The Impact of Financial Services Trade Liberalization on China

Author Name Li-Gang LIU  (Former Senior Fellow, RIETI)
Creation Date/NO. September 2005 05-E-024
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This paper shows that financial services trade liberalization in China has set impetus for accelerated domestic financial liberalization. Foreign banks, though still relatively small in size, have already exerted considerable influence on China's capital flows. Empirical findings from a gravity model analysis indicate that financial services trade liberalization under the WTO promotes bank loans to developing economies strongly though not evenly conditional on country characteristics.