The Reform Program and Foreign Exchange Management

来源: CHINA FOREX 2017 Issue 1 作者:Fang Shangpu

The trend towards global economic and financial integration is undergoing a period of significant adjustment. The major economies have been undertaking structural adjustments and rebalancing their monetary policies. At the same time there have been important changes in cross-border capital flows. This has contributed to profound changes in China's balance of payments position and its foreign exchange situation,specifically a shift to a current account surplus and a capital account deficit from the "twin surpluses" of the past.

Since the global financial crisis of 2008,the economic recovery has been sluggish,and this has held back global trade and investment. Developing countries have had to roll out quantitative easing policies of various sizes and durations,and economic development overall has been unbalanced. From the perspective of global capital flows,emerging economies have had to endure big swings in cross-border capital movements,ranging from steady inflows to reduced intakes as well as net outflows.

From 2000 to the first half of 2014,China had a twin surplus on its current account and capital and financial account but from the second half of 2014 to 2016,the international balance of payments showed a current account surplus and deficit on the capital account and financial account. It should be noted,however,that there is a positive side to this shift in capital flows,at least in China's case. This is actually a sign of progress in the economic reform and opening up program as well as the effort to transform the economic structure.

Rising Incomes

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