Does the Domestic Value Added Induced by China＇s Exports Really Belong to China？

Since 2001, the exports of foreign‐invested enterprises (FIEs) have accounted for more than 50 percent of China's total exports. As foreign capital occupies a high proportion of the total capital of FIEs, most FIEs' capital gains are foreign factor income. Although these gains are calculated as a part of China's GDP, they do not belong to China's national income. To determine the real contribution of exports to China's welfare, the present paper analyses the impact of exports on China's national income using a non‐competitive input–output model capturing processing trade. The results show that every US$1000 of China's exports generates US$506.8 of national income. The real contribution of exports to China's welfare is much smaller than what we expected. This suggests that China should endeavor to improve the gains from international markets or find another engine to maintain its economic growth.     

Institutions and FDI location choice: The role of cultural distances

Using an extensive data set on foreign invested enterprises (FIEs) in the Chinese mainland, we compare the sensitivities of the location choice of foreign direct investment (FDI) from six major source countries/areas (Hong Kong, Taiwan, US, EU, Japan and Korea) toward the variation in the strength of economic institutions across China's regions. It is found that FIEs from the source countries/areas that are culturally more remote from China often exhibit a stronger aversion to regions with weaker economic institutions. Moreover, this pattern is often more salient when FDI takes the form of fully-owned enterprises (FOEs) than when it takes the form of joint ventures (JVs).     

The Strategy of foreign-invested manufacturing enterprises in China: Export-orientated and market-orientated FDI revisited

This paper examines export-orientated and market-orientated foreign direct investment (FDI) in China's manufacturing industry. Based on Fung's () survey estimation of China's market-orientated FDI in 1992 and China's Third National Industrial Census in 1995, we quantify the proportion of market-orientated FDI in China 1992–2002. By combining and verifying various data sources, our estimation shows that market-orientated FDI accounts for the majority of China's total inward FDI in manufacturing industry and has grown faster than export-orientated FDI over the period 1992–2002. Our industry level analysis suggests that Overseas Chinese investors are more export-orientated than Western investors. The study suggests that many inward investors follow a dual market strategy. The coexistence of export-orientated and Chinese domestic market-orientated FDI is a reflection of the flexibility of MNEs to adjust and adapt ownership attributes to the local market context. The study offers insights into the evolutionary development path taken by foreign-invested manufacturing enterprises in China.     

Foreign direct investment in China: Policy,recent trend and impact 1

One of the most important elements of China's economic reform has been the promotion of foreign direct investment (FDI) inflow. Government polices on FDI have gone through different stages in their main objectives since the late‐1970s, from gradually opening to foreign investors, to actively encouraging inward investment, directing FDI in accordance with domestic industrial restructuring, and complying with China's World Trade Organization (WTO) obligations. FDI in China has experienced rapid growth especially since the mid‐1990s, as well as structural change. Most of the earlier investments were small scale, labor‐intensive and export‐oriented. In recent years, more investment has been large scale and more capital and technology intensive, aiming at both domestic and export markets. Moreover, increasingly more investment has come from the industrial world, and has located along the eastern coastal regions, in additional to the two southeastern provinces. FDI has played a crucial role in China's rapid growth, economic transition, and, mostly importantly, integration with the world. China's recent accession to the WTO provides more incentives to foreign investors. At the same time, it will also result in more intense competition for domestic firms.     

Economic growth,local industrial development and inter-regional spillovers from foreign direct investment: Evidence from China

In many countries inward foreign direct investment (FDI) typically concentrates in a few regions. However, there is little empirical evidence on whether spatially concentrated FDI boosts economic growth in other regions within the same country. We use a dataset that covers 96% of Chinese cities from 1996 to 2004 and find that “inter-regional spillovers” from FDI concentrated in China's coastal cities have a positive and significant effect on the growth of inland cities. In addition, an inland city's industrial development affects its absorptive capacity to gain such inter-regional spillovers from coastal FDI.     

东道国基础设施质量对中国进出口贸易的影响——基于“一带一路”沿线51个国家的实证分析

基础设施建设是经济社会发展的重要支撑,对国家经贸关系进一步发展具有桥梁作用。基于“一带一路”沿线51个国家2011—2019年面板数据,构建拓展引力模型实证分析东道国基础设施质量分别对中国进口与出口的影响。研究发现：东道国基础设施质量会显著促进中国的进口与出口贸易,但对中国进口贸易促进作用强于出口,且东道国GDP增长促进了中国进口与出口贸易增加,其对中国进口贸易促进作用大于出口;而东道国与中国的地理距离对中国进口贸易限制作用大于出口,东道国与中国为邻国、与中国具有共同语言及签订自由贸易协定会推动中国对其进出口贸易增长。在此基础上,提出促进中国与沿线国家进出口贸易的对策建议。     

How dependent is the Chinese economy on exports and in what sense has its growth been export-led?

This paper studies the interaction between foreign trade and domestic demand and supply in China's economic transformation. It compares China's export dependency with other economies using input–output analysis. The paper also conducts econometric analysis of provincial level data to examine causality between the growth of foreign trade and components of domestic demand, and causality between the growth of foreign trade and total factor productivity. The main message is that China's export dependency is significantly lower than implied by the headline exports-to-GDP ratio. Moreover, the contribution of export to economic growth in China came mainly from its impact on total factor productivity growth from a supply perspective rather than its multiplier effect from a demand perspective. This relationship was found to be stronger in the more developed coastal areas than in the less developed inland areas.     

China： Unscathed through the Global Financial Tsunami

This paper investigates the reasons behind the resilience of China＇s economy to the global financial tsunami. China ＇s economy is lowly leveraged in its banking, household, public and external sectors and, therefore, is less plagued by the global deleveraging than most developed economies. Chinese domestic sectors have improved significantly over the past decade, giving them larger capacity to cope with external shocks than during the Asian financial crisis a decade ago. Contrary to the conventional wisdom that China＇s economic growth is highly dependent on exports, we find that the main growth engine for China is domestic demand. Destocking, rather than falling exports, was the main cause of the sharp economic slowdown in China in late 2008 and early 2009. Therefore, the global economic slowdown should have limited impact on China＇s economy. We forecast a sustained eeonomic recovery in China in 2009-2011, with real GDP growth exceeding 10 percent in 2010.     

Geographical Distribution of Foreign Investment in China：Industrial Clusters and Their Significance

The incorporation of massive amounts of foreign direct investment (FDI) has been a major motive force behind the high-speed growth of the Chinese economy over the last decade. A high degree of geographical concentration in certain of this country is a salient feature of foreign invested enterprises (FIEs). FIEs in some industries are closely clustered in industrial zones ranging from several kilometers to more than 100 km in diameter. Such industrial clusters are a remarkable phenomenon among FDI industries. High FDI concentration is having a striking impact on the competitiveness of the enterprises involved and the regions where they are located.     

Knowledge capital,innovation, and growth in China

We study the relationship between industry-level investments in intangible knowledge capital (KC) and three key economic indicators in China. We find evidence consistent with the hypothesis that investments in KC are productivity-enhancing among domestically owned and foreign invested enterprises (FIEs). Consistent with other research, we find that China's KC generates new patents, but fewer than in major industrialized economies. Finally, we find that China's comparative advantage has shifted toward those sectors where domestic firms have made larger investments in KC, but this trend appears to be independent of the KC accumulated by FIEs.     

FDI,Export Sophistication,and Quality Upgrading: Evidence from China's WTO Accession

This paper identifies a positive effect of FDI liberalization on manufacturing export sophistication, exploiting China’s adjustment of its Catalogue for the Guidance of Foreign Investment Industries upon its accession to WTO. It further investigates the underlying causes in the lines of firm ownership type, trade mode, product type, and intensive vs. extensive margins. The positive effect comes from, e.g., the increase in the export share of foreign-invested enterprises (FIEs) and firms with processing trade, and the increase in the export sophistication of privately-owned enterprises (POEs), of ordinary trade, and of intermediate goods. The intensive margin rather than extensive margin is accountable for the effect. Liberalizing FDI does not seem to have any significant effect on product quality.     

The Determinants and Motivations of China's Outward Foreign Direct Investment: A Spatial Gravity Model Approach

Abstract

The study attempts to investigate the features and determinants of China's outward foreign direct investment (OFDI) into 138 countries and Chinese firms' investment strategies over the 2003–2009 period using an augmented gravity model with spatial linkages. The respective evaluations of China's OFDI are indicative of the important role played by non-financial OFDI. At the same time, Chinese firms prefer to invest in high-tech industries in developed countries while also focusing on the extraction of natural resources around the world. The empirical findings show that the host country's economic size has a significantly positive effect in terms of promoting Chinese OFDI. Chinese firms favour a complex-vertical platform in the developed countries while they prefer a market potential foreign direct investment (FDI) surrounding the host developing countries and an export-platform FDI in the petroleum exporting countries based on the surrounding market potential effect and spatial effect. The fuel extraction motive plays a key role in China's OFDI in line with the realities of Chinese FDI strategies in recent years.     

Does China have an impact on foreign direct investment to Latin America?

We analyze empirically whether the emergence of China as a large recipient of FDI has affected the amount of FDI received by Latin American countries. Allowing for the structural break related to China's WTO accession, we found a significant negative impact of Chinese inward FDI on that of Mexico until 2001 and on that of Colombia after that date. The rest of Latin American countries do not seem to be affected by Chinese inward FDI. For the region as a whole, there is no significant Chinese effect on Latin America’s FDI.     

Has China Crowded out Foreign Direct Investment from Its Developing East Asian Neighbors？

This paper applies a gravity model to investigate the determinants of foreign direct investment (FDI) in East Asia. Economic fundamentals, such as market size, per capita income and country risk indicators, economic and cultural ties, exchange rate volatilities and information asymmetry are found to be important determinants for FDI. Globally, the inward FDI among high-income OECD economies declined significantly on average over the period of 1990-2003, whereas the inward FDI of the high-income OECD economies in emerging market economies gained substantially. In the East Asian region, the ASEAN-4 (Indonesia, Malaysia, the Philippines and Thailand) received above-average inward FDI from the high-income OECD economies after controlling for their economic fundamentals. By contrast, China's FDI from the high-income OECD economies is below average relative to its economic fundamentals. Therefore, it is difficult to establish that China has crowded out FDI from its developing ASEAN neighbors.     

Input Trade Liberalization and the Export Duration of Products: Evidence from China

This paper introduces a quasi‐natural experimental framework into trade policy evaluation and reassesses China's trade liberalization through the survival of export products. We use propensity score matching and China's dual trade system to design a quasi‐natural experiment based on Chinese industrial enterprises, customs import and export, and tariff data over the period of 2000–2006; we then use survival analysis to study the impacts of China's trade liberalization on the export duration of manufacturing firms’ products. We find that the substantial reduction in import tariffs after China's accession to the World Trade Organization enhances the export duration of firm products, indicating that trade liberalization ameliorates the survival of export products. The promotion effects of tariff reduction on export duration are obviously stronger for core products than for noncore products.     

China's Overinvestment and International Trade Conflicts

For a long time, China's impressive growth performance has been driven by investment and high productivity gains. Based on a discussion of possible overcapacities and overinvestment in China, this paper investigates the sustainability of China's investment and export‐driven growth model. Since the turn of the millennium, buoyant capital inflows and low interest rates have been at the root of overinvestment and misallocation of capital, which necessitated export subsidies to clear markets. The overinvestment boom is argued to have ended around 2014. Since then, the overcapacities have weakened China's bargaining position in the US–Chinese trade conflict and have tempted Chinese authorities to postpone the restructuring of the Chinese economy by providing low‐interest credit. The gradual reemergence of quasi‐soft budget constraints is seen to undermine China's long‐term growth potential.     

The global recession and China's stimulus package: A general equilibrium assessment of country level impacts

A dynamic computable general equilibrium model is developed to assess the impact of the recent global recession and the Chinese government's stimulus package on China's economic growth. By designing two scenarios – one with and one without the stimulus package – the model results show that GDP growth rate in 2009 could have fallen to 2.9% without the stimulus package, mainly as a result of the sharp decline in exports of manufactured goods. Under the stimulus scenario, with the generated additional demand on investment goods, the Chinese economy grows 8–10% in 2009 and the succeeding years. The model also measures the overall gains of the stimulus package, and the cumulative GDP growth difference between the two scenarios for 2009–15 is about RMB76 trillion.     

Dynamic relationship between China's inward and outward foreign direct investments

This paper studies the dynamic relationship of China's inward and outward foreign direct investments (FDI). It first identifies the key determinants of China's outward FDI (OFDI) in 172 host countries during 2003–2009 using a partial stock adjustment model. It finds strong evidence of dynamic adjustment in China's OFDI stock with an agglomeration effect. The dynamic adjustment and agglomeration effects are stronger in “high-tech” countries than in “low-tech” ones but indifferent in host country's resource endowments and income levels. The empirical results suggest that there exists a substantial adjustment cost in China's OFDI and that China's existing OFDI stock can gradually adjust toward its long-term equilibrium level, which is not only greater but also more volatile than the actual stock. Of particular interest is that we find a strong and positive relationship between lagged inward FDI (IFDI) and contemporaneous OFDI, implying that capital outflow from China has been partially induced by the countries which have invested in China.     

China's post-economic reform growth: The role of FDI and productivity progress

China has become the top FDI destination among all developing countries and remained host to the world's largest share of foreign direct investment receipts since its accession to the WTO in 2001. Given the impressive growth performance and FDI influx into China, the two globalized delta economies (GDEs), Pearl River Delta (PRD) and Yangtze River Delta (YRD), have continued to out-perform all other regions in China in terms of FDI absorption and growth. The role that inward FDI plays in the process of regional development and the exact channels through which economic growth would be affected are investigated by panel data estimations of the GDEs at the city level since China's economic opening and reform. This research shows consistent results with some recent findings in other developing countries in that FDI exerted spillover effects and affected productivity (TFP) growth of the recipients. While TFP was found to be increasing overtime in the GDEs cities and facilitated economic growth in both PRD/YRD regions, major technology- and knowledge-related factors including R&D and human capital other than FDI also played critical roles in TFP enhancement and regional growth. The endogeneity of TFP and the simultaneous relations of FDI in affecting TFP and output growth are also addressed in this regard.     

近20年我国国防支出与经济增长关系分析

以1997年到2017年间国防支出与GDP的数据为基础，对近20年来我国国防支出与经济增长的关系进行了探讨，并进一步地分析了在军民融合过程中经济建设与国防建设之间的发展关系。首先，通过描述性统计、相关性分析、回归分析等方法，初步探讨了国防支出与GDP之间的关系；然后基于VAR模型进行了相关的计算和分析验证；最后综合这些方法，对结果进行了较为系统全面的讨论。结果显示，近20年来，我国国防支出与经济增长基本呈正相关关系，经济增长与国防支出能够相互促进，呈现一种良性的关系。长期来看，不仅经济的增长有利于军费投入的提高，反过来国防支出也可以调节经济总量，促进现有资源的充分利用，从而促进经济增长。这从侧面反映出近年来我国国防建设与经济建设、安全与发展能够实现统筹兼顾、军民融合总体发展成效显著，建设军民一体化的国家战略协调能力正在不断提高。