1. Research
  2. Products & Topics
  3. Periodicals
  4. Further research articles

China’s financial integration into the world economy: Scrutinising China’s international investment position

November 23, 2011
Chinese assets and liabilities have been steadily increasing from 2004 to 2010, congruent with China's economic ascendency and trade integration with the rest of the world. China today is already the world’s second largest net creditor, which, in theory, is an anomaly for a developing country. We look at possible scenarios for China and the world economy until 2015. In all of them, China will continue to accumulate FX reserves, and reserve assets will remain the largest component of China’s overall foreign assets, but the pace of accumulation is likely to slow down. The financial integration of China into the rest of the world will really take off only when portfolio investments are liberalised more boldly compared to the “stop-and-go” approach of recent years. [more]

More documents contained in "Further research articles"

55 Documents
March 1, 2018
3
In the fourth part of our series on the impact of rising yields, we discuss the rising incidence of zombie firms in recent years. Bottom-up data of some 3,000 companies in the FTSE All World index show that the percentage of zombie firms has more than tripled to 2.0% of firms in 2016 from 0.6% in 1996. Such firms are defined as those with an interest coverage ratio under 1x for 2 consecutive years and a price to sales ratio under 3x. That matters because zombie firms are linked to fading business dynamism and because years of low interest rates should have led to fewer such firms, not more. There are early signs we are at a turning point, however. The numbers for 2017, with two-thirds of firms reporting, suggest that zombie firm incidence declined sharply last year. If this proves to be a real trend, it may give central banks confidence that continuing to raise rates and pull away from unconventional monetary policy will have some advantages. [more]
January 25, 2018
4
The lead market commentator of the Financial Times this morning writes that the dollar sell-off has “stopped making sense”. Indeed, viewed with the post-crisis lens of activist central banks and exceptionally tight correlations between FX and rates the dollar is entirely out of line with fundamentals. But currency moves over the medium-term ultimately boil down to one thing: flows. If inflows into an economy pick up the currency strengthens and vice versa. Looked at from a flow perspective, the dollar bear market makes complete sense: our outlook for FX 2018 argued that the flow picture is exceptionally supportive for EUR/USD and this positive dynamic is currently playing out. [more]
May 24, 2016
Analyst:
8
The tremendous growth momentum in high-frequency trading seems to have reached its limits in recent years. The increasing cost of infrastructure and relentless competition within the industry are probably the first to blame. In addition, high-frequency trading firms are hardly participating in those dark pools where large block transactions are executed. Both trends are challenging their business model and trading strategies as high-frequency traders have seen their revenues and profits erode. Furthermore, forthcoming tighter prudential regulatory oversight may lead to an overhang of capacity in the high-frequency trading industry. [more]
December 14, 2015
Region:
9
The quality of the business environment is a key driver of countries’ economic development. “Good rules” foster market functioning, increase efficiency, and encourage entrepreneurial activity. The quality of the business environment affects firms’ activities and success. It also matters for economies’ competitiveness, their attractiveness for investments and ultimately growth (prospects). [more]
September 21, 2015
Region:
12
In German corporate lending business, the role played by the different banking groups varies considerably between individual industries. For instance, a relatively large share of loans to the manufacturing sector – and particularly the "core" of German industry, mechanical engineering and automotives – is provided by commercial banks. Lending to construction and agricultural firms, on the other hand, is dominated by savings banks and cooperative banks. The retail banks have also gained significant ground in the services sector over the past 10 years. Landesbanks have only two strongholds, utilities/mining and transport. [more]
12.1.0