Reigniting the Strength of Opening Up
This shanghai conference was aimed at reviewing the direct and indirect effects of the highly accommodative monetary policies of key advanced economies. The combination of US QE tapering, Japan monetary policy experimentation, the continuing adjustment in the Eurozone, and the slowdown of China as the main driver of global growth have created a new economic and financial landscape demanding a reassessment of risks. Emerging markets have repeatedly indicated that the policies have caused an undue increase in capital flows. Similarly, policy makers have expressed concern that a withdrawal of monetary stimuli could cause abrupt reversals in capital flows thus fuelling exchange rate volatility and upsetting domestic stability. What does the evidence show about the external spillovers of highly accommodative monetary policies on emerging markets? What does this mean for China? Is china moving to a new stage of financial sector reform and how it will cope with this new environment?