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Lenient Entry, Stringent Exit: A Political Economy of Foreign Exchange Reserve Demand and Policy in the People's Republic of China

Oskam, Michiel LU (2017) EKHR81 20171
Department of Economic History
Abstract
This thesis explores the links between China’s demand for foreign exchange reserves and the political economy aspects of China’s monetary policy framework since the start of reforms in 1978. In a single-country approach focused on China, this study combines an assessment of the politico-economic factors that may have influenced China’s demand for foreign exchange reserves with a cointegration analysis of the macroeconomic determinants of the demand for reserves. The assessment suggests that China’s monetary policy framework has been geared to accomplish the government’s long-lived goal of high export- and investment-led growth, at the expense of the wealth of Chinese households. The empirical findings support the premise of a strong... (More)
This thesis explores the links between China’s demand for foreign exchange reserves and the political economy aspects of China’s monetary policy framework since the start of reforms in 1978. In a single-country approach focused on China, this study combines an assessment of the politico-economic factors that may have influenced China’s demand for foreign exchange reserves with a cointegration analysis of the macroeconomic determinants of the demand for reserves. The assessment suggests that China’s monetary policy framework has been geared to accomplish the government’s long-lived goal of high export- and investment-led growth, at the expense of the wealth of Chinese households. The empirical findings support the premise of a strong connection between China’s growth model and the demand for international reserves, which is noticed by a dominance of current and capital account considerations in China’s short- and long-term demand for foreign exchange reserves. (Less)
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author
Oskam, Michiel LU
supervisor
organization
course
EKHR81 20171
year
type
H1 - Master's Degree (One Year)
subject
keywords
Foreign exchange reserves, China, political economy, monetary policy, reserve demand
language
English
id
8923947
date added to LUP
2017-09-07 12:55:11
date last changed
2017-09-07 12:55:11
@misc{8923947,
  abstract     = {This thesis explores the links between China’s demand for foreign exchange reserves and the political economy aspects of China’s monetary policy framework since the start of reforms in 1978. In a single-country approach focused on China, this study combines an assessment of the politico-economic factors that may have influenced China’s demand for foreign exchange reserves with a cointegration analysis of the macroeconomic determinants of the demand for reserves. The assessment suggests that China’s monetary policy framework has been geared to accomplish the government’s long-lived goal of high export- and investment-led growth, at the expense of the wealth of Chinese households. The empirical findings support the premise of a strong connection between China’s growth model and the demand for international reserves, which is noticed by a dominance of current and capital account considerations in China’s short- and long-term demand for foreign exchange reserves.},
  author       = {Oskam, Michiel},
  keyword      = {Foreign exchange reserves,China,political economy,monetary policy,reserve demand},
  language     = {eng},
  note         = {Student Paper},
  title        = {Lenient Entry, Stringent Exit: A Political Economy of Foreign Exchange Reserve Demand and Policy in the People's Republic of China},
  year         = {2017},
}