This paper attempts to explain why sterilized intervention was so successful and sustainable in China during the first decade of the 21st century. We argue that the Chinese Government established a sterilization cost-...This paper attempts to explain why sterilized intervention was so successful and sustainable in China during the first decade of the 21st century. We argue that the Chinese Government established a sterilization cost-sharing mechanism among the Peoples Bank of China, commercial banks and the househoM sector. On the one hand, Chinese commercial banks have to assume some of the sterilization costs bypurchasing low yield central bank bills and maintaining high levels of required reserves. On the other hand, Chinese households assume some of the sterilization costs by bearing negative real deposit interest rates. The cost- sharing mechanism under financial repression prevents a huge quasi-fiscal loss by the Peoples Bank of China as well as high inflation. However, Chinese households have become victims of this financial repression. Faced with the pressure of changing the growth model from investment-driven to domestic consumption-driven, the interest rate will have to be liberalized eventually, which will, in turn, make sterilized intervention unsustainable.展开更多
China＇s economic growth is heavily influenced by exports, while reconciling environmental regulation and economic growth requires handling the relationship between environmental regulation and industrial competitiven...China＇s economic growth is heavily influenced by exports, while reconciling environmental regulation and economic growth requires handling the relationship between environmental regulation and industrial competitiveness well. The effects of environmental regulation on industrial competitiveness are largely subject to the institutional design of environmental regulation. Despite numerous studies on the relationship between environmental regulation and industrial competitiveness, a consensus has yet to be reached. Aside from differences in research methodology, these studies failed to give sufficient consideration to the impact of environmental regulation on industrial competitiveness. Such effects can be negative or positive depending on the design of environmental regulatory policy. This paper has investigated the relationship between environmental regulation and the competitiveness of China＇s iron and steel industry and discovered that tighter environmental regulation does not diminish the competitiveness of the iron and steel industry since the policy design of environmental regulation accommodates the tolerance of advanced production capacity and includes a reasonable cost sharing mechanism. This discovery is of important reference for China to develop rational policy design to balance the relationship between environmental regulation and industrial competitiveness.展开更多
基金financial support from the project "China's Short-term Capital Flows:Scale,Pulling Factors and Impacts," sponsored by the Chinese Academy of Social Sciences
文摘This paper attempts to explain why sterilized intervention was so successful and sustainable in China during the first decade of the 21st century. We argue that the Chinese Government established a sterilization cost-sharing mechanism among the Peoples Bank of China, commercial banks and the househoM sector. On the one hand, Chinese commercial banks have to assume some of the sterilization costs bypurchasing low yield central bank bills and maintaining high levels of required reserves. On the other hand, Chinese households assume some of the sterilization costs by bearing negative real deposit interest rates. The cost- sharing mechanism under financial repression prevents a huge quasi-fiscal loss by the Peoples Bank of China as well as high inflation. However, Chinese households have become victims of this financial repression. Faced with the pressure of changing the growth model from investment-driven to domestic consumption-driven, the interest rate will have to be liberalized eventually, which will, in turn, make sterilized intervention unsustainable.
文摘China＇s economic growth is heavily influenced by exports, while reconciling environmental regulation and economic growth requires handling the relationship between environmental regulation and industrial competitiveness well. The effects of environmental regulation on industrial competitiveness are largely subject to the institutional design of environmental regulation. Despite numerous studies on the relationship between environmental regulation and industrial competitiveness, a consensus has yet to be reached. Aside from differences in research methodology, these studies failed to give sufficient consideration to the impact of environmental regulation on industrial competitiveness. Such effects can be negative or positive depending on the design of environmental regulatory policy. This paper has investigated the relationship between environmental regulation and the competitiveness of China＇s iron and steel industry and discovered that tighter environmental regulation does not diminish the competitiveness of the iron and steel industry since the policy design of environmental regulation accommodates the tolerance of advanced production capacity and includes a reasonable cost sharing mechanism. This discovery is of important reference for China to develop rational policy design to balance the relationship between environmental regulation and industrial competitiveness.
