This paper deals with two related issues: the sustainability of China's exchange rate regime and the opening up of its capital account. The exchange rate discussion deliberately passes over the issue of the "equilibrium" value of the renminbi and its alleged undervaluation - typically at the...

A bivariate vector-autoregression (VAR) model is used to test causal relations between the current account and the capital account in four emerging market economies. The results show that high capital mobility could be a major cause of current account instability. Therefore, macroeconomic policy...

This paper reviews the steps that China has taken towards financial reform with a particular focus on capital account liberalisation and internationalisation of the use of the renminbi. After a slowdown in reform momentum during the global financial crisis, there is a clear push towards reform,...