Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212767 
Year of Publication: 
2013
Series/Report no.: 
BOFIT Discussion Papers No. 12/2013
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
This paper analyzes empirically what determines the choice of countries signing an RMB-denominated Bilateral Swap Agreement (BSA) with China. The gravity motif is predominant (both in terms of country size and distance from China) but so is the trade motif, in terms of both exports to China and the existence of an FTA with China. Institutional soundness also matters since countries with better government and less corruption are more likely to sign an RMB-denominated BSA. This contravenes the view that China has used RMB BSAs as a soft power tool in more corrupted countries. However, the fact that China has a preference for countries with a default history and a closed capital account calls for caution.
Subjects: 
RMB internationalization
bilateral swap agreements
JEL: 
F33
F36
F42
Persistent Identifier of the first edition: 
ISBN: 
978-952-6699-15-8
Document Type: 
Working Paper

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