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Begin New Search Topic Markets Political Geography China Content Type Policy Brief Publication Year within 10 Years Publication Year within 3 Years

1. Home advantage: How China’s protected market threatens Europe’s economic power

Author:
Agatha Kratz and Janka Oertel
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
China’s vast yet protected home market has allowed some of its firms to acquire a scale that provides them with significant advantages when they compete in other markets. These firms are able to undercut European companies both in the EU and around the world, including in sectors key to Europe’s future economy and security, from energy to telecommunications. The EU urgently needs to incorporate the concept and reality of this ‘protected home market advantage’ into its thinking on China. Europe can defend its own industries by adopting an integrated policy approach, working with like-minded partners around the world, and even prising open closed parts of China’s domestic market. The EU should also look to enhance its single market – both as a defensive measure and a way to improve its strategic sovereignty.
Topic:
Markets, European Union, Economy, Business, and Industry
Political Geography:
China and Europe

2. Xi Jinping’s Evergrande Dilemma

Author:
John Lee
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Evergrande is one of the top-two real estate developers in a still highly fragmented Chinese sector. Its main strategy is to achieve ever-increasing scale (rather than profitability) in order to move ahead of and crowd out commercial competitors. It has also amassed the largest land reserves of all Chinese developers, which were financed through massive borrowings. By 2018, Evergrande held 822 pieces of undeveloped land in 228 cities, with a planned gross floor area of 3.28 billion square feet of new homes—the equivalent of 10 percent of Germany’s entire housing stock. It paid $75 billion just for this undeveloped land. Although Evergrande’s market share is only around 4 percent, its borrowings stand out. Its current balance sheet liabilities amount to an estimated 2 percent of China’s gross domestic product (GDP), while its off-balance-sheet liabilities could be another 1 percent of China’s GDP. This makes Evergrande the most indebted property developer in the world. Burdened by this debt, struggling to meet its debt interest and repayment obligations, and viable only if property asset values and sales continue to increase, Evergrande faces possible financial collapse—an event bound to have flow-on effects for the Chinese economy. However, the unusually high global interest in Evergrande has arisen because its woes are increasingly seen as symptomatic of those faced by the broader Chinese economy, which is struggling with enormous levels of indebtedness and overreliance on the real estate sector. Debt held by nonfinancial institutions in China increased from about 115 percent of GDP in 2010 to around 160 percent of GDP currently. This is the most rapid and largest increase in a 10-year period for any major economy and makes the level of debt held by Chinese nonfinancial institutions one of the highest in the world. The real estate sector accounts for around 15 percent of GDP, while property services account for another 14 percent—the highest in any developing economy. The share of the real estate sector as a proportion of GDP was only about 4 percent in 1997 and 9 percent in 2008. Since 2008, up to a third of all domestic fixed investment has gone into real estate, and up to half of total national debt is linked to the real estate sector.
Topic:
International Relations, Foreign Policy, Debt, Economics, Markets, and Business
Political Geography:
China and Asia

3. Changes in the Regional Structure of China's Domestic Market and Implications

Author:
Jihyun Jung, Won Seok Choi, Hong Won Kim, and Joohye Kim
Publication Date:
08-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In response to intensifying conflict with the United States and the shock of Covid-19, China reinforced its strategy to expand domestic demand. China's domestic market is an important factor affecting Korea's exports and economic growth. Accordingly, a large body of research has been conducted in Korea on China's expansion policy and changes in its domestic market. However, most studies have analyzed changes in China's consumer market, import market and imported items, limiting the overall understanding of China's domestic economy. In addition, most studies on China's regional domestic market have analyzed the market segmented by region. Recognizing this gap, this study expanded the scope of analysis of the domestic market in China to the entire domestic final demand, and analyzed inter-regional trade relations and other economic relations based on an inter-regional input-output analysis, which has rarely been attempted in analyses of the Chinese domestic market. In addition, the changes in the regional structure of the Chinese import market and Korea's competitiveness were analyzed using Chinese trade statistics. In particular, by synthesizing the changes after the global financial crisis, a turning point in China's economic structure, we project future changes in the regional economic structure of China, which emphasizes the independence of its domestic economy. In addition, in the era of US-China conflict, the study aimed to select regional markets meaningful to Korea, and to present strategic directions toward China focusing on regional cooperation and approaches into the domestic market.
Topic:
Markets, Economy, Regional Economy, and Domestic Market
Political Geography:
China, Asia, and South Korea

4. Collateral benefits? South Korean exports to the United States and the US-China trade war

Author:
Mary Lovely, David Xu, and Yinhan Zhang
Publication Date:
07-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
This Policy Brief assesses the extent to which the United States increased its imports from South Korea after the US imposition of tariffs on Chinese exports. Korea benefited from this shift in US imports, although the increase was relatively small in most sectors. The authors use highly disaggregated US import and tariff data to examine adjustments in US purchases of manufactured goods from its trade partners. Their analysis indicates that Korea made a small gain in the US market following the levying of US tariffs on Chinese exports, with Korea’s share of overall US manufacturing imports rising 0.9 percent and its share of US manufacturing imports subject to trade war tariffs rising 1.0 percent. Gains were spread across a variety of manufacturing sectors—such as wood products, textiles and apparel, and machinery—reflecting both the choices made by US officials regarding which Chinese exports to tax and the nature of preexisting trade relationships between South Korea and the United States.
Topic:
Markets, Economy, Trade Wars, and Exports
Political Geography:
China, Asia, South Korea, and United States of America