005. Putting the cart beore the horse?

Capital account liberalization and exchange rate fexibility in China, Py

dun Pap, PdP/05/01, intnatna mntay Fun, Wangtn,

dc.

Paa, e. an W, s.J., 2005. The Chinese approach to capital infows: patterns

and possible explanations, Wng Pap, N. 05/07, intnatna mntay

Fun, Wangtn, dc.

Anwgnt

T aut w t tan patpant t nn cna an egngAa: ganng t gba ny, 1112 may 2006, su; t Nw

mntay an exang-rat Aangnt eat Aa nn, 2227

may 2006, at t Bag; an a Ban intnatna sttnt na

t nt. spa tan g t cau B, Gg m. vn Futnbg

an Yu Yngng. T vw xp a t aut an nt nay

t t Ban intnatna sttnt.

Appendix

T pa btwn n y an NdF-p y

in t abn apta nt, t wa xang at t

uny n by abtag t t pt at an t ntt at nta

btwn t uny an t a tug t v ntt paty

ntn (ma t a. 2004).

F = s(1+)/(1+$

)

w F t wa at, s t pt at, t ntt at n t

uny an $ t a ntt at. Wn t a n -b

ttn, bwng an nng nu tat t abv .


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Wn apta nt bn, wv, nn-nt gt nt av u

a t n t pant, gvng t NdF.

NdF = s(1+)/(1+$)

w t NdF-p y n t uny . Nt tat

by ntn, nt ntan by t z w bun an u b

ubtantay ngatv. T t xtnt tat t abtag btwn t n

ny at an NdF at tvy ntan by apta

nt, t NdF-p ntt at, , an naby

t ntt at pvang n t n ny at, . A ag an

ptnt n pa ( ) nat t pn tv

-b ttn. T gn t y gap u a va pvang

at ntn: a ptv gn p appatn pu n t

uny n t pn apta nt an v va.

W a ptnty bg n y gap nat at

gntatn, a tpay naw gap w nt nay uggt

tv apta nt. on pbty tat at ntn a u

tat appatn patn pu n t uny a agy abnt

tat t tat y gap atvy a.

Ant, n pnp quvant, appa t tat t p n

y n t uny ung t n vab wa an tn

t pa t wt t NdF-p y. Atnatvy, n u

pa t n vab wa ty wt t NdF untpat

t v a wa pu pa. T t t nt appa

pn n pat n ata avaabty an at quty. in cna a, t

atnatv au u b uu v t, a t vant

n at vp an ata b avaab.


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5.1-how effective are china's capital controls

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