Dos and don'ts for Chinese companies investing in the United States: Lessons from Huawei and Haier

The implementation of the Chinese government's “Go Global” policy in 2000 has led to an unprecedented surge in Chinese outward foreign direct investment (OFDI). While Asia remains a favorite destination, the 2008–09 global financial crisis has presented opportunities for Chinese companies interested in cross‐border mergers and acquisitions in the United States. Chinese companies are keen on the United States because of access to the world's largest market and technology. However, Chinese companies have had to deal with difficulties ranging from regulatory hurdles and cultural differences. Given that the majority of OFDI is still carried out by state‐owned enterprises (SOEs), the primary obstacle for Chinese investors at the federal level is the Committee of Foreign Investment to the United States. This has proven to be an insurmountable obstacle so far for Chinese telecom company Huawei. However, the US investment environment is not all gloom and doom for Chinese companies. There are success stories too like Haier, which has managed to overcome cultural differences. This article aims to do a comparative study of Huawei and Haier and highlight the lessons the companies offer for Chinese companies interested in investing in the United States. © 2011 Wiley Periodicals, Inc.     

An Assessment of Environmentally‐ related Non‐tariff Measures

International trade can affect the environment in different ways. This may justify the introduction of border measures by the importing countries. In addition to various dispositions in the GATT, GATS, TRIPs agreements, as well as in the Agreement on Agriculture, this issue is regulated by the agreements on Technical Barriers to Trade (TBT) and on the application of Sanitary and Phyto‐sanitary standards (SPS). Despite these rules, abuse of environmental arguments for protectionist reasons remains an open issue. In order to disentangle protectionism from dispositions justified on the grounds of true environmental concerns, we systematically review notifications of SPS and TBTs by importing countries at the tariff line level. Trade is considered as being potentially affected when an environmental SPS/TBT is notified on grounds of environmental concerns. Affected trade is defined as imports by countries notifying such barriers. Protectionist use of environmental barriers is likely when only a limited number of countries impose an environmental obstacle on the imports of a given product. Considering data for 2001, we find that 88 per cent of the value of world trade is in products potentially affected by such measures, while 39 per cent of the value of world imports is potentially subject to a protectionist use of such measures. Agriculture, the automobile industry, the pharmaceutical industry and many other sectors are concerned.     

Stabilizing the rouble: Is there a case for a new Fisher rule?

The management of the exchange rate by the Russian authorities obviously lacks both effectiveness and efficiency. “Black Tuesday” has vividly shown how vulnerable the rouble is to speculative attacks. In this article, a “classical” proposal is evoked and is discussed as an alternative to the present exchange-rate policy from the sustainability point of view.     

Rapid rise of China's semiconductor industry: What are the implications for Singapore?

Lately, there has been a rush of foreign investment commitments in China's semiconductor industry, giving rise to predictions of a semiconductor revolution in the world's most populous country. Pull factors include China's entry into the World Trade Organization (WTO), which would clarify trading and investment rules, government incentives, and, of course, burgeoning domestic demand. For the moment, because of U.S. export restrictions, China's chip industry will be kept behind the technology curve by around five years. However, its ample supply of engineers and low labor costs will aid in the development of the assembly & test and design sectors, which are labor‐intensive. But given strong government commitment, the industry is likely to continue to progress upward, gaining from the diffusion of high‐tech know‐how through its alliances with multinational corporations and tier‐one foundries. In the industry's value chain, there is potential for Taiwan and China to complement each other in both domestic and global markets, across both high‐ and low‐end technology segments, and across the entire chain of activities. To meet the challenges, Singapore needs to further leverage on its competencies in infrastructure and logistics, as well as the well‐established ASEAN production network for greater economies of scale. For Singapore's semiconductor industry to remain competitive, there is a need to strengthen the full value chain, from integrated circuit (IC) design to wafer fabrication to packaging & test, by attracting and building up companies specializing in different competencies. Singapore semiconductor manufacturers should continuously strive to stay at the technology forefront and provide competitive customer services. © 2004 Wiley Periodicals, Inc.     

Sustainability of national debt in Europe

There are at least two reasons why sustainability of public debt is an issue of increasing importance. First, public choice considerations show the danger of excessive use of deficit finance in a democracy. Second, the conditions of a European Monetary Union imply further incentives for deficit finance. The following paper presents various approaches to assessing the sustainability of public debt and applies them to the EC countries.