13 October 2015

The Korea Times

This was an article contribution by Associate Professor Shin Jang-Sup from the Department of Economics at NUS Faculty of Arts and Social Sciences, in which he analysed a possible move by China of introducing a Tobin tax.

Tobin tax was first proposed by James Tobin after the collapse of the Bretton Woods System in 1972 as a means to deter short-term speculation, not to increase tax revenues or affect normal currency transactions.

It can also be understood as a minimum measure to decrease the power of the common enemy of emerging markets so that they can focus more on improving their national and social well-being.

Despite its good rationale, the Tobin tax has not been implemented in the last four decades.

Assoc Prof Shin further shared the four reasons as to why China had the unique capacity to introduce a Tobin tax with less fear in comparison with the rest of the emerging market countries.

He opined that if international institutions as the International Monetary Fund and the World Bank are really concerned with the well-being of emerging markets, they should also support China’s move toward introducing a Tobin tax so that other emerging markets can follow suit.

To read the full article, click here.