Study Group/Discussion: Capital account opening and China’s external balance sheets

​​After four decades of rapid economic growth, China has become the world's second-largest economy and established intricate trade ties with the rest of the world. Nonetheless, China's financial integration is still in its infancy, primarily reflecting restrictions on cross-border financial flows. As the Chinese economy gradually shifts away from exports and towards domestic demand, a more flexible exchange rate regime has been introduced, creating room for capital account liberalization. This study group will examine the impact of capital control and financial development on China’s external balance sheets. By looking at cross-country experiences, we will also discuss how capital account opening and financial deepening may significantly increase China’s foreign assets and liabilities and influence the landscape of the international monetary system.