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National and regional financial openness in China

Author

Listed:
  • Xiuping Hua
  • Anders C. Johansson
  • Xun Wang

Abstract

While China’s economy has been subject to a wide range of economic reforms since 1978, its capital account is still restricted. The issue of capital account convertibility is widely debated both in China and by foreign observers. This study contributes to the understanding of China’s capital account by constructing new indices for China’s financial openness. First, we construct alternative indices, both of which suggest that China has experienced significant increases in its financial openness, albeit beginning at very low levels in the late 1970s. Then, we construct an index for financial openness at the provincial level from 2000. As expected, the eastern provinces exhibit much higher levels of financial openness than the provinces located in the central and western parts of the country. Taken together, these indices enable a clear overview of national and regional financial openness across time and are well suited for future studies on determinants and effects of financial openness in China.

Suggested Citation

  • Xiuping Hua & Anders C. Johansson & Xun Wang, 2017. "National and regional financial openness in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 15(2), pages 127-140, April.
    • Handle: RePEc:taf:jocebs:v:15:y:2017:i:2:p:127-140
    DOI: 10.1080/14765284.2016.1261490
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    2. Yuan, Shenguo & Wu, Zhouheng & Liu, Lanfeng, 2022. "The effects of financial openness and financial efficiency on Chinese macroeconomic volatilities," The North American Journal of Economics and Finance, Elsevier, vol. 63(C).

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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