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Global Liquidity,Offshore Bond Issuance and Shadow Banking in China

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  • Shugo Yamamoto

    (Graduate School of Economics, Kobe University / The Graduate School of East Asian Studies,Yamaguchi University)

Abstract

In China, to benefit from abundant global liquidity, offshore affiliates of non-financial companies have been increasingly used as financing vehicles for accumulating low-yield US dollar liabilities. To elucidate this issue and its implications, we specifically examine offshore bond issuance, within-company flows, and shadow banking. Results indicate that a global liquidity shock will increase shadow banking, as represented by entrusted loans in China. In spite of strict financial restrictions, about 20% of the variance of shadow banking is explained by global liquidity shocks.

Suggested Citation

  • Shugo Yamamoto, 2020. "Global Liquidity,Offshore Bond Issuance and Shadow Banking in China," Discussion Papers 2011, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:2011
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    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2020/2011.pdf
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