China expected to fully open up capital account soon
- By Chen Boyuan
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E-mail China.org.cn, February 22, 2014
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| Prof. Tu Yonghong, Deputy Director of the IMI at RUC, also a principle contributor to the report, delivers a keynote speech at the launch of the report. [Photo by Chen Boyuan / China.org.cn] |
![Prof. Tu Yonghong, Deputy Director of the IMI at RUC, also a principle contributor to the report, delivers a keynote speech at the launch of the report. [Photo by Chen Boyuan / China.org.cn]](http://images.china.cn/attachement/jpg/site1007/20140222/d02788e9b72614728bd14a.jpg "Prof. Tu Yonghong, Deputy Director of the IMI at RUC, also a principle contributor to the report, delivers a keynote speech at the launch of the report. [Photo by Chen Boyuan / China.org.cn]")
Meanwhile, despite being the world's largest exporter, China has exhibited the Lewis Turning Point, a sign to mean that China's biggest advantage, low labor cost, is disappearing, which will directly affect China's exports, according to Prof. Tu Yonghong, Deputy Director of the IMI at RUC, also a principle contributor to the report.
But China is holding a firm attitude towards capital account liberalization and has established a gradual liberalization model that is compatible with economic development and financial market liberalization, Ms. Tu said.
"If there is no stimulus for exports, its [exports] contribution to China's growth will shrink, and unemployment will soar," Tu said, adding that the relaxation of the capital account would instantly ease inflation, based on the experience of all other countries.
Those who hold reservations regarding opening the capital account mainly fear that China would repeat the 1990's financial disasters felt by its southeast Asian neighbors, including Thailand, the Philippines and Indonesia, because the sudden influx and outflow of hot money would disrupt China's home financial orders.
