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China’s Growth, Stability, and Use of International Reserves

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  • Joshua Aizenman
  • Yothin Jinjarak
  • Nancy Marion

Abstract

Since the onset of the global financial crisis, China and the U.S. have reduced their current-account imbalances as a share of GDP to less than half their pre-crisis levels. For China, the reduction in its current-account surplus post-crisis suggests a structural change. Panel regressions for a sample of almost 100 countries over 1983–2013 confirm that the relationship between current-account balances and economic variables changed in important ways after the financial crisis. China’s rebalancing has been accompanied by a decline in its reserves-to-GDP ratio and greater outward FDI that, in turn, has mitigated reserve hoarding. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Joshua Aizenman & Yothin Jinjarak & Nancy Marion, 2014. "China’s Growth, Stability, and Use of International Reserves," Open Economies Review, Springer, vol. 25(3), pages 407-428, July.
    • Handle: RePEc:kap:openec:v:25:y:2014:i:3:p:407-428
    DOI: 10.1007/s11079-014-9308-x
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    Citations

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    Cited by:

    1. Aizenman, Joshua & Cheung, Yin-Wong & Ito, Hiro, 2015. "International reserves before and after the global crisis: Is there no end to hoarding?," Journal of International Money and Finance, Elsevier, vol. 52(C), pages 102-126.
    2. Aizenman, Joshua & Jinjarak, Yothin & Zheng, Huanhuan, 2018. "Chinese outwards mercantilism – The art and practice of bundling," Journal of International Money and Finance, Elsevier, vol. 86(C), pages 31-49.
    3. Joshua Aizenman, 2015. "Internationalization of the RMB, Capital Market Openness and Financial Reforms in China," Pacific Economic Review, Wiley Blackwell, vol. 20(3), pages 444-460, August.
    4. Leontyeva, Elena (Леонтьева, Елена) & Narkevich, Sergey (Наркевич, Сергей), 2015. "Optimal Practice of Creation and Management of Gold Reserves [Оптимальная Практика Создания И Управления Золотовалютными Резервами]," Published Papers mak12, Russian Presidential Academy of National Economy and Public Administration.
    5. Bayoumi, Tamim & Gagnon, Joseph & Saborowski, Christian, 2015. "Official financial flows, capital mobility, and global imbalances," Journal of International Money and Finance, Elsevier, vol. 52(C), pages 146-174.
    6. Joshua Aizenman, 2015. "Internationalization of the RMB, Capital Market Openness and Financial Reforms in China," Pacific Economic Review, Wiley Blackwell, vol. 20(3), pages 444-460, August.
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    More about this item

    Keywords

    China’s Growth; Stability; International Reserves; Current account; Re-balancing;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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