Summary of China’s Growing Influence on Asian Financial Markets

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China’s Growing Influence on Asian Financial  Markets summary
When China sneezes, the rest of Asia catches a cold – or at least that’s how it seems.

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Whether it’s rattling financial markets or swaying commodity prices, China is a powerful pacesetter in the Asian regional economy. Trade interconnections form the main routes for the cascading economic effects that occur between China and its neighbors, although growing financial system ties among Asian nations also play a part, according to economists Serkan Arslanalp, Wei Liao, Shi Piao and Dulani Seneviratne. Their study presents ideas on how countries in the region can mitigate the amplified risks of destabilization from ever-increasing linkages. getAbstract recommends their comprehensive report to policy makers, executives and investors concerned about the impacts of China-related shocks.

In this summary, you will learn

  • How economic disturbances in China affect other Asian economies,
  • What factors contribute to the spread of China-related shocks and
  • What nations in the region can do to mitigate destabilizing events.
 

Summary

China is undergoing a massive economic transformation as it seeks to reduce its reliance on exports and manufacturing and to emphasize service sectors and domestic consumption. Research suggests that “financial spillovers” – which occur when a disturbance in one market influences asset valuations in...
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About the Authors

Serkan Arslanalp, Wei Liao, Shi Piao and Dulani Seneviratne are economists at the International Monetary Fund.


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