Review of International Economics
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.
Ito, H. and Volz, U. (2013), China and Global Imbalances from a View of Sectorial Reforms. Review of International Economics, 21: 57–71.