756S. Nozdrev, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation (nozdrev-sv@imemo.ru)
Abstract. The article deals with the current position of China in the global financial system. The main factors determining the place of China in international capital flows, its position as the place for and the source of foreign direct investment, the performance of Chinese banks in the cross-border transactions, the development of the securities market and international investment funds are analyzed. China’s transnational development strategy is aimed at creating a balance between domestic and transnational business. Using available resources of national and foreign currencies local banks are keen to promote their business with foreign banks inside China itself and further develop cooperation beyond its borders. The internationalization of China's securities market is associated with the expansion of the two main stock exchanges – in Shanghai and Shenzhen, as well as with the increase of foreign investors’ participation in the Chinese bonds issued in Yuan (RMB). One of promising directions for capital market’s development is the program Stock Connect aimed at greater integration of the national capital market into the global economy. These processes are to produce a basis for the eventual introduction of full international convertibility of the Chinese currency and, respectively, more flexible access to domestic and foreign capital resources, for the development of offshore centers and for the growth of Chinese financial assets abroad. At the same time, in many respects the country still lags behind the leading developed countries. Despite the world's largest accumulation ratio, China does not yet established itself as a major payer at the international capital market. Despite the increase in both incoming foreign direct investment into China's economy and its own outward FDI, the total volume of investment is still below the level of the United States. Currently, the incoming foreign direct investment in China (including Hong Kong) account for 49% of that of the United States and the outward FDI – 31%. According to the author conclusion, the significant discrepancies in the structures of foreign assets and liabilities seriously reduce the profitability of the international operations of China. The estimated yield on the Chinese outward investments is about 3% against 5.6% on the incoming ones.
Keywords: China, global financial system, balance of payments, cross-border capital movement, direct investment, securities market, internationalization, liberalization
REFERENCES
1. Claus I., Oxley L., eds. China's Economy: A Collection of Surveys. Surveys of Recent Research in Economics. New York, Wiley-Blackwell, 2015. 208 p.
2. Chow G.C. Interpreting China’s Economy. Singapore, World Scientific Publishing Co., 2010. 300 p.
3. Chi Khung Kvan. Inward and Outward Openess Financial Reforms. The Journal of China New Economic Theory, 08.06.2015. (In Jap.)
4. China’s Investment Balance Nears Turning Point. Global Times, 28.08.2014. Available at: http://www.ecns.cn/business/2014/09-28/136506.shtml (accessed 20.01.2016).
5. Wang L., ed. Rising China in the Changing World Economy. London, Routledge, 2011. 448 p.
6. China Foreign Exchange Reserves. Available at: http://www.tradingeconomics.com/china/foreign-exchange-reserves (accessed 20.02.2016).
7. China Became a Financial Powerhouse, RIETI, 17.07.2015. (In Jap.) Available at: http://www.rieti.go.jp (accessed 20.01.2016).
8. Inward FDI Still Mutually Beneficial in China. East Asia Forum. May 12, 2015. Available at: http://www.eastasiaforum.org.shtml (accessed 20.01.2016).
9. OECD, 2008. OECD Benchmark Definition of Foreign Direct Investment, pp. 24-25.
10. UNCTADSTAT, Foreign Direct Investment: Inward and Outward Flows and Stock, Annual, 1980–2014. Available at: http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=96740 (accessed 20.11.2015.)
11. World Investment Report 2015. Reforming International Investment Governance. New York, Geneva, UNCTAD, 2015. 214 p. Available at: http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=1245.shtml (accessed 20.02.2016).
12. Chinese Investment in Developed Countries. London, The Economist Intelligence Unit, 2015. Available at: https://www.hsbc.am/1/PA_esf-ca-app-contentent/armenia/business/announcement/pdf/ForesightEIUGlobalisationReport.pdf (accessed 20.02.2016).
13. Asian Giants. Economic Models in Contest. Deutsche Asset & Wealth Management Investment, May 2015. 21 p. Available at: http://news.cision.com/deutsche-asset-wealth-management/r/asian-giants-economic-models-in-contest,c9766662 (accessed 20.02.2016).
14. Mergermarket. 2015. http://www.mergermarket.com/info/2015/03/19/us-china-increase-investments-german-ma-market.
15. K. Zhong. Deal-Level Examination of China’s Outbound M&A in the US (2002–2014). Available at: https://www.johnson.cornell.edu/Emerging-Markets-Institute/Research/EMI-at-Work/Institute-at-Work-Article/ArticleId/39789/Deal-Level-Examination-of-China-s-Outbound-M-A-in-the-US-2002-2014-1 (accessed 20.01.2016).
16. US Department of Treasury. Available at: http://ticdata.treasury.gov/Publish/mfh.txt (accessed at 20.11.2015).
17. Chinese Balance of Payments as Seen from the Development Point of Stage Theory. RIETI, 17.07.2015. (In Jap.) Available at: http://www.rieti.go.jp (accessed 20.01.2016).
18. China’s Foreign Assets More Than Half Its GDP. Forbes, 07.04.2014. Available at: http://www.forbes.com/forbes/welcome (accessed 20.01.2016).
19. Timewell S. A Shifting Balance in World Financial Power. Available at: http://www.global-briefing.org/2010/09/a-shifting-balance-in-world-financial-power (accessed 20.03.2016).
20. China's Banks Branch out on a Global Scale. Intheblack,10.09.2014. Available at: http://intheblack.com/articles/2014/09/10/chinas-banks-branch-out-on-a-global-scale (accessed 20.01.2016).
21. ICBC Interim Report. 21.09.2015. Available at: http://v.icbc.com.cn/userfiles/Resources/ICBCLTD/download/2015/22015InterimReport20150921.pdf (accessed 20.02.2016).
22. Zhen Y. China’s Capital Markets. Oxford, Chandos Publishing, 2013. 298 p.
23. Strategic plan of 2020 for Shanghai Stock Exchange. Nomura Capital Markets, Quoterly, Winter, 2011. (In Jap.) Available at: https://www.nri.com/jp (accessed 20.01.2016).
24. Getting to Know Shanghai-24. Getting to Know Shanghai-Hong Kong Stock Connect and the Mainland Stock Market. EC Investor Education Centre, 16.02.2015. Available at: http://www.goldmansachs.com/our-thinking/pages/stock-connect (accessed 20.02.2016).
25. Foreign Investors Trim Holdings of Chinese A-share. Pensions&Investment, 12.01.2015. Available at: http://www.pionline.com/article/20150112/PRINT/301129989/foreign-investors-trim-holdings-of-chinese-a-shares (accessed 20.01.2016).
26. Gazprom Wants to Hold an IPO on Chinese Stock Market. Kommersant, 03.02.2015 (In Russ.) Available at: https://www.google.ru/?gfe_rd=ctrl&ei=mBUGU-+03.02.2015 (accessed 20.01.2016).
27. Nikkei Weekly, 18.09.2014. Available at: http://asia.nikkei.com/search/findByRegion?facet_region=4 (accessed 20.01.2016).
28. China‘s CIC Gearing up in Overseas Assets. The Wall Street Journal, 27.03.2015. Available at: http://www.finanzen.net/nachricht/aktien/The-Wall-Street-Journal-27-03-2015 (accessed 20.03.2016).
29. Russian Fund of Direct Investment. TASS, Praim, 20.11.2014 (In Russ.) Available at: http://rdif.ru/NewsFond/year/2014/page/3 (accessed 20.03.2016).
30. “Uralkalii” Received a Chinese Accent. Kommersant, 25.09.2013 (In Russ.) Available at: http://www.kommersant.ru/doc/2304302 (accessed 20.01.2016).
Registered in System SCIENCE INDEX
No comments