Dr. Jian Yang’s research is helping to influence policy on the financial sector in China with his research as a visiting fellow at People’s Bank of China (PBOC/PBC) last year.
China is on a mission become a stronger player in the game of globalization. With its “One Belt, One Road” (OBOR) policy, Chinese leaders hope to expand trade links between Asia, Africa, and Europe by investing in its Silk Road. With this investment, China also hopes to internationalize its currency (RMB) and solidify its value in the global economy.
“The progress of RMB as an international currency in trade and investment…would be directly affected by the success of Chinese government’s ‘One Belt, One Road’ initiative, which provides excellent outbound FDI opportunities and also outbound M&A opportunities to Chinese companies in many developing countries in Eurasia.”
Dr. Yang also supported the notion that progress is being made towards acceptance of the RMB as an international currency, based on his knowledge of financial trends in emerging markets.
Along with this initiative, a recent working paper by People’s Bank of China (PBOC) recommended that China pay closer attention to the impact non-bank financial institutions have on China’s overall financial stability. As a visiting fellow at PBOC last year, Dr. Yang worked closely on this research together with the chief economist of the research bureau of PBOC, among others. He is the lead author of the working paper, which has received immediate media attention in many countries.
The findings provide context for the importance of these non-bank financial institutions. These institutions include trust and investment companies, and PBOC working paper concluded that they have “considerable influence” on the economy.
The paper also analyzed the impact of China’s financial sector on global major financial sectors, noting Japan in particular as strongly influenced.
Further recommendations from the paper for Chinese policymakers state that “sufficient attention should be given to international spill-over effects of policies.”
Recently these non-financial institutions have increased their activity, despite PBOC recently raising short-term rates in an attempt to lower financial risk and curb leverage in the Chinese economy. In line with the recommendations of this paper, China’s policy leaders are paying closer attention to the influence of these non-bank financial institutions on its overall economy.
The findings of the paper have been featured by the media in English, including Reuters, New York Times, CNBC, US News and World Report, Daily Mail (UK), Yahoo! Finance, the NASDAQ website, and English newspapers in Saudi Arab (Arab News), India (Business Standard), China (Global Times), Malaysia (New Strait Times), Pakistan (Daily Times). The paper has received even more extensive attention in Chinese media in the mainland and overseas, including dozens of Chinese newspapers such as China Securities Journal sponsored by Xinhua News Agency and numerous Chinese news websites.