| Abstract | To measure the risk exporues in China’s macro-financial system, we first used contingent claims approach to calculate the risk-adjusted balance sheets of the main sectors of the economy. We then illustrated how the value of implied assets, implied asset volatiltiy and risk indicator, like DD, had evolved from 2000 to 2008. The CCA approach was further applied to analyzing and quantifying the strong non-linearities that are characteristic for the accumulation and transmission of risk in macro-financial system. And Sector-level market leverage and implied asset volatility were highlighted as key interacting factors that play an important role in the increase of a sector’s vulnerability to shocks and contagion.
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