The International Financial Integration of China and India

Three main features characterize the international financial integration of China and India. First, while only having a small global share of privately-held external assets and liabilities (with the exception of China's foreign direct investment liabilities), these countries are large holders of official reserves. Second, their international balance sheets are highly asymmetric: both are "short equity, long debt." Third, China and India have improved their net external positions over the past decade although, based on their income level, neoclassical models would predict them to be net borrowers. Domestic financial developments and policies seem essential in understanding these patterns of integration. These include financial liberalization and exchange rate policies, domestic financial sector policies, and the impact of financial reform on savings and investment rates. Changes in these factors will affect the international financial integration of China and India (through shifts in capital flows and asset and liability holdings) and, consequently, the international financial system.

Bibliographic Details

Main Authors:	Lane, Philip R., Schmukler, Sergio L.
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	World Bank, Washington, DC 2007-02
Subjects:	ACCOUNTABILITY, ASSETS, AUTONOMOUS MONETARY POLICY, AUTONOMY, BALANCE SHEET, BALANCE SHEETS, BANK LOANS, BANKING SECTOR, BANKING SYSTEM, BANKS, BENCHMARK, BONDS, CAPITAL ACCOUNT, CAPITAL ACCOUNT LIBERALIZATION, CAPITAL ACCOUNT RESTRICTIONS, CAPITAL CONTROLS, CAPITAL FLOWS, CAPITAL GAINS, CAPITAL INFLOWS, CAPITAL OUTFLOWS, CAPITALIZATION, CASH FLOW, CASH FLOWS, COMMODITY PRICES, COMPOSITION OF CAPITAL INFLOWS, CONSUMER CREDIT, CONSUMER DURABLES, CORPORATE GOVERNANCE, CURRENCY APPRECIATION, CURRENT ACCOUNT, CURRENT ACCOUNT BALANCE, CURRENT ACCOUNT DEFICIT, CURRENT ACCOUNT DEFICITS, DEBT, DEBT CRISIS, DEBT FLOWS, DEFICITS, DEPOSITS, DIVIDEND POLICY, DIVIDENDS, DOLLAR DEPOSITS, DOMESTIC BANKING SECTOR, DOMESTIC BANKS, DOMESTIC BOND MARKET, DOMESTIC CAPITAL, DOMESTIC CAPITAL MARKETS, DOMESTIC FINANCIAL INTERMEDIATION, DOMESTIC FINANCIAL MARKET, DOMESTIC FINANCIAL MARKETS, DOMESTIC FINANCIAL SECTOR, DOMESTIC FINANCIAL SYSTEM, DOMESTIC FINANCIAL SYSTEMS, DOMESTIC RESIDENTS, DOMESTIC SAVINGS, ECONOMIC COOPERATION, ECONOMIC OUTLOOK, ECONOMIC PERFORMANCE, ECONOMIC RELATIONS, EMERGING MARKET ECONOMIES, EMPLOYMENT, EQUITY INFLOWS, EQUITY MARKET, EQUITY MARKETS, EXCHANGE RATE, EXCHANGE RATE REGIME, EXCHANGE RATES, EXPORTS, EXTERNAL ASSETS, EXTERNAL CAPITAL, EXTERNAL DEBT, EXTERNAL FINANCE, EXTERNAL FINANCING, EXTERNAL POSITION, EXTERNAL POSITIONS, FEDERAL RESERVE BANK, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL DEEPENING, FINANCIAL DEPTH, FINANCIAL DEVELOPMENT, FINANCIAL INSTITUTIONS, FINANCIAL INTEGRATION, FINANCIAL INTERMEDIATION, FINANCIAL LIBERALIZATION, FINANCIAL MARKET DEVELOPMENT, FINANCIAL MARKETS, FINANCIAL REFORM, FINANCIAL SECTOR, FINANCIAL SUPPORT, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FIXED ASSET, FLOW OF CAPITAL, FOREIGN CURRENCY, FOREIGN DIRECT INVESTMENT, FOREIGN INVESTMENT, FOREIGN INVESTORS, FOREIGN PORTFOLIO, FOREIGN PORTFOLIO INVESTMENT, FOREIGN RESERVES, GDP, GLOBAL ECONOMY, GLOBAL FINANCIAL SYSTEM, GOVERNMENT BOND MARKETS, GOVERNMENT BONDS, GROSS DOMESTIC PRODUCT, GROWTH RATES, INSTITUTIONAL INVESTORS, INSURANCE, INTEREST RATE, INTEREST RATES, INTERNATIONAL BOND ISSUES, INTERNATIONAL CAPITAL, INTERNATIONAL CAPITAL FLOWS, INTERNATIONAL FINANCIAL CRISES, INTERNATIONAL FINANCIAL INTEGRATION, INTERNATIONAL FINANCIAL SYSTEM, INTERNATIONAL INVESTMENT, INTERNATIONAL INVESTORS, INTERNATIONAL MARKETS, INTERNATIONAL MONETARY FUND, INTERNATIONAL STANDARDS, INVESTMENT DECISIONS, INVESTMENT FLOWS, INVESTMENT RATE, INVESTMENT RATES, MARKET CAPITALIZATION, MINORITY SHAREHOLDERS, MONETARY POLICY, NEOCLASSICAL MODELS, NET DEBT, NET EQUITY, NET EXTERNAL POSITIONS, NET FOREIGN ASSETS, OPPORTUNITY COSTS, PARENT COMPANY, PORTFOLIO, PORTFOLIO INVESTMENT, PORTFOLIO INVESTMENTS, PORTFOLIOS, PRIVATE BONDS, PRIVATE CAPITAL, PRIVATE CAPITAL INFLOWS, PRIVATE FIRMS, PRIVATE INVESTMENT, PRIVATE SECTOR, PROPERTY RIGHTS, PROTECTIONISM, PUBLIC INVESTMENT, RAPID EXPANSION, RESERVE ASSETS, RETAINED EARNINGS, SAVINGS, SAVINGS RATES, SOURCE OF INVESTMENT FINANCE, STOCK MARKET, STOCK MARKETS, TAX INCENTIVES, VALUATION,
Online Access:	http://documents.worldbank.org/curated/en/2007/02/7367719/international-financial-integration-china-india http://hdl.handle.net/10986/7168
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