Browsing by Author "Garcia-Herrero, Alicia"

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  • Fung, K. C.; Garcia-Herrero, Alicia; Seade, Jesús (2015)
    BOFIT Policy Brief 5/2015
    In this paper, we highlight three characteristics of China-Latin American economic relations. China-Latin American economic relationships are asymmetric, comparative-advantage driven and motivated by both political and economic considerations. There are several co-operative measures on which China and Latin America can focus. China can be encouraged to invest not only in mining in Latin America but also in infrastructure and manufacturing facilities. China and Latin America can deepen their Trans-Pacific production network. Utilizing the advantages of being close to and in the same time zone as the U.S. market, this pan China-Latin America supply chain can be a potent supplier and exporter to the United States.
  • Garcia-Herrero, Alicia; Koivu, Tuuli (2007)
    BOFIT Discussion Papers 6/2007
    Published in Economie Internationale, Volume 116, Issue 4, 2008, Pages 53-92 as China's exchange rate policy and asian trade
    This paper shows empirically that China's trade balance is sensitive to fluctuations in the real effective exchange rate of the renminbi, although the size of the surplus is such that exchange rate policy alone will be unable to address the imbalance. One of the main reasons why the reduction in the trade surplus is limited is that Chinese imports are reduced with a real appreciation of the renminbi.By estimating bilateral import equations, we find that it is imports from other Southeast Asian countries which fall.This result reflects the vertical integration of Southeast Asia with China through the 'Asian production network'.We find, in turn, that imports from Germany - which serve China's domestic demand - behave as one would expect, ie they increase with renminbi real appreciation.All in all, our results raise concerns on the impact of renminbi appreciation on Southeast Asia even if regional currencies do not follow the renminbi's upward trajectory. Keywords: China, trade, exports, real exchange rate JEL classification: F1, F14
  • Garcia-Herrero, Alicia; Xia, Le (2013)
    BOFIT Discussion Papers 12/2013
    Published in Asia-Pacific Journal of Accounting & Economics, Volume 22, Issue 4, 2015 p. 368-383 as RMB Bilateral Swap Agreements: how China chooses its partners?
    This paper analyzes empirically what determines the choice of countries signing an RMB-denominated Bilateral Swap Agreement (BSA) with China. The gravity motif is predominant (both in terms of country size and distance from China) but so is the trade motif, in terms of both exports to China and the existence of an FTA with China. Institutional soundness also matters since countries with better government and less corruption are more likely to sign an RMB-denominated BSA. This contravenes the view that China has used RMB BSAs as a soft power tool in more corrupted countries. However, the fact that China has a preference for countries with a default history and a closed capital account calls for caution. Keywords: RMB internationalization, bilateral swap agreements. JEL: F33, F36, F42
  • Garcia-Herrero, Alicia; Santabárbara, Daniel (2008)
    BOFIT Discussion Papers 11/2008
    We find empirical evidence that the Chinese banking system has benefited from the entry of foreign investors through higher profitability and increased efficiency of the banking system. Foreign participation, which consists of a minority stake in a Chinese bank (in con-trast to the typical pattern in emerging countries), appears to be most effective when the foreign bank acts as a strategic investor. Purely financial investors contribute little, if any-thing, to bank performance. Key words: China, banking system, foreign participation JEL classification: G21, G28 1