International financial adjustment is the process whereby valuation shifts from asset price and currency changes result in relatively durable net wealth transfers across countries＇ international balance sheets. Thisp...International financial adjustment is the process whereby valuation shifts from asset price and currency changes result in relatively durable net wealth transfers across countries＇ international balance sheets. Thispaper applies a financial valuation approach to estimate the direction and the broad extent of recent international financial adjustments on China international balance sheet. We estimate China＇s international balance sheet losses resulting from the valuation shifts over the period 2005 2010 and reveal that international currency shifts over the past decade have also generated a range of non-balance sheet financial and monetary adjustment pressures for China. This paper also evaluates how China＇s evolving international financial policy arrangements could better mitigate China＇s exposure to international financial adjustments. These arrangements include a more effective currency mechanism and the mechanisms to internationalize the RMB to buffer international financial valuation shocks展开更多
At present China’s foreign assets are mainly denominated in foreign currencies,while a large part of foreign liabilities are denominated in domestic currency.Under this situation,the appreciation of domestic currency...At present China’s foreign assets are mainly denominated in foreign currencies,while a large part of foreign liabilities are denominated in domestic currency.Under this situation,the appreciation of domestic currency tends to have negative effects on net foreign assets through the valuation effect channel.This article gives a quantitative estimation of the scale of valuation effects in China and the research results show that the valuation effects in China are negative in the 20 years from 1982 to 2012.Furthermore,the scale of valuation effects has been increasing,which has lowered the scale of China’s net foreign assets.This paper also gives an estimation of the structure of the value effects,and finds that the volatility and the scale of asset price-related valuation effects are larger than that of exchange rate-related valuation effects.The results also show that the exchange rate has played a more and more important role in the fluctuation of value effects.Finally,this paper establishes an econometric model to value the function of valuation effects in the external adjustment and the results show that,during the period of 1981-2012,the role of valuation effects in China’s external adjustment were quite limited,but since 2007,valuation effects have played a more and more important role.展开更多
文摘International financial adjustment is the process whereby valuation shifts from asset price and currency changes result in relatively durable net wealth transfers across countries＇ international balance sheets. Thispaper applies a financial valuation approach to estimate the direction and the broad extent of recent international financial adjustments on China international balance sheet. We estimate China＇s international balance sheet losses resulting from the valuation shifts over the period 2005 2010 and reveal that international currency shifts over the past decade have also generated a range of non-balance sheet financial and monetary adjustment pressures for China. This paper also evaluates how China＇s evolving international financial policy arrangements could better mitigate China＇s exposure to international financial adjustments. These arrangements include a more effective currency mechanism and the mechanisms to internationalize the RMB to buffer international financial valuation shocks
基金This project is funded by National Social Science Fund,China(10CJL037)the Research Fund of School of Economics,PKU.
文摘At present China’s foreign assets are mainly denominated in foreign currencies,while a large part of foreign liabilities are denominated in domestic currency.Under this situation,the appreciation of domestic currency tends to have negative effects on net foreign assets through the valuation effect channel.This article gives a quantitative estimation of the scale of valuation effects in China and the research results show that the valuation effects in China are negative in the 20 years from 1982 to 2012.Furthermore,the scale of valuation effects has been increasing,which has lowered the scale of China’s net foreign assets.This paper also gives an estimation of the structure of the value effects,and finds that the volatility and the scale of asset price-related valuation effects are larger than that of exchange rate-related valuation effects.The results also show that the exchange rate has played a more and more important role in the fluctuation of value effects.Finally,this paper establishes an econometric model to value the function of valuation effects in the external adjustment and the results show that,during the period of 1981-2012,the role of valuation effects in China’s external adjustment were quite limited,but since 2007,valuation effects have played a more and more important role.
