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Review of International Economics

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Economic reform -- China, China -- Economic policy, Balance of payments -- China, Economic forecasting


This paper examines the impact of sectorial reforms on current account imbalances, with a special focus on China. In particular, we investigate to what extent reforms pertaining to the financial sector, social protection, and healthcare may contribute to a rebalancing of China’s persistent current account imbalances. Our forecasting results suggest that reforming the financial sector would be a significant contributor to the country’s rebalancing with an effect much larger than that of capital account liberalization. Strengthened provisions of social protection and publicly-funded healthcare are also found to contribute to a rebalancing of the Chinese economy.


This article was published in a free special issue of Review of International Economics. Copyright 2013 Blackwell Publishing.

Supplementary material includes the authors pre-print version of the published article.

The working paper version of this article has been circulated as Asian Development Bank Institute working paper No. 393.



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ito_china.pdf (1192 kB)
Authors pre-print