Neither a borrower nor a lender: Does China's zero net foreign asset position make economic sense?

• 成果类型: Article
• 署名作者: Dollar, David; Kraay, Aart
• 署名单位: The World Bank
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2006.05.003
• 发表日期: 2006
• 页码: 943-971
• 关键词: china; net foreign assets; current accounts

摘要

China in the past few years has emerged as a net foreign creditor on the international scene with net foreign assets (NFAs) slightly greater than 0% of wealth. This is surprising given that China is a relatively poor country with a capital-labor ratio about one-fifth the world average and one-tenth the US level. We ask whether it makes economic sense for China to be a net creditor and what China's NFA position might be in 20 years. We calibrate a theoretical model of international capital flows featuring diminishing returns, production risk, and sovereign risk. Our calibrations for China yield a predicted NFA position of -17% of China's wealth. We also estimate non-structural cross-country regressions of determinants of NFAs in which China is always a significant outlier with around 9% points more of NFAs relative to wealth than is predicted by its characteristics. We speculate that a variety of domestic distortions account for these deviations from the theory and cross-country empirics. We calibrate and predict different-and necessarily speculative-scenarios out to 2025, assuming that China's NFA position eventually conforms with the theoretical and cross-country regularities. Our scenarios suggest a future negative NFA position between 3% and 9% of wealth. Starting from China's zero NFA position, it would take current account deficits in the range of 2-5% of GDP to reach any of these future NFA positions. These are not unreasonable deficits, but they would require a large adjustment from the present 6% of GDP current account surplus. (c) 2006 Elsevier B.V. All rights reserved.