This course aims at providing an in-depth understanding of the functions and the performance of China’s fiscal, monetary and exchange rate systems, as well as their impact on the economy. After explaining major trends in those changing regimes, their developments in the post-1994 and post-2001 periods are analysed, using theoretical models and econometric techniques to tackle critical issues.

Regarding the fiscal system, the course emphasises topics such as central-local intergovernmental relations, the transition from contracts to tax assignment, and the impact of patterns of taxation and public expenditure on macroeconomic developments and income distribution, amongst others. Sterilization operations for a semi-open monetary regime and increasing flexibility of the exchange rate form the foci for discussion of the challenges facing the People’s Bank of China, on top of the reforms of monetary tools and capital account liberalization.

The reactions and effectiveness of China’s fiscal-monetary mix in alleviating the adverse consequences of the global economic crisis which began to unfold from the fourth quarter of 2008 are to be reviewed. The course ends by an investigation of the evolving financial relations between the Mainland and Hong Kong.