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Despite an attractive interest rate differential between China and foreign countries, existing capital control might prevent currency carry trade strategies to be executed. We focus on the copper market to study if trades are taken in order to execute carry trade strategies. We find that copper value is related to carry trade through the onshore-of...
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In the context of global economic integration, the United States, as a major world economic power, the adjustment and change of its monetary policy is of great significance to the fluctuation of the RMB exchange rate. By studying the characteristics of the Fed's QE (quantitative easing) monetary policy, this paper analyses its impact on internation...
Citations
The Chinese government’s 2008 fiscal stimulus resulted in a surge of liquidity flowing into the country’s shadow banking system. The paper focuses on two financing channels: the Fanya Metal Exchange and the commodity collateral financing market, which are paradigmatic for the unintended consequences of this credit bubble. The opacity of these markets and the assumption that asset prices would rise indefinitely incentivized widespread fraud that eventually impacted global metals markets and roiled China’s economy. These two cases elucidate the complexity of China’s financialized commodity markets, the spatially variegated consequences of credit bubbles and the fragile foundations of China’s post-2008 growth.
