- Consulting Editors
- List of Contributors
- The History of Biological Exploitation on the Pacific Rim
- Climate Risk and Response in the Pacific Rim
- Natural Disasters and Economic Policy for the Pacific Rim
- International Labor Migration in the Pacific Rim
- Age Compositional Shifts and Changing Intergenerational Transfers in Selected Asian Countries
- Human Capital Trends in the Pacific Rim
- Economic Growth and Performance on the Pacific Rim
- The New Structural Economics and Strategies for Sustained Economic Development in the Pacific Island Countries
- The Evolution of Fiscal Developments and Policies in the Pacific Rim
- Asia in Global Economic Governance
- Geoeconomics Versus Geopolitics: Implications for Asia
- The Political Economy of Asia-Pacific Trade Agreements
- Global Production Sharing and Trade Patterns in East Asia
- Foreign Trade of the Pacific-Rim Economies
- Are the Geese Still Flying? Catch-Up Industrialization in a Changing International Economic Environment
- Multinational Enterprises, Foreign Direct Investment, and the East Asian Economic Integration
- The Impact of Industrial Policy on Asian Growth: An Example From Taiwan
- Creative Industries: Socio-Economic Transformation as the New Face of Innovation
- The Road to Innovation in East Asia
- Asian Financial Crises
- The “Impossible Trinity,” The International Monetary Framework, and the Pacific Rim
- Rethinking Capital Account Liberalization
- Asian Currencies in the Global Imbalance and Global Financial Crisis
- Rebalancing of the World Economy and Asia
- China’s Financial Openness and Asset Return Linkages in East Asia
- The Offshore RMB Market in Hong Kong and RMB Internationalization
- Author Index
- Subject Index
Abstract and Keywords
This chapter examines the financial linkages between China and the rest of East Asia in the context of China’s possible financial liberalization and internationalization of its currency. It provides new empirical evidence on short-run and long-run linkages between China and East Asia for exchange rates, interest rates, and equity markets and discusses the divergence of asset return behavior between China and several Asian Pacific economies. It also considers the policy challenges faced by China in deciding how to sequence capital-account opening and currency internationalization with other policies such as financial market development.
Keywords: financial linkages, China, East Asia, financial liberalization, internationalization of currency, exchange rates, interest rates, equity markets, asset return behavior, capital-account opening
Reuven Glick is Group Vice President of International Research of the Federal Reserve Bank of San Francisco.
Michael Hutchison is Professor of Economics at the University of California, Santa Cruz and Co-Director of the Santa Cruz Center for International Economics.
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