学校课程-周一1国际金融chapter1ba

InternationalFinanceSchoolofBusinessLilyObjectiveofthissubjectThissubjectservestointroducethestudentstothetheoreticalframeworkofinternationalfinanceanditsapplicationinanalyzingeconomicevents.Thissubjectisalsosupposedtohelpthosewhoareinterestedininternationalbusinesstounderstandtheinformationimpliedindomesticorforeigneconomicpoliciesandadjusttheirstrategiescorrectly.Whatisinternationalfinance?Internationalfinanceisacourseaddressingthemonetarysideofinternationaleconomics.Thatistosay,thecourseofinternationalfinancediscussesthemonetaryconsequencesofinternationaltrade.Itisawayofviewinginternationalmonetaryrelationship.RequirementsforthestudentsA.Tobeaparticipantinthemarket,notabystander.B.Tokeepanotebookforthetermsandquestionsinyourhand.C.Toasksuchquestionsas“who,where,why,how,what,when”frequentlytohelpyouunderstandtheknowledge.D.Tokeepyourcell-phonesilentduringclasstime.E.Tobringyourquestionstomeafterclassorevenemailme.ContactWaysE-mailaddress

OfficeroomnumberRoomNo.411,SchoolofBusiness,BLCUPrerequisiteforthissubjectIntroductoryeconomicsandfinanceIntermediatemacroeconomics,moneyandbankingcourses

BriefPreviewofthissubjectChapter1and2discussthedeterminantsofthebalanceofpaymentsanditsadjustment.Chapter3istoaddressthewaysinwhichtheinternationalmonetarysystemcouldbeorganizedandthendiscussitsevolution.Chapter4concentratesitsdiscussiononexchangeratesystem.Chapter5discussestheforeignexchangemarketandfinancialderivatives.Chapter6identifiestherelationshipbetweenexchangeratesandinterestratesandchapter7dealswithrisksarousedfromthefluctuationofforeignexchangerates.Chapter8mainlycoverstheareaofthedeterminantsofexchangeratestheoretically.BriefPreviewofthissubject(cont’d)Chapter9,10and11discusstheinternationalcapitalflowsfromtheperspectiveofmultinationalcompanyandinternationalbanking.Chapter12discussesthemacroeconomicsunderanopeneconomy.MainReferences刘克，《国际金融》（第2版），北京语言大学出版社，2013陈雨露，《国际金融》（第5版），中国人民大学出版社，2015年版杨长江，姜波克，《国际金融新编》（第4版），高等教育出版社，2014年版蒋先玲，《国际金融学》（新编21世纪金融学系列教材），中国人民大学出版社，2017年版[美]托马斯•A•普格尔，《国际金融》（第15版），中国人民大学出版社,2014MichaelMelvin,InternationalMoneyandFinance,Addison-WesleyEducationalPublishersInc.,2000CHAPTER1

BalanceofPaymentsObjectiveofChapter1

Thischapterservestointroducethestudentstothebalanceofpayments.Howitisconstructedandhowbalance-of-paymentsdata(concepts)andaccountmaybeinterpreted.

OutlineofChapter1ConceptsoftheBalanceOfPaymentsCategoriesoftheBalanceOfPaymentsAccountPrinciplesfortheBalanceOfPaymentsSummarymeasuresoftheBalanceOfPaymentsandtheirrespectiveimplication§1.ConceptsoftheBOPBOPisanaccountingstatementwhichmeasuresallfinancialandeconomictransactionsbetweendomesticandforeignresidentsoveraspecifiedperiodoftime.Or:Systematicrecordofalleconomictransactionsbetweenthehomecountryandtherestoftheworldforaspecifictimeperiodintheformofdouble-entrybookkeeping.ConceptoftheBalanceofPaymentsbyIMFBalanceofPaymentsManual,5thedition,1993,byIMFTheBalanceofPaymentsisastatisticalstatementthatsystematicallysummarizes,foraspecifictimeperiod,theeconomictransactionsofaneconomywiththerestoftheworld.BPM6,2008,byIMF国际收支的中文定义国际收支是以统计报表的方式，系统总结特定时期内一国的经济主体与他国的经济主体之间的各项经济交易，它包括货物、服务和收益，对世界其他地区的金融债权和债务的交易以及单向转移。（IMF，1993，2008）姜波克定义的国际收支和国际收支平衡表国际收支是指一国在一定时期内全部对外往来的系统的货币记录。国际收支平衡表是指国际收支按照特定帐户分类和复式计帐原则表示的会计报表。InternationalEconomicandFinancialTransactionsAtransactionisdefinedasaneconomicflowthatreflectsthecreation,transformation,exchange,transfer,orextinctionofeconomicvalueandinvolveschangesinownershipofgoodsand/orfinancialassets,theprovisionofservices,ortheprovisionoflaborandcapital.AspecifiedperiodoftimeTheBOPisalwaysissuedquarterlyorannually.Measuresflows（流量）

ratherthanstocks（存量）.

Flows:一定时期的发生额。

Stocks:某个时点上的持有额。SummaryofthefundamentalsoftheBOP

Isbasedonadouble-entrybookkeepingsystem.Itrecordsalltheinternationaleconomicactivityofaneconomy.Itmeasuresflows.Alwaysbalances;i.e.,itmustbeequaltozero.SignificanceoftheBoPNationalLevelJudgingtheexternalequilibriumofacountrytellingthestructureofthedomesticeconomyunderstandingtheopennessofacountry

CorporateLevelForecastinginternationalcompetitivenessJudgingpressureplacedonexchangerateSignalingpossibleimpositionofcapitalcontrols§2.ComponentsoftheBOPTheevolutionofthecomponentsReturnofthe17thcenturytradeofmerchandise:balanceoftradeInthe1920’sinternationalcapitalflows:balanceofforeignexchangeAftertheWorldWarTwocompensationtrade,bartertrade,aidgivengrants,warreparations:BOPinabroadsense,namelyoverallbalanceStandardCategoriesofBOP(BPM5)A. CurrentAccounta.goodsandservicesb.ec.currenttransfersB. CapitalandFinancialAccounta.capitalaccountb.financialaccountb.1Directinvestmentb.2Portfolioinvestmentb.3Otherinvestmentb.4ReserveassetsStandardCategoriesofBOP(BPM6)A. CurrentAccounta.goodsandservicesb.primarye（初次收入）c.secondaryeaccount（二次收入）B. CapitalAccountC.FinancialAccounta.Directinvestmentb.Portfolioinvestmentc.FinancialderivativesandESOs(EmployeesStockOptions)d.Otherinvestmente.ReserveassetsD.NeterrorsandomissionsResource:China’sBalanceofPaymentsFourAccounts:(1982-2014)BPM5 A. CurrentAccount B. CapitalandFinancialAccountC.ChangeinReservesassetsD.NeterrorsandomissionsResource:China’sBalanceofPaymentsThreeAccounts:(2010-2018)BPM6 A. CurrentAccount B. CapitalandFinancialAccountC.NeterrorsandomissionsResource:China’sBalanceofPayments(BPM6)1.errorsandomissions中国国际收支平衡表的账户设置（BPM6）国际收支账户经常账户资本和金融账户误差和错误遗漏账户货物服务初次收入二次收入资本账户金融账户证券投资直接投资非生产、非金融资产交易资本转移金融衍生品（不含储备资产）和雇员认股权其他投资储备资产CurrentAccountThecurrentaccountbalanceisthesumofthedebitandcreditentriesintheaccountsjustdescribed.Acurrentaccount

deficitoccurswhenthesumofthedebitentriesexceedsthesumofthecreditentries.Acurrentaccountsurplus

occurswhenthesumofthecreditentriesexceedsthesumofthedebitentries.CurrentAccountThecurrentaccountsummarizestheflowofcapitalbetweenonespecifiedcountryandallothercountriesduetothepurchasesofgoodsorservices,theprovisionofeonfinancialassets,orunilateralcurrenttransfers(ernmentgrantsandpensions,privateremittances).Thecurrentaccountpertainstogoodsandservices,e,andcurrenttransfers.Acurrentaccountdeficitsuggestsanetoutflowofcapitalfromthespecifiedcountryforitscurrenttransactions.Whileasurpluscurrentaccountsuggestsnetinflowofcapital.ChinaCurrentAccount(2008)(millioninUSD)Sources:,dated28thSept.2009ItemBalancecreditdebitCurrentaccount426，1071，725，8931，299，786

A.Goods &Services348，8701，581，7131，232，843a.goods360，6821，434，6011，073，919

b.services-11，812147，112158，924B.e31，43891，61560，177C.Unilateraltransfer45，79952，5656，766ChinaCurrentAccount(2010)(millioninUSD)Sources:,dated21stSept.2011ItemBalancecreditdebitCurrentaccount305,4001，946，8001，641，400

A.Goods &Services232,1001，752，6001，520，600a.goods254,2001，581，4001，327，200

b.services-22,100171,200193,300B.e30,400144,600114,200C.Unilateraltransfer42,90049,5006，600ChinaCurrentAccount(2014)(millioninUSD)Sources:,dated1stSept.2015ItemBalancecreditdebitCurrentaccount219,7002,799,2002,579,500A.Goods &Services284,0002,545,1002,261,100a.goods476,0002,354,1001,878,200

b.services-192,000190,900382,900B.e-34,100213,000247,100C.Unilateraltransfer-30,20041,10071,400Capital&FinancialAccount:

TheFinancialSectorofBOPTheCapitalandFinancialAccounttabulatestheflowsoffinancialassetsbetweendomesticresidentsandforeignresidentsandgovernments.Thecapitalandfinancialaccountpertainsto(i)capitaltransfersandacquisitionordisposalofnonproduced,nonfinancialassets（非生产、非金融资产的收买/放弃——各种无形资产如专利、版权、商标、经销权以及租赁和其他转让合同的交易）and(ii)financialassetsandliabilities.Twosub-accounts:A.capitalaccount(seep4onChineseeditionbyProf.LiuKe)B.financialaccountFinancialaccountThefinancialaccount

(whichwascalledthecapitalaccountpreviously)summarizestheflowoffundsresultingfromthesaleofassetsbetweenonespecifiedcountrywiththerestoftheworld.Financialaccount(non-reserve)consistsofthreecomponentsandisclassifiedeitherbymaturityofassetornatureofownership.CategoriesofNon-reserveFinancialAccounta.

DirectInvestments

(Forpurposeofcontrol)

Netbalanceofcapitalwhichisdispersedfromandintoacountryforthepurposeofexertingcontroloverassets.Thiscategoryincludesforeigndirectinvestment.b.Portfolioinvestment(Forpurposesofreturn)Netbalanceofcapitalwhichflowsinandoutofthecountrybutdoesnotreachthe10%ownershipthresholdofdirectinvestment.Thepurchaseandsaleofdebtorequitysecuritiessuchasstocks,bonds,ormoneymarkettools,etc.,isincludedinthiscategory.EquitiesDebtCategoriesofNon-reserveFinancialAccountc.FinancialderivativesandESOsManyderivativecontracts,suchasforward,futures,options,swap,etc.,arestipulatedthatthecounterpartiesmakecommitmentstotransact,inthefutureandatagreed-onprices,inunderlyingitems.Thepresentvalue(ormarketprice)ofafinancialderivativesisderivedfromthedifferencebetweentheagreed-oncontractpriceoftheunderlyingitemandtheprevailingmarketprice(orthemarketpriceexpectedtoprevail),appropriatelydiscounted.ESOs（雇员股票期权）arevaluedconsistentlywiththecumulatedcompensationofemployeesuntilthevestingdate(可行权日).CategoriesofNon-reserveFinancialAccountd.OtherrelatedinvestmentOtherInvestmentAssets/Liabilities–Consistsofvariousshortandlong-termtradecredits,cross-borderloans,currencyandbankdepositsandotheraccountsreceivableandpayablerelatedtocross-bordertrade-short-term:lessthanoneyear -long-term:greaterthanoneyearThebalanceofcapital&financialaccountofChina(2008)millioninUSDItemBalancecreditdebitCapital&FinancialAccount18,965769,876750,911A.CapitalAccount3,0513,320268B.FinancialAccount15,913766,556750,6431.DirectInvestment94,320163,05468,7342.PortfolioInvestment42，66067,70825,0483.OtherRelatedInvestment-121,067535,794656,861Thebalanceofcapital&financialaccountofChina(2010)millioninUSDItemBalancecreditdebitCapital&FinancialAccount226,0001,108,000882,000A.CapitalAccount4,6004,800200B.FinancialAccount221,4001,103,200881,8001.DirectInvestment124,900214,40089,4002.PortfolioInvestment24,00063,60039,5003.OtherRelatedInvestment72,400825,300752,800Thebalanceofcapital&financialaccountofChina(2014)millioninUSDItemBalancecreditdebitCapital&FinancialAccount38,2002,573,0002,534,700A.CapitalAccount01,9002000B.FinancialAccount38,3002,571,0002,532,8001.DirectInvestment208,700435,200226,6002.PortfolioInvestment82,400166,40084,0003.OtherRelatedInvestment-252,8001,969,4002,222,200OfficialReserves(account)–totalreservesheldbyofficialmonetaryauthoritieswithinacountry.Thesereservesaretypicallycomprisedofmajorcurrenciesthatareusedininternationaltradeandfinancialtransactionsandreserveaccounts(SDRs)heldattheIMF.CentralBankinterventionsinexchangemarketschangesinofficialreservesbybuyingorselling1.gold,silver;2.foreigncurrencies;3.Foreigndenominateddebt;4.Buyorselloptionsorfuturesinmarkets;5.SDRs(SpecialDrawingRightsatIMF)NetErrorsandOmissions:

StatisticalDiscrepancyWhythereareerrors?illegalorundergroundactivity(gunrunings)MismatchinthedatacollectionprocessCustomsrecordsandfinancialinstitutionsrecordsThisoffsettingaccount(抵消帐户)isusedtoaccountforstatisticalerrorsand/oruntraceablemonieswithinacountry.There’sgoingtobesomeomissionsandmisrecordedtransactions—soweusea“plug”figuretogetthingstobalance.China’sBalanceofPayments（2008）millioninUSDItemBalanceCreditDebitCurrentaccount426，1071,725,8931,299,786Capital&FinancialAccount18,965769,876750,911“gap”=CA+CFA445,0722,495,7692,050,697OfficialReserves-418,9780418,978NetError&Omission-26,094026,094Neterror&Omission=CA+CFA+RESChina’sBalanceofPayments（2010）millioninUSDItemBalanceCreditDebitCurrentaccount305,4001,946,8001,641,400Capital&FinancialAccount226,0001,108,000882,000“gap”=CA+CFAOfficialReserves-471,7000471,700NetError&Omission-59,700059,700Neterror&Omission=CA+CFA+RESChina’sBalanceofPayments（2018）millioninUSDItemBalanceCreditDebitCurrentaccountCapital&FinancialAccount“gap”=CA+CFAOfficialReservesNetError&OmissionNeterror&Omission=CA+CFA+RES§3.Double-entryAccountingDebitvs.CreditInbookkeeping,debit(簿记中的付方，借方)isawrittennoteinanaccountofasumowedorpaidout.Whilecredit(簿记中的收方，贷方)isawrittenrecordofapaymentreceived.Inbookkeeping,debitmustbeequaltocredit.Whatisadouble-entrybookkeepingprinciple?OnetransactionTwoentries:DebitCreditWithanequalamountAruleofthumbItaidsinunderstandingtheBOPisto“followthecashflow”withanexceptionofreserveassets.Reserveassets:Anincreaseinreserveassetswillberecordedindebit,whileadecreaseinreserveassetswillberecordedincredit.HowtoRecordTwoEntries?Twostepsinrecording:1.Transactionitself(Alltransactionsareeitherdebitorcredit.)Follow“theruleofthumb”withanexceptionofreservesasset——Capitalinflowsrecordedcredit——Capitaloutflowsrecordeddebit2.Takethechangeindebtintoconsideration(Monetaryconsequences)ChangesinDebt国际经济交易中的债债权人Vs债务人本国人Vs外国人国际间的债权债务关系本国人对外国人的债务=外国人对本国人的债权外国人对本国人的债务=本国人对外国人的债权债的变化与国际资本流动本国人对外国人的债务增加=外国人对本国人的债权的增加——国际资本流入本国人对外国人的债务减少=外国人对本国人的债权的减少——国际资本流出MonetaryConsequencesofTransactionsCapitalInflow

1.Foreignownershipofassetsinhomecountryincreases2.OwnershipofforeignassetsbyyourresidentdecreasesCapitalOutflow1.Ownershipofforeignassetsbyyourresidentsincrease2.Foreignownershipofassetsinhomecountrydeclines(see表1-1onp6,ChineseeditionbyProf.LiuKe)SampleEntries:11.ExportersofChinasend$6,000ofgoodstoUSA,receivingashort-termbankdepositof$6,000inUSA.Credit:I-Exportsofgoods+$6000Debit:III-Increaseinshort-termprivateassetsabroad-$6000SampleEntries:22.China’sconsumerspurchase$12,000ofgoodsfromUSAfirmsandpaymentismadebycitizensofChinatransferring$12,000tothebankaccountofUSAfirmsinChinaDebit:I:Importsofgoods,-$12,000Credit:III:Ownershipofshort-termforeigndepositsbyChina’sresidentdecreases,+$12,000SampleEntries:33.ResidentsofChinasend$1,000ofgoodstoUSA’scitizensasagift.Credit:I:Exportsofgoods,+$1,000Debit:I:Unilateraltransfersmade-$1,000SampleEntries:44.China’sfirmprovides$2,000ofshippingservicestoUSAfirm.USAfirmpaysfortheseservicesbytransferringsomeofhischeckingaccountdepositsinChina’sbanktotheaccountofChina’sshippingfirmsinICBCbankCredit:I:Exportsofservices,+$2,000Debit:III:Decreaseinforeignshort-termprivateassetsinChina/Increaseinshort-termownershipofforeignassetsbyChina’sresidents-$2,000SampleEntries:55.AUSAfirmsends$2,500ofdividendstoitsChina’sstockholders.PaymentismadebytheUSAfirmwritingchecksonitsbankaccountinaChinesebank.Credit:I:Investmentereceiptsfromabroad,+$2,500Debit:III:Decreaseinforeignshort-termprivateassetsinChina/OwnershipofforeignassetsbyChina’sresidentsincrease,-$2,500SampleEntries:66.AcitizenofChinapurchasesa$5,000long-termcorporatebondissuedbyaUSAcompany.Payment