While China s government should make greater efforts to rebalance the economy by conventional measures, it also should focus more attention on adjusting the currency structure of the country s gross assets and gross liabilities. In particular, China should try to replace its dollar denominated assets with renminbi denominated assets, and its renminbi denominated liabilities with dollar denominated liabilities.

As a result, when the dollar depreciates against the renminbi, the value of China s foreign liabilities increases in dollar terms, while that of its foreign assets remains unchanged. As a result, China s net international investment position (NIIP), which is the difference between China s gross assets and its gross liabilities, automatically worsens.

If China cannot do very much about existing gross assets and gross liabilities, it should address new assets and liabilities in order to 160 minimize future capital losses. In short, China must take into consideration the ongoing asset crisis facing emerging economies, especially when considering highly consequential questions such as full renminbi convertibility and the currency s internationalization.

If China cannot do very much about existing gross assets and gross liabilities, it should address new assets and liabilities in order to minimize future capital losses. In short, China must take into consideration the ongoing asset crisis facing emerging economies, especially when considering highly consequential questions such as full renminbi convertibility and the currency s internationalization.

Liabilities

Since the 2000 s, China s gross assets and gross liabilities have increased dramatically, owing to the success of China s trade promotion and FDI policies. As a result, China s net international investment position has become very vulnerable to the devaluation of the dollar.

Unfunded liabilities

Unfunded liabilities

Assets Liabilities

Total Liabilities

Liquid Liabilities

Environmental Liabilities

(c) Liabilities

Liabilities 4,030.

Article 57The financial liabilities refers to the following liabilities of an enterprise

(w) Contingent liabilities

b Total liabilities.

Assets and Liabilities

Expected Liquid Liabilities

(a) Contingent liabilities

Statement II Assets, liabilities, liabilities and reserves and fund balances at 31 December 1997

(2)other financial liabilities.

Assets and Liabilities Summary

Liquid Assets and Liabilities

Transfers to Liquid Liabilities

Note 6. Contingent liabilities

Other end of service liabilities

These increasing liabilities are unfunded.

F. Recognition of Environmental Liabilities

contingent environmental liabilities plus explanations

Deferred credits and other liabilities

As percentage of projected liabilities

Note 18. Contingent financial liabilities

Increase (decrease) in other liabilities

With ever increasing gross dollar assets and gross renminbi liabilities, a stronger renminbi means that China will suffer additional welfare losses from the valuation effect of exchange rate movements. (It is worth noting that this is not solely a Chinese phenomenon all major emerging market economies are faced with the same fate.)

G. Liquidity available cash versus liabilities

Voluntary contributions receivable and unrecorded liabilities

Total liabilities, reserves and fund balances

Total liabilities, reserves and fund balances

I also have a few liabilities.

(a) Nature and term of the liabilities

F. Recognition of environmental liabilities 22 30

H. Measurement of environmental liabilities 35 42

(k) Liabilities and reserves and fund balances

(j) Liabilities and reserves and fund balances