A Study of Financial Development in China based on Financial Globalization and Trade Friction

Purpose - The purpose of this study was to investigate the possess and achievement of financial development in China based on financial globalization and trade friction background and to find the key to end the trade war between China and the USA. Design/methodology/approach - This study collected the financial data to do the descriptive statistics and compared the trade data between China and the USA to discuss the way easing the trade friction. Findings– First, this paper introduced financial globalization and what China should do to finish financial globalization, such as RMB globalization and investing in the international capital market. Second, we summarized the process and achievements of financial globalization in China. Third, we analyzed the risks China will face in the future. Fourth, This study pointed out that the Chinese economic structure could be the primary cause of this trade imbalance phenomenon. Research implications or Originality – Our research summarized a Chinese financial development pattern, which could be a successful financial globalization pattern to other developing economies. This research provides a way to ease the trade imbalance and friction and further influence the recent trade war. The end of the trade war would provide a more stable trade environment for Korea.