In the light of growing economic and financial interdependence, we need to have a better understanding of how monetary policy works in China

With the Bank of England recently establishing swap lines with the People’s Bank of China and financial linkages between Britain and China set to become more intense over time, it is important to have a good understanding of how Chinese authorities conduct monetary policy. A new report by OMFIF, outlined here by John Plender and Gabriel Stein, stresses the need for Britain to be prepared for the macroeconomic effects that a fully capital account liberalised China might have.