China’s Growing Influence on Asian Financial Markets
Electronic Access:
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Summary:
This paper finds that financial spillovers from China to regional markets are on the rise. The main transmission channel appears to be trade linkages, although direct financial linkages are playing an increasing role. Without an impact on global risk premiums, China’s influence on regional markets is not yet to the level of the United States, but comparable to that of Japan. If China-related shocks are coupled with a rise in global risk premiums, as in August 2015 and January 2016, spillovers to the region could be significantly larger. Over the medium term, China’s financial spillovers could rise further with tighter financial linkages with the region, including through the ongoing internationalization of the renminbi and China’s capital account liberalization.
Series:
Working Paper No. 2016/173
Subject:
Currency markets Emerging and frontier financial markets Financial markets Financial sector policy and analysis Global financial crisis of 2008-2009 Securities markets Spillovers Stock markets
English
Publication Date:
August 12, 2016
ISBN/ISSN:
9781475525137/1018-5941
Stock No:
WPIEA2016173
Pages:
37
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