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41. The Sustainability of China's Recovery from the Global Recession

Author:
Nicholas R. Lardy
Publication Date:
03-2010
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
China's policy response to the global financial and economic crisis was early, large, and well-designed. Although Chinese financial institutions had little exposure to the toxic financial assets that brought down many large Western investment banks and other financial firms, China's leadership recognized that its dependence on exports meant that it was acutely vulnerable to a global recession. Thus they did not subscribe to the view sometimes described as “decoupling,” the idea that Asian countries could passively weather the financial storm that originated in the United States and other advanced industrial economies. They understood that absent a vigorous policy response China inevitably would suffer from the backwash of a sharp economic slowdown in its largest export markets—the United States and Europe.
Topic:
Economics and Financial Crisis
Political Geography:
United States, China, Europe, and Asia

42. Developing Countries – even China – Cannot Rescue the World Economy

Author:
Manmohan Agarwal
Publication Date:
01-2010
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
Many analysts believe that developed countries will recover very slowly from the global economic crisis. Consequently, they have looked to the emerging economies of the developing world to help stabilize the world economy and generate a stronger recovery. Indeed, when the financial crisis first engulfed the rich countries in 2008 and early 2009, growth in developing economies was not affected as their banks and financial systems faced neither credit problems nor a more serious meltdown. It is true that some foreign investors, particularly institutional investors, withdrew their money from developing countries with large stock exchanges, setting off stock price declines and some currency devaluations. But this did not affect the “real” economy of production and employment. There was a wide belief that many developing economies were “decoupled” from the rich economies and could continue to grow and this growth would buoy the world economy. Even when output declined dramatically in the developed economies, reducing the demand for developing countries' exports, it was expected that growth in the larger emerging economies would not be significantly affected. This has been borne out by subsequent events. Growth in China has been 8-9 percent and in India about 6 percent in the first three quarters of 2009.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, and Financial Crisis
Political Geography:
China and India

43. The Global Financial Crisis and Africa's "Immiserizing Wealth"

Author:
Luc Soete and Alexis Habiyaremye
Publication Date:
01-2010
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Before the current global recession, many resource-rich African countries were recording unprecedented levels of growth due to a raw material price boom. However, the collapse in raw material prices and the ensuing severe economic difficulties have again exposed the vulnerability of these countries' natural resource export-focussed economic structures. In this research brief, we describe how Africa's abundance of natural resources attracted disruptive and predatory foreign forces that have hindered innovation-based growth and economic diversification by delaying the accumulation of sufficient stocks of human capital. We suggest that for their long-term prosperity, resource-rich African countries shift their strategic emphasis from natural to human resources and technological capabilities needed to transform those natural resources into valuable goods and services to compete in the global market.
Topic:
Economics, Emerging Markets, Industrial Policy, Global Recession, Natural Resources, and Financial Crisis
Political Geography:
Africa, China, and India

44. The evolving post-crisis world

Author:
Stephen Grenville
Publication Date:
04-2010
Content Type:
Working Paper
Institution:
Lowy Institute for International Policy
Abstract:
The worst of the global financial crisis (GFC) is over, but it has left scars, principally in the form of fiscallydriven debt increases, balance sheets that still need repair and high unemployment in the principal crisis countries. There is also unfinished business from the precrisis period, in the form of external imbalances. More positively, the crisis offers lessons about economic policymaking that may improve the way things are done. Of course the main lessons are for the developed countries that were at the centre of the crisis. But the countries of the region had to cope with the backwash, and in doing so lessons were learned. In addition, the lessons in the crisis countries, learned in an environment of extreme stress, may have relevance for the emerging market economies of this region.
Topic:
Development, Emerging Markets, and Financial Crisis
Political Geography:
China, India, and Asia

45. China-Southeast Asia Relations

Author:
Robert Sutter
Publication Date:
01-2009
Content Type:
Journal Article
Journal:
Comparative Connections
Institution:
Center for Strategic and International Studies
Abstract:
Asian commentators who asserted that China and its neighbors could ride out the economic crisis in U.S. and Western financial markets appeared in retreat during the quarter as the impact of the financial turmoil and recession in America and Europe began to have a major effect on China and the region's trade, manufacturing, currency values, and broader economic stability. The hope that China could sustain stable growth independent of the U.S. and Europe and thereby provide an engine of growth for export-oriented Southeast Asian countries was dented by Chinese trade figures that nosedived in November, especially Chinese imports, which fell by 18 percent. The financial crisis also dominated the discussion at the ASEM summit in October. Meanwhile, China continued to pursue infrastructure development projects with its neighbors to the south, resolved the land boundary dispute with Vietnam, and signed a free trade agreement with Singapore. Talk of a planned Chinese aircraft carrier caused some controversy, but on the whole assessments of China's rise were notably more balanced than in the past.
Topic:
Economics, Financial Crisis, and Reform
Political Geography:
United States, China, America, Europe, Asia, and Southeast Asia

46. China-Russia Relations

Author:
Yu Bin
Publication Date:
07-2009
Content Type:
Journal Article
Journal:
Comparative Connections
Institution:
Center for Strategic and International Studies
Abstract:
Between June 14-18 Russian and Chinese heads of state interacted on a daily basis at three summits: the Ninth annual SCO summit and the first ever Brazil, Russia, India, and China (BRIC) summit (both in Yekaterinburg), and their own annual bilateral meeting in Moscow. The locus of Russian-China relations was, therefore, “relocated” to Russia. Economic issues dominated these meetings as the global financial crisis deepened. Mounting danger on the Korean Peninsula and instability in Iran were also recurring themes. President Hu Jintao's five-day stay in Russia ended when he joined President Dmitry Medvedev to watch a spectacular performance by Chinese and Russian artists in Moscow's Bolshoi Theatre for the 60th anniversary of Russian-China diplomatic relations.
Topic:
NATO and Financial Crisis
Political Geography:
Russia, China, Iran, India, and Brazil

47. The G-2 Mirage

Author:
Elizabeth C. Economy and Adam Segal
Publication Date:
05-2009
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
A heightened bilateral relationship may not be possible for China and the United States, as the two countries have mismatched interests and values. Washington should embrace a more flexible and multilateral approach.
Topic:
Foreign Policy and Financial Crisis
Political Geography:
United States, China, Washington, Israel, and Palestine

48. The Internationalization of Chinese and Indian Firms: Trends, Motivations and Policy Implications

Author:
Sandeep Kapur and Suma Athreye
Publication Date:
01-2009
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
The last two decades have seen a significant rise in the internationalization of firms from developing economies. In addition to their growing participation in international trade, a number of leading emerging economies are contributing to growing outflows of foreign direct investment (FDI) and cross-border mergers and acquisitions. According to the 2008 World Investment Report, outward flows of FDI from developing countries rose from about US$6 billion between 1989 and 1991 to US$225 billion in 2007. As a percentage of total global outflows, the share of developing countries grew from 2.7% to nearly 13.0% during this period.
Topic:
International Relations, Economics, Globalization, International Political Economy, Markets, Foreign Direct Investment, and Financial Crisis
Political Geography:
United States, China, and India

49. Indian FDI falls in global economic crisis: Indian multinationals tread cautiously

Author:
Jaya Prakash Pradhan
Publication Date:
08-2009
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Just over a year ago, outward foreign direct investment (OFDI) from India seemed to be on a path of rapid and sustained growth. Its annual average growth of 98% during 2004–07 had been unprecedented , much ahead of OFDI growth from other emerging markets like China (74%), Malaysia (70%), Russia (53%), and the Republic of Korea (51%), although from a much lower base. Much of this recent growth had been fuelled by large-scale overseas acquisitions, however, and it faltered when the global financial crisis that started in late 2007 made financing acquisitions harder.
Topic:
Development, Economics, Foreign Direct Investment, and Financial Crisis
Political Geography:
Russia, China, Malaysia, India, and Korea

50. While global FDI falls, China's outward FDI doubles

Author:
Ken Davies
Publication Date:
05-2009
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In 2008 global FDI fell by around 20%, while outward FDI from China nearly doubled. This disparity is likely to continue in 2009 and 2010 as China invests even more overseas. What is driving this continuing surge in China's outward FDI?
Topic:
International Trade and Finance, Foreign Direct Investment, and Financial Crisis
Political Geography:
China and Asia

51. Indian FDI falls in global economic crisis: Indian multinationals tread cautiously

Author:
Jaya Prakash Pradhan
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Just over a year ago, outward foreign direct investment (OFDI) from India seemed to be on a path of rapid and sustained growth. Its annual average growth of 98% during 2004–07 had been unprecedented , much ahead of OFDI growth from other emerging markets like China (74%), Malaysia (70%), Russia (53%), and the Republic of Korea (51%), although from a much lower base. Much of this recent growth had been fuelled by large-scale overseas acquisitions, however, and it faltered when the global financial crisis that started in late 2007 made financing acquisitions harder.
Topic:
Economics, International Political Economy, International Trade and Finance, Markets, Foreign Direct Investment, and Financial Crisis
Political Geography:
Russia, China, South Asia, Malaysia, and Korea

52. The United States and the Asia-Pacific Region: National Interests and Strategic Imperatives

Author:
James J. Przystup
Publication Date:
04-2009
Content Type:
Working Paper
Abstract:
From its earliest days, the United States has been engaged in trade with East Asia. In February 1784, the Empress of China left New York harbor, sailing east to China, arriving at Macau on the China coast in August of that year. The ship returned to the United States the following May with a consignment of Chinese goods, which generated a profit of $30,000. In 1844, China granted the United States trading rights in the Treaty of Wanghia.
Topic:
Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States, China, Asia, and Australia/Pacific

53. Soft budget constraints in China: Evidence from the Guangdong hospital industry

Author:
Karen Eggleston, Mingshan Lu, Congdong Li, Jian Wang, Zhe Yang, Jing Zhang, and Yu-Chu Shen
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
Using data from 276 general acute hospitals in the Pearl River Delta region of Guangdong Province from 2002 and 2004, we construct a preliminary metric of budget constraint softness. We find that, controlling for hospital size, ownership, and other factors, a Chinese hospital's probability of receiving government financial support is inversely associated with the hospital's previous net revenue, an association consistent with soft budget constraints.
Topic:
Government, Health, and Financial Crisis
Political Geography:
China and Asia

54. Effects of the Financial Crisis on The U.S.-China Economic Relationship

Author:
Eswar S. Prasad
Publication Date:
08-2009
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The U.S. and China are two of the dominant economies in the world today and the nature of their relationship has far-reaching implications for the smooth functioning of the global trade and financial systems. These two economies are becoming increasingly integrated with each other through the flows of goods, financial capital, and people. These rising linkages of course now stretch far beyond just trade and finance, to a variety of geopolitical and global security issues. Getting this relationship right is therefore of considerable importance.
Topic:
Financial Crisis
Political Geography:
United States and China

55. China's Employment Crisis – A Stimulus for Policy Change?

Author:
Günter Schucher
Publication Date:
09-2009
Content Type:
Journal Article
Institution:
German Institute of Global and Area Studies
Abstract:
In the face of severe job problems, China's government has adopted a huge stimulus package in a bid to achieve eight per cent economic growth, which is said to guarantee at least enough jobs for the new entrants to the labour market. The real situation, however, will be much grimmer than statistics indicate. Unregistered groups like unemployed rural migrants, job-searching college graduates, laid-off workers and others together with the officially registered unemployed and the new market entrants could add up to 42 million altogether, while even the most optimistic estimates say only around 15 million new jobs could be created in 2009. Nevertheless, the stimulus package demonstrates an at least temporary shift in economic policy from capital-intensive to labour-intensive growth. Additionally, the new initiatives to boost social-security spending could help to address the grievances of the most vulnerable groups in the labour market. The Chinese government's reaction to the emerging employment crisis once again demonstrates the often underestimated adaptability of China's leadership.
Topic:
Financial Crisis
Political Geography:
China

56. External imbalances and the G20

Author:
Stephen Grenville
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
Lowy Institute for International Policy
Abstract:
International external imbalances have been blamed for playing a central role in the Global Financial Crisis. China's large external surplus usually figures prominently in these explanations. While a more balanced account of the causes of the crisis would give only a modest role to external imbalances there seems little doubt that some adjustment of these imbalances over the next few years is both inevitable and desirable, not because external imbalances in themselves are inherently undesirable, but because some of the specific components of today's current balances are unsustainable. Markets could bring about these necessary adjustments over time. History, however, tells us that market-driven adjustments are often accompanied by exchange-rate overshooting and trade- threatening protectionist responses.
Topic:
Economics, International Trade and Finance, and Financial Crisis
Political Geography:
China

57. Beyond Market Forces: Regulating the Global Security Industry

Author:
James Cockayne, Emily Speers Mears, Alison Gurin, Iveta Cherneva, Sheila Oviedo, and Dylan Yaeger
Publication Date:
07-2009
Content Type:
Working Paper
Institution:
International Peace Institute (IPI)
Abstract:
In late 2008, seventeen states, including the US, UK, China, Iraq, Afghanistan, and others, endorsed the Montreux Document on Pertinent International Legal Obligations and Good Practices for States related to Operations of Private Military and Security Companies during Armed Conflict (2008). This provides important guidance to states in regulating private military and security companies (PMSCs). However, there is a need to do more, to provide increased guidance to the industry and ensure standards are enforced.
Topic:
Security, Globalization, Markets, International Security, and Financial Crisis
Political Geography:
Afghanistan, United States, China, Iraq, and United Kingdom

58. Assessing the slowdown in China

Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
Growth in China has slowed dramatically over the past year from a blistering pace of over 13% in 2007 to just 6.1% in 2009 Q1. A turning in the domestic investment cycle has been coupled with a dramatic slowdown in external demand. Despite an unprecedented fiscal package, in the near term we expect growth to dip below 6% but it should begin to recover strongly towards the end of this year as the fiscal stimulus comes on stream, rising to 10% by end-2010. Indeed, some green shoots of recovery are already emerging with a pickup in manufacturing new orders and strong growth in credit. Domestic demand may be recovering but the impact of the external crisis on China’s growth prospects is uncertain. Nevertheless, more fundamental downside risks remain if rising unemployment leads to social instability or if an increase in loss-making investments uncovers weakness in the banking sector. By looking at what has driven the recent slowdown and how this compares with previous downturns, we can shed light on China’s prospects going forward and the major risks.
Topic:
Economics and Financial Crisis
Political Geography:
China and Asia

59. China's Economic Policy in the Time of the Global Financial Crisis: Which Way Out?

Author:
Margot Schüller and Yun Schüllerr-Zhou
Publication Date:
12-2009
Content Type:
Journal Article
Institution:
German Institute of Global and Area Studies
Abstract:
This contribution analyses the impact of the global financial crisis on the Chinese economy and the policies implemented by the Chinese government to cope with it. We argue, first, that China has not been able to decouple its economic performance from that of the U.S. and other developed countries. Second, although economic growth in the second quarter of 2009 showed that the stimulus package is working, the current development does not seem to be sustainable. In order to avoid another round of overheating, the government needs to adjust its stimulus policy. Third, the current crisis offers opportunities to conduct necessary structural adjustments in favour of more market-based and innovative industries, more investment by private companies and a stronger role of private consumption in economic growth. Fourth, with the external demand from the OECD countries declining, Chinese export companies need to further diversify their international markets and re-orient their production and sales strategies to some extent towards the domestic market.
Topic:
Economics, Government, and Financial Crisis
Political Geography:
United States and China

60. Sharing the Pain: The Global Struggle Over Savings

Author:
Michael Pettis
Publication Date:
11-2009
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
In September, the Obama administration imposed tariffs on Chinese tires. In October, the U.S. Department of Commerce announced it would launch an investigation into imports of seamless steel pipes from China. That same month, the U.S. Chamber of Commerce and the U.S.–China Business Council, two groups that in the past have defended Chinese policies, testified to the Office of the U.S. Trade Representative that Chinese contracting rules, technical standards, and licensing requirements were protectionist.
Topic:
Economics, Globalization, Foreign Direct Investment, and Financial Crisis
Political Geography:
China, Middle East, and Asia