China's Large and Rising Net Foreign Asset Position

Guonan Ma and Haiwen Zhou

China & World Economy, 2009, vol. 17, issue 5, pages 1-21

Abstract: China's emergence as a major player in world trade is well known, but its growing role in global finance might have been underappreciated. China is the second largest creditor in the world today, with a net creditor position of 30 percent of GDP in 2008. We test the importance of the growth differential, demographics, government debt, financial depth and the exchange rate in shaping China's net foreign asset position. Our empirical results highlight the sharp fall in the young-age dependence as one key driver behind China's puzzlingly large net lender position and also confirm the neoclassical prediction that faster growth attracts more capital inflows. Looking ahead, our findings suggest that China will unlikely turn into a meaningful net debtor nation over the next two decades. Copyright (c) 2009 The Authors Journal compilation (c) 2009 Institute of World Economics and Politics, Chinese Academy of Social Sciences.

Date: 2009

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1749-124X.2009.01163.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bla:chinae:v:17:y:2009:i:5:p:1-21

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1671-2234

Access Statistics for this article

China & World Economy is edited by Yongding Yu

More articles in China & World Economy from Institute of World Economics and Politics, Chinese Academy of Social Sciences
Series data maintained by Christopher F. Baum ().