Suomen   Pankki   – Finlands Bank   – Bank   of  Finland UnrestrictedJouko   Rautava 111.2.2016

Jouko  Rautava,  Advisor• Expert on  Chinese and  Russian  economies and  economic policy.    

Unrestricted

Bank of Finland

The  Economic  Situation  in  China

Reforms,  structural  change  and  slower  growth  

Jouko Rautava

211.2.2016 Finpro Helsinki

Suomen   Pankki   – Finlands Bank   – Bank   of  Finland Unrestricted

Stock  market  turbulence  with  Chinese  characteristics  

Jouko   Rautava 311.2.2016

Source:  Macrobond

Suomen   Pankki   – Finlands Bank   – Bank   of  Finland Unrestricted

More  flexibility  to  forex  policy

Jouko   Rautava 411.2.2016

Juan  against  dollar   NEER  and  REER

Sources:  Reuters,  BIS

Aug.11

Suomen   Pankki   – Finlands Bank   – Bank   of  Finland Unrestricted

Yuan  spearheads  reform  policy

Jouko   Rautava 511.2.2016

Share  of  international  payments,  % Reforms  in  2015

Source:  Swift

-­ Deposit  insurance-­ Liberalization  of  interest  rates-­ Capital  account  liberalization  measures-­ Change  of  exchange  rate  mechanism-­ SDR-­ …

-­ Two-­child  policy  -­ SEO  reform  (though  still  only  plans)-­ Pricing  reforms  (e.g.  gas)-­ Military  reform-­ …

Suomen   Pankki   – Finlands Bank   – Bank   of  Finland Unrestricted

Structural  change  proceeds:  demand

Jouko   Rautava 611.2.2016

Sources:  CEIC,  Macrobond

Suomen   Pankki   – Finlands Bank   – Bank   of  Finland Unrestricted

Structural  change  proceeds:  supply

Jouko   Rautava 711.2.2016

Source:  Macrobond

Suomen   Pankki   – Finlands Bank   – Bank   of  Finland Unrestricted

Electricity  consumption,  GDP  growth  and  structural  change?

Jouko   Rautava 811.2.2016

Source:  Macrobond

Suomen   Pankki   – Finlands Bank   – Bank   of  Finland Unrestricted

No  reason  to  understate  risksDomestic  debt,  %  of  GDP

Jouko   Rautava 911.2.2016

Sources:  Macrobond,  BOFIT

Suomen   Pankki   – Finlands Bank   – Bank   of  Finland Unrestricted

Slower  is  better,  disturbances  part  of  development

Jouko   Rautava 1011.2.2016

Sources:  Macrobond,  BOFIT

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16

2000 2005 2010 2015

GDP  growth,  %  yoy BOFIT  forecast

Sources:  NBSC,  BOFIT.24.9.2015bofbulletin.fi

China's  GDP  growth  and  BOFIT  forecast  for  2015–2017

Suomen   Pankki   – Finlands Bank   – Bank   of  Finland Unrestricted

Asia  on  the  rise-­ share  of  global  output

Jouko   Rautava 1111.2.2016

Sources:  Maddison,  WEO