China

The current account still matters, but other things do too, and maybe more. In light of recent focus on gross flows, here and elsewhere, I want to argue for the language of the balance of payments. This language has a quaint feel to it, and my sense is that economists view it as archaic and outmoded. I am certain, at least, that one can get through grad school with no fluency in it. Read more

As a seminar focusing on China’s monetary policy, we’ve always been interested in the use of monetary instruments by People’s Bank of China (PBoC). In this posting, we’d like to wrap up the core elements of our past discussions on PBoC instruments.

  Read more

Chinese FX reserves have reached $3.2 trillion. The majority of the FX reserves are accumulated through financial institutions, such as commercial banks, purchases of dollars from corporations and households. As an article in September 26th edition of the South China Morning Post puts it:

Let's look at one of these assets "left on bank balance sheets", an item obscurely classified in the official statistics as "financial institutions position for forex purchases". This category of assets now amounts to 25.3 trillion yuan.

During a recent seminar, we heatedly discussed the following news from the Global Times:

Compared with the end of August, the top four state-owned Chinese banks, including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank, saw total deposit outflows of about 420 billion yuan ($65.63 billion) during the first 15 days of September, according to a report by China Securities Journal on Thursday.

  Read more