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2192. Forty Years Development of China’s Outward Foreign Direct Investment: Retrospect and the Challenges Ahead
- Author:
- Tao Wang and Kailin Gao
- Publication Date:
- 05-2019
- Content Type:
- Working Paper
- Abstract:
- Outward foreign direct investment (OFDI) has increasingly become an importantmethod for China to integrate into the world economy. This paper comprehensivelyreviews and analyses policy development and the changing pattern of China’s OFDIover the past 40 years. We divide the development into “restricted” (1978–1999), “relaxed” (2000–2016) and “regulated” (2017 onwards) stages. This paper alsoreviews literature on the impact of Chinese OFDI on China and host countries. Despite its generally positive ef ects, large-scale and unbalanced OFDI activitieshave alarmed Chinese policy-makers. Both developing and developed host countrieshave expressed their concern over national security and the misbehavior of someChinese overseas enterprises. Therefore, greater supervision and adjustment fromquantity to quality growth is necessary for the future development of China’s OFDI.
- Topic:
- Development, History, and Foreign Direct Investment
- Political Geography:
- China and Asia
2193. Opinion: What Is China’s Core Economic Interest in Trade War?
- Author:
- Qiyuan Xu
- Publication Date:
- 02-2019
- Content Type:
- Policy Brief
- Abstract:
- The trade conflict between China and the U.S. has lasted for more than half a year. The two sides have held several rounds of consultations, but agreements were later broken and tensions have only intensified. The spat will likely be protracted, with frictions to continue and possibly escalate for a period of time, given the two countries’ diverging interests, public opinions and historical experiences. A broad range of issues are involved in the trade dispute. For example, the U.S. has pressured China on forced technology transfer, talent strategy and industrial policy issues, as well as issues the two sides have long been at odds over, such as intellectual property rights, labor, environmental protection, stateowned enterprise reform and foreign exchange rates. Meanwhile, the U.S. has targeted products and sectors that go well beyond those in which China has a competitive advantage. The U.S. tariffs also target industries that the country plans to focus on for future development.
- Topic:
- Development, Tariffs, Trade Wars, Trade, and Strategic Competition
- Political Geography:
- China, Asia, North America, and United States of America
2194. China’s economy seeks bottom amid downward pressure in 2019
- Author:
- Qiyuan Xu
- Publication Date:
- 02-2019
- Content Type:
- Policy Brief
- Abstract:
- Proactive fiscal policy will be employed this year to meet the challenge of downward pressure In 2019, the Chinese economy is expected to seek a bottom as a slowdown is inevitable. It is anticipated that it will stabilize at the end of the year or early next year at a growth rate of around 6.3 percent. With China's economy entering a new era, policymakers should focus more on the quality of growth in addition to maintaining a moderately high growth rate. ...... At the same time, China's economy is facing a lot of downward pressuredomestically. First, confidence in the financial market needs to be restored. In2018, China's financial market was hit many times; its stocks, bonds, fundsand internet finance, for example, were all affected. In addition, at present, thewidening credit spreads and the high degree of liquidity between bankscannot be converted into loans to enterprises and other market entities. Facedwith rising market risks and faltering consumer confidence, investors preferlow-risk or risk-free asset allocations.
- Topic:
- Markets, Financial Markets, Economy, and Fiscal Policy
- Political Geography:
- China and Asia
2195. Supply-side reform leads to economic resilience
- Author:
- Qiyuan Xu
- Publication Date:
- 02-2019
- Content Type:
- Policy Brief
- Abstract:
- China's GDP grew 6.6 percent in 2018, according to National Bureau o ftatistics data. Despite the slight slowdown in the GDP growth rate, however, exports grew at a relatively high 9.9 percent year-on-year calculated in US dollars. And, not surprisingly, China's trade surplus with the United States expanded further. ...... Besides, the relative prosperity index of small and medium-sized enterprises has dropped to the second-lowest point in a decade, and the financial cost differentiation among various industries is growing. This may have a negative impact on not only short-term macroeconomic stability, but also the development space of relevant emerging industries and long-term growth momentum.
- Topic:
- Reform, GDP, Economy, Economic Growth, and Resilience
- Political Geography:
- China and Asia
2196. Perceiving Truth and Ceasing Doubts: What Can We Learn from 40 Years of China’s Reform and Opening up?
- Author:
- Fang Cai
- Publication Date:
- 05-2019
- Content Type:
- Working Paper
- Abstract:
- China’s reform, opening up and resultant economic growth in the past 40 years haveled to the accumulation of an immense array of experiences, which economists areobligated to look into, analyze and theorize upon. In fact, the rich literature in thisarea has positively assessed and documented China’s successful experiences. However,theories that were established in Western countries have been applied as doctrine tojudge China’s experiences. By adopting an analytical framework unifying historicallogic and theoretical logic, the purpose of this paper is to reveal the unique Chineseexperience and its relevance to the general laws of economic development. Based on theexperiences of and in reference to research findings about China, this paper chroniclesthe process of reform, opening up and economic growth, and analyzes the nexus betweenthem. The study demystifies how the incentive mechanism, the factor accumulation andallocation system, market development, and macro policy environment reforms havespurred China’s economic growth, structural changes and the increase in productivity.The changes in development stage are examined and policy implications for furtherreform are discussed.
- Topic:
- Reform, Economy, Economic Growth, and Trade Policy
- Political Geography:
- China and Asia
2197. Assessing China’s Influence in Europe through Investments in Technology and Infrastructure. Four Cases.
- Author:
- Frans-Paul van der Putten
- Publication Date:
- 01-2019
- Content Type:
- Policy Brief
- Institution:
- Clingendael Netherlands Institute of International Relations
- Abstract:
- China’s role as a global investor and financier has grown rapidly in recent decades, nowhere more so than in Europe. In 2017, a full quarter of China’s outbound foreign direct investment was destined for Europe. China has stepped up promotion of its signature Belt and Road Initiative (BRI), with Europe as its final destination, ever greater flows of investment in Eurasian connectivity are on offer. However, in recent years scepticism about rising flows of Chinese investment into the EU has grown. This report aims to carefully scrutinize the linkage between Chinese investment in Europe and China’s influence in the region and provides a nuanced and careful analysis that goes beyond the alarmism and polarization that dominates so much of the recent discussion about China’s role in Europe. It is based on a series of case studies examining a Chinese port investment in Greece, a Chinese-financed rail project in Hungary and Serbia, and two Chinese acquisition deals in the Netherlands. Thus, the authors shed light on the motives behind these individual Chinese investments and financial packages, including the interests of both the Chinese and the host governments and firms involved, evaluating what, if any, Chinese “influence” can be linked to the deals. According to the findings, the specific terms of each investment or loan package are dependent on the individual circumstances of the countries and firms involved. In each case there is an identifiable commercial basis for the Chinese investment, but economic and political viability of each deal varies.
- Topic:
- Globalization, Investment, and Trade
- Political Geography:
- China, Europe, and Asia
2198. The US–China trade–tech stand-off and the need for EU action on export control
- Author:
- Brigitte Dekker and Maaike Okano-Heijmans
- Publication Date:
- 08-2019
- Content Type:
- Special Report
- Institution:
- Clingendael Netherlands Institute of International Relations
- Abstract:
- As the great power rivalry and (technological) trade conflict between the United States (US) and China intensifies, calls for an export control regime tailored to so-called emerging technologies are growing. In August 2018 the US government announced the Export Control Reform Act (ECRA), seeking to limit the release of emerging technologies to end uses, end users and destinations of concern. The contest is on for the leader in the development and use of emerging technologies, but also for shaping norms and writing the rules for their use. This requires the Netherlands and other EU member states – in coordination with key stakeholders from business and academia – also to redouble their efforts to recraft their own approach to export controls of so-called ‘omni-use’ emerging technologies. This Clingendael Report outlines four levels of action in the field of export control for the Dutch government to pursue in parallel: bilaterally with the US; European Union cooperation; ‘Wassenaar’ and beyond; and trusted communities.
- Topic:
- Development, Science and Technology, Power Politics, Exports, and Trade
- Political Geography:
- China, Europe, Asia, North America, and United States of America
2199. U.S.–Southeast Asia Trade Relations in an Age of Disruption
- Author:
- Brian Harding and Kim Mai Tran
- Publication Date:
- 06-2019
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- The post-World-War II era has seen extraordinary growth in international trade and the creation of regional and global trading frameworks spearheaded by the United States and anchored in the General Agreement on Tariffs (GATT) and the World Trade Organization (WTO). In recent years, frustration with the WTO’s stalled process had pushed U.S. policymakers to pursue regional and bilateral trade agreements. However, since president Donald Trump came to office in January 2017, U.S. trade policy has undergone a dramatic reorientation, creating enormous volatility and impacting global trade and supply chains. President Trump’s decision to pull out of the Transpacific Partnership (TPP) on the third day of his presidency, his focus on reducing bilateral trade deficits, and his interest in only forging new bilateral trade deals have had widespread implications for U.S.-Southeast Asia economic and political relations. In many ways, the United States is no longer a predictable trade partner for Southeast Asian countries, and the uncertainty stemming from U.S.-China trade tensions is further affecting U.S.-Southeast Asia trade relations. Meanwhile, Asian regional economic integration and regional trade architecture are moving ahead without the United States at the table.
- Topic:
- Diplomacy, International Cooperation, Alliance, and Economic Cooperation
- Political Geography:
- Asia, North America, Southeast Asia, and United States of America
2200. Creating a Real Peace in Afghanistan
- Author:
- Anthony H. Cordesman
- Publication Date:
- 07-2019
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- It has been a long, grim war since the first U.S. troops appeared in Afghanistan on October 7, 2001. The fighting has now lasted close to 18 years, and the conflict has become one of the worst managed wars in American history. The effort to reinvent Afghan government as a functioning democracy has so far been an unstable nightmare mixing corruption and uncertain central leadership with power brokers, ex-warlords, and divided leadership. Efforts at economic growth and reform have fallen far short of their goals, vast sums have been wasted or lost through corruption, and the current Afghan economy now survives on the basis of outside aid and domestic narcotics exports. Major security efforts have at best produced an uncertain stalemate and one where the Afghan government increasingly seems to be losing control in the countryside in order to maintain its hold on major population centers. Three different Presidents have made major errors in overall strategy. President Bush gave priority to Iraq at the cost of giving the Afghan war proper attention and providing adequate forces to deal with the return of the Taliban. President Obama first authorized a surge — which wasted major resources in Helmand — and then called for a premature U.S. withdrawal based on totally unrealistic goals for Afghan force development. President Trump has adopted a strategy which has no clear political or economic element, and is unclear as to whether the U.S. is willing to keep supporting Afghan government military efforts or is giving priority to peace more as part of an effort to withdraw U.S. forces than to achieve a lasting and meaningful peace settlement. This report addresses the options for staying in Afghanistan, for reaching a cosmetic or real form of peace, and for some form of unilateral withdrawal. It describes the challenges in each area: the current stalemate in conflict and the debate over Afghan Government versus Taliban control, the critical problems in Afghan governance, the weaknesses in the Afghan economy, and the many remaining challenges in creating Afghan forces that can stand on their own. It addresses the challenges in cutting or removing U.S. land and air forces. Finally, it addresses critical problems in assessing and costing the current level of U.S. involvement in the war, and in estimating the future cost of supporting a peace or continuing the fighting.
- Topic:
- Military Strategy, Public Opinion, Conflict, and Peace
- Political Geography:
- Afghanistan, Middle East, Asia, Vietnam, North America, and United States of America