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Safeguarding Banks and Containing Property Booms : Cross-Country Evidenceon Macroprudential Policies and Lessons From Hong Kong SAR
Authors: ---
ISBN: 1463965885 1463998686 1283554836 9786613867285 1463960638 Year: 2011 Publisher: Washington, D.C. : International Monetary Fund,

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We assess the effectiveness of macroprudential policies against a number of different indicators of property sector activity and financial stability. At the cross-country level the use of LTV caps decelerates property price growth. Both LTV and DTI caps slow property lending growth. LTV caps also affect a broader range of financial stability indicators in economies with pegged exchange rates and currency boards. For Hong Kong SAR, LTV policy tends to be forward looking, with caps lowered to counter downward movements in mortgage rates, and higher growth in mortgage loan and volumes of transactions. The reduction in caps appears to respond to small and medium size flat price appreciation, and contributes to a decline in high-end volume growth after a year and total transactions volume growth after 1½?2 years. Price growth responds favorably after 2 years. The evidence suggests LTV tightening could affect property activity through the expectations channel rather than through the credit channel.


Book
De-Monopolization toward Long-Term Prosperity in China
Authors: ---
ISBN: 1475596243 1475530641 Year: 2012 Publisher: Washington, D.C. : International Monetary Fund,

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During the past decade, the average Chinese earns roughly 9 times less and is 10 times less productive than the average American at purchasing power parity. Current consensus attributes large differences in output per worker to differences in total factor productivity (TFP). Evidence suggests that most of the US-China TFP differences lie in the inefficiency of China's domestic-oriented service and agricultural sectors. This paper focuses on (1) the evidence of monopoly rights and its influence on work practice improvement at China's firms and plants and (2) the evidence that policy arrangement there has encouraged more competition in merchandise manufacturing and heavy industries while barriers to market access remain high against new firms in the domestic market (especially in services). A numerical experiment is provided, which suggests that China can enhance long-term income per capita by a factor of 10 largely through TFP gains by implementing reform to weaken protection of monopolies and encourage entry in all industries.


Book
Are house prices rising too fast in China?
Authors: ---
ISBN: 1462370861 1455299278 1283565609 9786613878052 1455211575 Year: 2010 Publisher: Washington, D.C. : International Monetary Fund,

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Sharp increase in house prices combined with the extraordinary Chinese lending growth during 2009 has led to concerns of an emerging real estate bubble. We find that, for China as a whole, the current levels of house prices do not seem significantly higher than would be justified by underlying fundamentals. However, there are signs of overvaluation in some cities’ mass-market and luxury segments. Unlike advanced economies before 2007-8, prices have tended to correct frequently in China.Given persistently low real interest rates, lack of alternative investment and mortgage-to-GDP trend, rapid property price growth in China has, and will continue to have,a structural driver.


Book
Investment-led growth in China
Authors: --- ---
ISBN: 1475524951 1475556411 1475528000 1475515057 1283947633 9781475515053 9781475556414 9781475528008 9781283947633 Year: 2012 Volume: WP/12/267 Publisher: [Washington, D.C.] International Monetary Fund

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Over the past decade, China’s growth model has become more reliant on investment and its footprint in global imports has widened substantially. Several economies within China’s supply chain are increasingly exposed to its investment-led growth and face growing risks from a deceleration in investment in China. This note quantifies potential global spillovers from an investment slowdown in China. It finds that a one percentage point slowdown in investment in China is associated with a reduction of global growth of just under one-tenth of a percentage point. The impact is about five times larger than in 2002. Regional supply chain economies and commodity exporters with relatively less diversified economies are most vulnerable to an investment slowdown in China. The spillover effects also register strongly across a range of macroeconomic, trade, and financial variables among G20 trading partners.


Book
The spillover effects of a downturn in China's real estate investment
Authors: --- ---
ISBN: 1475549008 1475573537 1475560664 1283866935 1475575157 9781475560664 9781475575156 9781475549003 Year: 2012 Volume: WP/12/266 Publisher: Washington, D.C. International Monetary Fund, Asia and Pacific Dept.

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Real estate investment accounts for a quarter of total fixed asset investment (FAI) in China. The real estate sector’s extensive industrial and financial linkages make it a special type of economic activity, especially where the credit creation process relies primarily on collateral, like in China. As a result, the impact on economic activity of a collapse in real estate investment in China—though a low-probability event—would be sizable, with large spillovers to a number of China’s trading partners. Using a two-region factor-augmented vector autoregression model that allows for interaction between China and the rest of the G20 economies, we find that a 1-percent decline in China’s real estate investment would shave about 0.1 percent off China’s real GDP within the first year, with negative spillover impacts to China’s G20 trading partners that would cause global output to decline by roughly 0.05 percent from baseline. Japan, Korea, and Germany would be among the hardest hit. In that event, commodity prices, especially metal prices, could fall by as much as 0.8–2.2 percent below baseline one year after the shock.


Book
Assessing Country Risk: Selected Approaches
Authors: --- ---
Year: 2017 Publisher: Washington D.C. International Monetary Fund

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Book
Assessing Country Risk: Selected Approaches
Authors: --- ---
ISBN: 1513539639 Year: 2017 Publisher: Washington D.C. International Monetary Fund

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Book
Are house prices rising too fast in Hong Kong SAR?
Authors: --- --- ---
ISBN: 1462333532 1455297259 1283559234 9786613871688 1455211567 Year: 2010 Publisher: Washington, D.C. : International Monetary Fund,

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Sharp increase in house prices in Hong Kong SAR in 2009-2010 has led to concerns of an emerging real estate bubble. According to our measure of price deviation from fundamentals, which should be taken as an early warning indicator of market exuberance, the current level of house prices in Hong Kong SAR does not seem to be significantly higher than would be justified by underlying fundamentals. Moreover, unlike advanced economies before 2007-8, deviation from fundamentals has not been persistent in Hong Kong.Going forward, low interest rate and improving growth prospects, as well as a tight supply, particularly in the mass market, means that house price growth will continue to be strong.This is the period in which vulnerability may be accumulating, and tight prudential standards and fiscal measures will be required to tame price inflation.


Book
Trade and Financial Spilloveron Hong Kong SAR from a Downturn in Europe and Mainland China
Authors: --- ---
ISBN: 1475558856 1475506376 Year: 2012 Publisher: Washington, D.C. : International Monetary Fund,

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Hong Kong SAR was hit hard by the global financial crisis, which started out in the U.S. and spilled over to the rest of the world. Three years later, vulnerabilities in the euro area's financial system and concerns over a hard landing in Mainland China have started to weigh on Hong Kong's growth prospects. Against this backdrop, this paper aims to quantify the trade and financial spillovers on Hong Kong SAR's economy from a downturn in the euro area and Mainland China. Based on simulations using a version of the Global Integrated Monetary and Fiscal (GIMF) model and a Global VAR (GVAR) that includes both balance sheet and standard macroeconomic indicators, Hong Kong SAR's output growth could fall by as much as 1½ times the decline in euro area output growth given its high dependence on external trade and many links with the global financial system. A worsening of the crisis in the euro area could reduce Hong Kong SAR's output by as much as 4-4½ percent below baseline during the first two years after the shock, pushing Hong Kong SAR back into recession and possible deflation. In the event of a hard landing in China, the model simulations suggest that Hong Kong SAR would be on a sustained downturn with output growth falling by about 3 percentage points below baseline in the first two years. Should these events materialize, countercyclical fiscal response could help cushion, but not fully offset, the impact of slower growth in the euro area or China.

Keywords

Financial crises --- International finance. --- International monetary system --- International money --- Finance --- International economic relations --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Crises --- Econometric models. --- Hong Kong (China) --- Hong Kong Special Administrative Region (China) --- Xiang gang te bie xing zheng qu (China) --- 香港特別行政區 (China) --- Zhonghua Renmin Gongheguo Xianggang Tebie Xingzhengqu --- Chung-hua jen min kung ho kuo Hsiang-kang tʻe pieh hsing cheng chʻü --- Zhong hua ren min gong he guo Xiang gang te bie xing zheng qu --- 中華人民共和國香港特別行政區 --- HKSAR (China) --- Hsiang-kang tʻe pieh hsing cheng chʻü (China) --- Xianggang (China) --- 香港 (China) --- Xianggang Tebie Xingzhengqu (China) --- Hong Kong S.A.R. (China) --- Hong Kong --- Economic conditions --- Banks and Banking --- Labor --- Macroeconomics --- Money and Monetary Policy --- Financial Risk Management --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Financial Crises --- Labor Demand --- Banking --- Monetary economics --- Economic & financial crises & disasters --- Labour --- income economics --- Credit --- Private consumption --- Global financial crisis of 2008-2009 --- Self-employment --- Money --- National accounts --- Consumption --- Banks and banking --- Economics --- Global Financial Crisis, 2008-2009 --- Self-employed --- Hong Kong Special Administrative Region, People's Republic of China


Book
An End to China’s Imbalances?
Authors: --- --- --- --- --- et al.
ISBN: 1475577893 1475592973 Year: 2012 Publisher: Washington, D.C. : International Monetary Fund,

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Global imbalances have been a central theme of the international economic policy debate for much of the last decade, prompted by large and sustained current account deficits in the U.S. and counterpart surpluses in China, Germany, and among many of the oil producers. This paper focuses on the current state of the external imbalance in China, examining the factors underlying the post-2008 drop in China’s current account surplus and analyzing the prospects for the external surplus going forward. The paper finds that China’s current account surplus should remain modest in the coming years. However, despite the fact that China’s medium-term current account is likely to stay below its pre-crisis range, it is too early to conclude that "rebalancing" has been truly achieved in China. While imbalances do not currently seem to be manifesting themselves as a feature of China’s external accounts, the evidence increasingly points to a rising domestic imbalance as growth becomes increasingly dependent on very high levels of investment.

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