Reports

04.01.10

Determinants of China’s Private Consumption: An International Perspective

Kai Guo and Papa N'Diaye
International Monetary Fund (IMF)
Gauges the key determinants of China's private consumption in relation to GDP using data on the Chinese economy and evidence from other countries' experiences. The results suggest there is nothing "special" about consumption in...

Reports

03.24.10

Appreciate This: Chinese Currency Rise Will Have a Negligible Effect on the Trade Deficit

Daniel Ikenson
Cato Institute
This report argues that the Obama administration and Congress should consider whether RMB appreciation would even lead to the outcomes they desire—namely, more balanced trade. The evidence does not support their objective. Although the short-term...

Reports

03.01.10

Public Expenditures on Social Programs and Household Consumption in China

Emanuele Baldacci, Giovanni Callegari, David Coady, Ding Ding, Manmohan Kumar, Pietro Tommasino, and Jaejoon Woo
International Monetary Fund (IMF)
This paper argues that increasing government social expenditures can make a substantive contribution to increasing household consumption in China. The paper first undertakes an empirical study of the relationship between the savings rate and social...

Reports

02.04.10

The 2009 Asia Pacific Economic Cooperation (APEC) Meetings and U.S. Trade Policy in Asia

Michael F. Martin
Peony Lui
Congressional Research Service
Congress and the Executive Branch have historically identified the Asia Pacific Economic Cooperation forum (APEC) as potentially important in the promotion of liberalized international trade and investment in Asia, and possibly the rest of the world...

Reports

01.01.10

China: Does Government Health and Education Spending Boost Consumption?

Steven Barnett and Ray Brooks
International Monetary Fund (IMF)
Consumption in China is unusually low and has continued to decline as a share of GDP over the past decade. A key policy question is how to reverse this trend, and rebalance growth away from reliance on exports and investment and toward consumption...

Reports

12.11.09

China’s Economic Conditions

Wayne M. Morrison
Peony Lui
Congressional Research Service
Since the initiation of economic reforms and trade liberalization thirty years ago, China has been one of the world’s fastest-growing economies and has emerged as a major economic and trade power. The combination of large trade surpluses, FDI flows...

Reports

12.07.09

China’s Currency: A Summary of the Economic Issues

Wayne M. Morrison, Marc Labonte
Peony Lui
Congressional Research Service
Some Members of Congress charge that China’s policy of accumulating foreign reserves (especially U.S. dollars) to influence the value of its currency constitutes a form of currency manipulation intended to make its exports cheaper and imports into...

Reports

11.25.09

China’s Assistance and Government-Sponsored Investment Activities in Africa, Latin America, and Southeast Asia

Thomas Lum
Peony Lui
Congressional Research Service
In recent years, the People’s Republic of China (PRC) has bolstered its diplomatic presence and garnered international goodwill in the developing world through financing infrastructure and natural resource development projects, assisting in the...

Reports

11.20.09

China-U.S. Relations: Current Issues and Implications for U.S. Policy

Kerry Dumbaugh
Peony Lui
Congressional Research Service
The bilateral relationship between the U.S. and the People’s Republic of China (PRC) is vitally important, touching on a wide range of areas including, among others, economic policy, security, foreign relations, and human rights. U.S. interests with...

China: The Fragile Superpower

Christian Caryl from New York Review of Books
Some China watchers believe that China’s dramatically rising prosperity will inevitably make the country more open and democratic. President Barack Obama’s highly-scripted trip this week provided little to support that claim. As The Washington Post...

Reports

11.16.09

The Rise of China’s Auto Industry and Its Impact on the U.S. Motor Vehicle Industry

Rachel Tang
Peony Lui
Congressional Research Service
The automobile industry, a key sector in China’s industrialization and modernization efforts, has been developing rapidly since the 1990s. In recent years, China has become the world’s fastest growing automotive producer. Annual vehicle output has...

Reports

11.01.09

Macroeconomic Implications for Hong Kong SAR of Accommodative U.S. Monetary Policy

Papa N'Diaye
International Monetary Fund (IMF)
This paper discusses the potential macroeconomic implications for Hong Kong SAR of accommodative monetary policy in the United States. It shows, through model simulations, that a resumption of the credit channel in Hong Kong SAR has the potential to...

Reports

11.01.09

Governance and Fund Management in the Chinese Pension System

Gregoro Impavido, Yu-Wei Hu, and Xiaohong Li
International Monetary Fund (IMF)
The Chinese pension system is highly fragmented and decentralized, with governance standards, pension fund management practices, their regulation and supervision varying considerably both across the funded components of the Chinese pension system...

China’s Boom: The Dark Side in Photos

Orville Schell from New York Review of Books
I have seen some woeful scenes of industrial apocalypse and pollution in my travels throughout China, but there are very few images that remain vividly in my mind. This is why the photographs of Lu Guang are so important. A fearless documentary...

Reports

09.01.09

What’s the Damage? Medium-term Output Dynamics After Banking Crises

Abdul Abiad, Ravi Balakrishnan, Petya Koeva Brooks, Daniel Leigh, and Irina Tytell
International Monetary Fund (IMF)
This paper investigates the medium-term behavior of output following banking crises, and its association with pre- and post-crisis conditions and policies. The authors find that output tends to be depressed substantially following banking crises,...

Reports

09.01.09

What Drives China's Interbank Market?

Nathan Porter and TengTeng Xu
Sara Segal-Williams
International Monetary Fund (IMF)
Interest rates in China comprise a mix of both market determined interest rates (interbank rates and bond yields), and regulated interest rates (lending and deposit rates), reflecting China's gradual process of interest rate liberalization. We...

Reports

07.16.09

East Asia’s Foreign Exchange Rate Policies

Michael F. Martin
Peony Lui
Congressional Research Service
Financial authorities in East Asia have adopted a variety of foreign exchange rate policies, ranging from Hong Kong’s currency board system which links the Hong Kong dollar to the U.S. dollar, to the “independently floating” exchange rates of Japan...

Reports

07.01.09

Broad Money Demand and Asset Substitution in China

Ge Wu
International Monetary Fund (IMF)
Recent changes to China's financial system, in particular ongoing interest rate liberalization, gradual movement toward a more flexible exchange rate regime, and rapid development of capital markets, have changed substantially the environment...

Reports

06.17.09

Report on the Tri-Provincial and Hubei-Xiaogan-Xiangfan Highway Projects

World Bank
This is a report on the performance of two highway projects in China which were financed by a loan from the World Bank. The Tri-Provincial Highway Project, which links Gansu, Ningxi, and Inner Mongolia, and the Hubei-Xiaogan-Xiangfan Highway Project...

Reports

06.03.09

China and the Global Financial Crisis: Implications for the United States

Wayne M. Morrison
Peony Lui
Congressional Research Service
Over the past several years, China has enjoyed one of the world’s fastest growing economies and has been a major contributor to world economic growth. However, the current global financial crisis threatens to significantly slow China’s economy...

Reports

05.01.09

China’s $1.5 Trillion Bet: Understanding China’s External Portfolio

Brad W. Setser
He Jianan
Council on Foreign Relations
China is now by far the United States’ largest creditor. Its treasury portfolio recently surpassed that of Japan’s, and it has long held more agency (Fannie Mae, Freddie Mac) bonds than any other country. Never before has a nation as poor as China...

Reports

04.02.09

Taiwan-U.S. Relations: Developments and Policy Implications

Kerry Dumbaugh
Peony Lui
Congressional Research Service
Policy toward and support for Taiwan are a key element in U.S. relations with the People’s Republic of China (PRC) and an important component of U.S. policy in Asia. Recently, pessimistic observers see growing PRC-Taiwan ties eroding U.S. influence...

Reports

03.31.09

Asia Pacfic Economic Cooperation (APEC) and the 2008 Meetings in Lima, Peru

Michael F. Martin
Peony Lui
Congressional Research Service
Congress and the Executive Branch have historically identified the Asia Pacific Economic Cooperation (APEC) as an important organization to help promote the U.S. goal of liberalizing international trade and investment in Asia, and possibly the rest...

Reports

03.17.09

The Tibetan Policy Act of 2002: Background and Implementation

Kerry Dumbaugh
Peony Lui
Congressional Research Service
U.S. policy on Tibet is governed by the Tibetan Policy Act of 2002 (TPA), enacted as part of the Foreign Relations Authorization Act of FY2003 (P.L. 107-228). In addition to establishing a number of U.S. principles with respect to human rights,...

Reports

02.25.09

China’s Foreign Aid Activities in Africa, Latin America, and Southeast Asia

Thomas Lum, Hannah Fischer, Julissa Gomez Granger, Anne Leland
Peony Lui
Congressional Research Service
In the past several years, the People’s Republic of China (PRC) has bolstered its diplomatic presence and garnered international goodwill through its financing of infrastructure and natural resource development projects, assistance in the carrying...

Reports

02.13.09

The Pivotal Relationship: How Obama Should Engage China

Liu Xuecheng Robert Oxnam
EastWest Institute
Providing their respective hopes and expectations on what they would like to see in the Obama administration’s China policy are Liu Xuecheng and Robert Oxnam, who both envision opportunities for reframing the China-U.S. relationship in a way that...

Reports

01.07.09

Taiwan-U.S. Relations: Recent Developments and Their Policy Implications

Kerry Dumbaugh
Peony Lui
Congressional Research Service
U.S.-Taiwan relations have undergone important changes, sparked in part by the increasing complexity of Taiwan’s democratic political environment and the continued insistence of Beijing that the separately ruled Taiwan is a part of the People’s...

Reports

01.01.09

Building Bridges: China’s Growing Role as Infrastructure Financier for Sub-Saharan Africa

Vivien Foster, William Butterfield, Chuan Chen, and Nataliya Pushak
World Bank
Over the last decade Chinese investment in Africa has grown considerably. This includes the financing of large infrastructural projects in many African countries. Although Chinese finance of African infrastructure is important, there is not much...

Reports

01.01.09

Yen Bloc or Yuan Bloc: An Analysis of Currency Arrangements in East Asia

Kazuko Shirono
Sara Segal-Williams
International Monetary Fund (IMF)
This paper examines the role of Japan against that of China in the exchange rate regime in East Asia in light of growing interest in forming a currency union in the region. The analysis suggests that currency unions with China tend to generate...

Reports

12.19.08

Sino-Japanese Relations: Issues for U.S. Policy

Emma Chanlett-Avery, Kerry Dumbaugh, William H. Cooper
Peony Lui
Congressional Research Service
After a period of diplomatic rancor earlier this decade, Japan and China have demonstrably improved their bilateral relationship. The emerging detente includes breakthrough agreements on territorial disputes, various high-level exchanges, and...

Reports

12.01.08

The Macroeconomic Impact of Healthcare Financing Alternatives: Reform Options for Hong Kong SAR

Dennis Botman and Nathan Porter
International Monetary Fund (IMF)
With much healthcare publicly funded, Hong Kong's rapidly aging population will significantly raise fiscal pressure over coming decades. The authors ask what the implications are of meeting these costs by public funding, or private funding...

Reports

12.01.08

The Impact of Introducing a Minimum Wage on Business Cycle Volatility: A Structural Analysis for Hong Kong SAR

Nathan Porter and Francis Vitek
Sara Segal-Williams
International Monetary Fund (IMF)
We study the impact of a minimum wage on business cycle volatility, depending upon its coverage and adjustment mechanism. As with other small open economies, Hong Kong SAR is vulnerable to external shocks, with its exchange rate regime precluding...

Reports

12.01.08

Hong Kong SAR Economic Integration With the Pearl River Delta

Hongyi Chen and Olaf Unteroberdoerster
International Monetary Fund (IMF)
Hong Kong SAR's economic integration with the Mainland has primarily taken place in the Pearl River Delta (PRD). Taking stock of integration trends, this paper discusses key implications for ensuring economic benefits of further integration are...

Reports

10.08.08

U.S. Foreign Aid to East and South Asia: Selected Recipients

Thomas Lum
Peony Lui
Congressional Research Service
Since the war on terrorism began in 2001 and the Millennium Challenge Account (MCA) and Global HIV/AIDS Initiative (GHAI) were launched in 2004, the United States has increased foreign aid spending dramatically in some regions, including East and...

Reports

09.17.08

Taiwan: Overall Developments and Policy Issues in the 109th Congress

Kerry Dumbaugh
Peony Lui
Congressional Research Service
U.S. officials saw relations with Taiwan as especially troubled during the 109th Congress in 2005-2006, beset by the increasing complexity and unpredictability of Taiwan’s democratic political environment as well as by PRC actions underscoring...

Reports

09.01.08

Creating Financial Harmony: Lessons for China 

James A. Dorn
Cato Institute
The current turmoil in global financial markets, which began with the American subprime crisis in 2007, has put market liberalism in a bad light. But it was the socialization of risk—not private free markets—that precipitated the crisis. This...

Reports

08.24.08

Energy Interests and Alliances: China, America and Africa

Angelica Austin, Danila Bochkarev, and Willem van der Geest
EastWest Institute
According to conventional wisdom, the United States and China are locked in a high-stakes competition for energy resources around the world, particularly in Africa. Against the backdrop of highly volatile oil prices, mounting concerns about global...

Reports

07.21.08

China’s “Hot Money” Problems

Michael F. Martin, Wayne M. Morrison
Peony Lui
Congressional Research Service
China has experienced a sharp rise in the inflow of so-called “hot money,” foreign capital entering the country supposedly seeking short-term profits, especially in 2008. Chinese estimates of the amount of “hot money” in China vary from $500 billion...

Reports

06.30.08

Tibet: Problems, Prospects, and U.S. Policy

Kerry Dumbaugh
Peony Lui
Congressional Research Service
On March 10, 2008, a series of demonstrations began in Lhasa and other Tibetan regions of China to mark the 49th anniversary of an unsuccessful Tibetan uprising against Chinese rule in 1959. The demonstrations appeared to begin peacefully with small...

Reports

06.01.08

Why Are Saving Rates of Urban Households in China Rising?

Marcos Chamon and Eswar Prasad
International Monetary Fund (IMF)
From 1995 to 2005, the average urban household saving rate in China rose by 7 percentage points, to ¼ of disposable income. The authors use household-level data to explain the postponing of consumption despite rapid income growth. Saving rates have...

Reports

04.01.08

Real and Financial Sector Linkages in China and India

Jahangir Aziz
International Monetary Fund (IMF)
In the spirit of what is known as business cycle accounting, this paper finds that the investment wedge—the gap between household rates of intertemporal substitution and the marginal product of capital—is large and quantitatively significant in...

Reports

04.01.08

A Real Model of Transitional Growth and Competitiveness in China

Leslie Lipschitz, Céline Rochon, and Geneviève Verdier
International Monetary Fund (IMF)
The authors present a stylized real model of the Chinese economy with the objective of explaining two features: (1) domestic production is highly competitive in the sense that an accumulation of capital that raises the marginal product of labor...

Reports

03.01.08

Hong Kong SAR as a Financial Center for Asia: Trends and Implications

Cynthia Leung and Olaf Unteroberdoerster
International Monetary Fund (IMF)
We document Hong Kong SAR's evolving role as an international financial center in the Asia region, the importance of the growing special link with China as well as supply-side advantages, and outline the scope for future financial services...

Reports

02.13.08

How Large is China’s Economy? Does it Matter?

Wayne M. Morrison, Michael F. Martin
Peony Lui
Congressional Research Service
China’s rapid economic growth since 1979 has transformed it into a major economic power. Over the past few years, many analysts have contended that China could soon overtake the United States to become the world’s largest economy, based on estimates...

Reports

12.01.07

Africa-China-U.S. Trilateral Dialogue

"The Brenthurst Foundation, Chinese Academy of Social Sciences, Council on Foreign Relations, Leon H. Sullivan Foundation
He Jianan
Council on Foreign Relations
Over the course of the last thirteen months, delegates from Africa, China, and the United States have met three times in an effort to identify strategies of cooperation among their respective nations with the goal of accelerating economic...

Reports

12.01.07

High Growth and Low Consumption in East Asia: How to Improve Welfare While Avoiding Financial Failures

Andrew Feltenstein, Céline Rochon, and Maral Shamloo
International Monetary Fund (IMF)
This paper analyzes certain policies that are typical of a number of rapidly growing East Asian countries in which a fixed exchange rate, combined with a surplus labor market, has made domestic assets relatively inexpensive, generating high rates of...

Reports

11.01.07

China's Changing Trade Elasticities

Jahangir Aziz and Xiangming Li
International Monetary Fund (IMF)
In recent years, much has been written about the China's rising current account surplus and the importance of its exchange rate policy. At the same time, the increasing integration of China into the global economy has raised questions about how...

Reports

10.15.07

Securing Land Rights for Chinese Farmers

Zhu Keliang and Roy Prosterman
Cato Institute
Despite China's significant economic growth, most of the 700 million farmers that make up about 56% of the total population still lack secure and marketable land rights that would allow them to make long-term investment in land in order to...

Reports

10.01.07

What Drives China’s Growing Role in Africa?

Jian-Ye Wang
Sara Segal-Williams
International Monetary Fund (IMF)
What role does China play in Africa’s development? What drives China’s increasing economic involvement in the continent? This paper attempts to provide a quantified assessment of China’s multifaceted influence as market, donor, financer and investor...

Reports

09.01.07

The Shifting Structure of China's Trade and Production

Li Cui and Murtaza Syed
International Monetary Fund (IMF)
This paper uses disaggregated trade data to assess how the expansion of China's production capacity and its changing production structure may be affecting its trade linkages with other countries. It finds that China is moving away from...

Reports

07.01.07

Guarding Against Fiscal Risks in Hong Kong SAR

Nathan Porter
International Monetary Fund (IMF)
The Hong Kong SAR's government faces the dual challenges of volatile revenue and medium term spending pressures arising from a rapidly aging population. Age-related spending pressures raise long-run sustainability concerns, while revenue...

Reports

07.01.07

Explaining China's Low Consumption: The Neglected Role of Household Income

Jahangir Aziz and Li Cui
International Monetary Fund (IMF)
The Chinese government has recently focused on the need to increase consumption to rebalance the economy. A widely held view is that despite China's remarkably high growth, the share of consumption in total expenditure has been low and...

Reports

05.01.07

Pension Reform in China: The Need for a New Approach

Steven Dunaway and Vivek Arora
International Monetary Fund (IMF)
The rapid aging of China's population over the next few decades makes it important for a new pension system with broad and adequate coverage to be put in place quickly. Pension reforms, first initiated in 1997, have become bogged down in...

Reports

03.01.07

Will India Be a Better Strategic Partner Than China?

Dan Blumenthal
American Enterprise Institute for Public Policy Research
The Joint Declaration signed on July 18, 2005, by President George W. Bush and Indian Prime Minister Manmohan Singh has been heralded in some quarters as the equivalent of President Richard Nixon’s opening to China. The opening to China under...

Reports

01.13.07

Is China a Threat to the U.S. Economy?

Craig K. Elwell, Marc Labonte
Peony Lui
Congressional Research Service
The rise of China from a poor, stagnant country to a major economic power within a time span of only twenty-eight years is often described by analysts as one of the greatest economic success stories in modern times. From 1979 (when economic reforms...

Reports

01.12.07

The State of Wildlife Trade in China

Xu Ling, Liu Xueyan, Meng Meng, Yin Feng, Dick Tong, Timothy Lam, Xu Hongfa, Joyce Wu
World Wildlife
This edition aims to highlight wildlife trade trends in threatened and at-risk wildlife from the past year, with an emphasis on the impact of China’s consumption on globally important biodiversity ‘hotspots.’ Surveys in 2007 found that while illegal...

Reports

01.04.07

China’s Trade with the United States and the World

Thomas Lum, Dick K. Nanto
Peony Lui
Congressional Research Service
As imports from the People’s Republic of China (PRC) have surged in recent years, posing a threat to some U.S. industries and manufacturing employment, Congress has begun to focus on not only access to the Chinese market and intellectual property...

Reports

01.01.07

Das (Wasted) Kapital: Firm Ownership and Investment Efficiency in China

David Dollar and Shang-Jin Wei
International Monetary Fund (IMF)
Based on a survey that covers a stratified random sample of 12,400 firms in 120 cities in China with firm-level accounting information for 2002-2004, the authors examine the presence of systematic distortions in capital allocation that result in...

Reports

01.01.07

China: Strengthening Monetary Policy Implementation

Bernard J. Laurens and Rodolfo Maino
International Monetary Fund (IMF)
The People's Bank of China (PBC) has made great strides in modernizing its monetary policy frameworks, but their effectiveness will diminish as the sophistication of the economy increases. Empirical evidence supports maintaining a reference to...

Reports

12.01.06

Rebalancing China's Economy: What Does Growth Theory Tell Us?

Jahangir Aziz
Sara Segal-Williams
International Monetary Fund (IMF)
This paper uses the standard one-sector neoclassical growth model to investigate why China's consumption has been low and investment high. It finds that the low cost of capital has been quantitatively an important factor. Theory predicts that...