Munich Personal RePEc Archive

The Financial Social Accounting Matrix for China, 2002, and Its Application to a Multiplier Analysis

Li, Jia (2008): The Financial Social Accounting Matrix for China, 2002, and Its Application to a Multiplier Analysis. Published in: Forum of International Development Studies , Vol. 36, (March 2008): pp. 215-239.

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Abstract

This study aims to shed light on the linkage between real side and financial side of Chinese economy. Utilizing a financial social accounting matrix (F-SAM) for China, 2002, newly constructed for this purpose, the current study provides a consistent accounting system for Chinese economy. The F-SAM allows a close examination on the structural characteristics of Chinese economy from the perspective of flows of funds. The study goes further to multiplier analysis. The main findings are: first, real side and financial side of Chinese economy are intertwined with each other; secondly, the development of a modern financial system contributes to the growth of Chinese economy; thirdly, financial sector, in place of government, has come to play a central role in resource mobilization and allocation, although government maintains interventions through capital transfer to non-financial enterprises; fourthly, bank deposits and loans are single significant financial instruments in China’s resources mobilization and allocation processes.

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