Research Briefing | Apr 14, 2021

China | Why China’s subsidy to the world is likely to endure

Why_Chinas_subsidy_to_the_world_is_likely_to_endure_Page_1-1

China is a significant net creditor to the rest of the world. At the end of 2020, its foreign assets totaled US$8,704 billion, or 59.1% of GDP, compared with foreign liabilities of US$6,554 billion, or 44.5% of GDP. 

Nonetheless, earnings on foreign liabilities (foreign capital in China) substantially exceed those on foreign assets (China’s investment abroad). In fact, the average rate of return of 6.0% on inbound capital in 2020 was double that on outbound capital.

Download the report to find out:

  • Why is the gap in return so large?
  • Will the yield gap narrow?
  • Will China’s foreign assets and liabilities continue to rise?
Back to Resource Hub

Related Services

Seoul, South Korea

Post

BoK’s monetary policy to tighten even as hiking cycle ends

Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.

Find Out More
China Shenzhen skyline

Post

Why China isn’t about to save the world economy

The earlier and faster than expected ending of zero-Covid restrictions in China bodes well for the global economy and adds to the recent run of positive news.

Find Out More