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The Yuan and Shanghai Pilot Free Trade Zone

Author

Listed:
  • Yao, Daqing

    (Shanghai Academy of Social Sciences)

  • Whalley, John

    (University of Western Ontario)

Abstract

In this paper, we present evidence as to the effects of the China (Shanghai) Pilot Free Trade Zone on China’s capital controls which was initiated in September, 2013. It was a trial to introduce a combination of floating exchange rate and capital account liberalization into China’s macro policy mix. We employ three methods to test the China(Shanghai) Pilot Free Trade Zone’s impact on capital controls: price spread tests between Chinese Yuan in Hong Kong and Chinese Yuan, Renminbi yield gaps between onshore and offshore Renminbi markets, and Granger causalities in China’s money supply and foreign interest rates. All these tests give consistent results suggesting that the impact of China’s capital controls is weaker since the China (Shanghai) Pilot Free Trade Zone.

Suggested Citation

  • Yao, Daqing & Whalley, John, 2015. "The Yuan and Shanghai Pilot Free Trade Zone," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 30(4), pages 591-615.
    • Handle: RePEc:ris:integr:0670
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    Citations

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    Cited by:

    1. Penghao Ye & Huarong Zhang & Siyi Ma & Fang Yang & Yanan Li, 2022. "A Knowledge Map Study of an Application of a Smart Land Planning Free-Trade Zone and China’s Contribution," Land, MDPI, vol. 11(6), pages 1-21, June.
    2. Fulgence Dominick Waryoba, 2018. "Yuan Revaluation and China’s External Trade Performance," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 4(2), pages 112-119, June.
    3. Feng, Wei & Sun, Shujun & Yuan, Hang, 2023. "Research on the efficiency of factor allocation in the pilot free trade zones," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 727-745.
    4. Bei Wang & Hong Chen & Ruiqi Chen & Weiting Zeng & Lechuan Ye, 2023. "Does the Green Development of Cities Need High-Level Opening Up? A Quasi-Natural Experiment Based on China’s Pilot Free Trade Zone," Sustainability, MDPI, vol. 15(7), pages 1-20, March.
    5. Zeng, Jing & Zhang, Bingqian & Li, Kevin K., 2024. "The impact of free trade zones on ESG performance: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 1110-1122.
    6. Jong-Eun Lee, 2016. "Exchange Rate Dynamics with Foreign Reserves: Revisiting the Dornbusch Overshooting Model," Review of Development Economics, Wiley Blackwell, vol. 20(2), pages 406-414, May.
    7. Aiwu Zhao & Jingyi Wang & Hongjun Guan, 2022. "Has the Free Trade Zone Construction Promoted the Upgrading of the City’s Industrial Structure?," Sustainability, MDPI, vol. 14(9), pages 1-21, May.

    More about this item

    Keywords

    Evaluation; Effect; Shanghai; Free Trade Zone;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls

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