NBER

Isha Agarwal

Sauder School of Business
University of British Columbia
869 Henry Angus Building
2053 Main Mall, Vancouver
BC V6T 1Z2
Canada

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: University of British Columbia

NBER Working Papers and Publications

September 2019China’s Impact on Global Financial Markets
with Grace Weishi Gu, Eswar S. Prasad: w26311
We analyze shifts in the structure of China’s capital outflows over the past decade. The composition of gross outflows has shifted from accumulation of foreign exchange reserves by the central bank to nonofficial outflows. Unlocking the enormous pool of domestic savings could have a significant impact on global financial markets as China continues to open up its capital account and as domestic investors look abroad for returns and diversification. We analyze in detail the allocation patterns of Chinese institutional investors (IIs), which constitute the main channel for foreign portfolio investment outflows. We find that, relative to benchmarks based on market capitalization, Chinese IIs underweight developed countries and high-tech sectors in their international portfolio allocations but ...

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