EconoMonitor

Peterson Institute for International Economics

Roubini Topic Archive: China

  • China: Capital Stock….and Flow

    Recently there have been several articles written on the China’s capital stock. The argument in most of these pieces is that China’s capital stock per capita is low and thus claims of overinvestment in China are incorrect. Just to recap, the capital stock is a broad measure of the existing physical capital in an economy. […]

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  • Can Microcredit Lenders Fill the Gap?

    The Chinese press is full of stories documenting the difficulties small and medium enterprises (SMEs) have obtaining financing. Contrary to popular belief, the problem is not that SMEs are being crowded out by large enterprises. The SME share of total business loans has been relatively stable in the past several years. Moreover, the pace of […]

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  • China’s Economic Outlook in 2020 and Beyond

    Near-term China investment decisions and US trade and economic policymaking are influenced by competing views of China’s longer-term outlook. Yet economic models of China’s long-term growth are shaky, debatable and hence few in number. Official statements from China’s leadership about long-term expectations, and more importantly about the composition of long-term economic growth, are even more […]

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  • Chinese Household Wealth and the Housing Market

    The Chinese housing market is clearly undergoing a correction that may eventually bring housing prices back to a more reasonable level. As the past several years have made all too apparent, housing downturns are economically painful and can lead to larger economic crises. The network of financial leverage that fueled the US housing bubble turned […]

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  • Oops, I Underestimated China’s GDP

    More than a year ago, I argued that China’s GDP in purchasing power parity (PPP) dollars had overtaken that of the United States in 2010. This calculation is used in my book, Eclipse: Living in the Shadow of China’s Economic Dominance and plays a role in my conclusion that China has overtaken or is close […]

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  • China: Capital Account Liberalization and the Corporate Bond Market

    The People’s Bank of China (PBoC) released a report (Chinese language) this week that focused on prospects for capital account liberalization. Opening up the capital account would be a major reform, perhaps the most significant in a more than a decade. It would give Chinese savers an escape hatch from financial repression and force the […]

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  • China’s Rebalancing Will Not Be Automatic

    The imminent rebalancing of China’s economy has been forecast repeatedly over the past several years. With the shrinking of China’s external surplus during 2011, proponents of this argument have all but declared victory. The decrease of the current account surplus, from 10.1 per cent in 2007 to less than 3 per cent in 2011, is a […]

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  • The Myth of China’s Giant Fiscal Deposits

    There is a recurring notion that pops up every now and then that the Chinese government has a giant rainy day fund. When growth slows but banks are constrained in expanding lending, analysts start to call on China to tap into these reserves to finance fiscal stimulus. Macquarie: “Running down PBC [People’s Bank of China] […]

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  • The Link Between China’s Property Market and Local Government Finances

    The importance of the property market to China’s investors, savers and banks is well known, but its impact on local governments is less well understood. The ability of Chinese local governments to service the debt they have built up over the past several years, 10.7 trillion RMB at the end of 2010, relies heavily upon […]

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  • The Internal Cost of China’s Currency Policy

    By Joseph E. Gagnon, Nicholas R. Lardy, and Nicholas Borst It is currently costing the Chinese central bank about $240 billion per year to hold down the value of the Chinese currency relative to other currencies.  This cost is growing rapidly.  The cost would decrease significantly if China allowed its currency to float and began […]

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