China s RMB Bilateral Swap Agreements: What explains the choice of countries?

Alicia Garcia-Herrero and Le Xia
Authors registered in the RePEc Author Service: Alicia Garcia Herrero

No 1318, Working Papers from BBVA Bank, Economic Research Department

Abstract: This paper analyzes empirically the determinants behind the choice of countries signing an RMB-denominated Bilateral Swap Agreement (BSA) with China. The gravity motif is predominant (both in terms of country s size and distance from China) but also the trade one, both in terms of exports into China as well as sharing an FTA with China. Institutional soundness also matters since countries which better government and less corruption are more likely to sign an RMB-denominated BSA. This goes against the view that China has used RMB BSAs as a soft power tool in more corrupted countries. However, the fact that China s has a preference for countries with default history and a closer capital account calls for caution.

Keywords: Bilateral Swap Agreements; RMB Internationalization (search for similar items in EconPapers)
JEL-codes: F33 F36 F42 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2013-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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