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Integrating china into the global economy

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Integrating china into the global economy

Abstract

China's accession to the World Trade Organization (WTO) has been hailed as the biggest coming-out party in the history of capitalism. Its membership eventually will contribute to higher standards of living for its citizens and increased growth for its economy. But why would the Chinese communist regime voluntarily agree to comply with the many complex rules of the global trading system since it has already become the world's seventh largest trading country while avoiding these constraints by remaining outside the system? The answer to this question forms the basis for this new book. Nicholas Lardy explores the many pressures on the Chinese government, both external and internal, to comply with the standards of the rule-based international trading system. Lardy points out that, prior to entry into the WTO, China enjoyed high growth rates and more foreign direct investment than any other emerging economy. He draws on a wealth of scholarship and experience to explain how China's leadership expects to leverage the increased foreign competition inherent in its WTO commitments to accelerate its domestic economic reform program, leading to the shrinkage and transformation of inefficient, money-losing companies and hastening the development of a commercial credit culture in its banks. Lardy answers a number of other questions about China's new WTO membership, including its effects on bilateral trade with the United States; the possibility that China will use its power to reshape the WTO in the future; the degree to which the terms of China's entry were more or less demanding than those for other new members; the ability of China's economy to successfully open to new imports; and the prospects for new growth in various sectors of China's economy made possible by WTO accession. This book will become an important tool for those who wish to understand China's new role in the global trading system, to take advantage of the new opportunities for investment in China, or simply to gain a better understanding of what former President Clinton called a "once in a generation event."
... Acceding countries are asked to make concessions without being able to make reciprocal demands, while existing WTO members are entitled to make demands without making any concessions, thus subjecting acceding members to enormous pressure. 14 For example, see ( [50]: [79][80]; ( [53]: 299-339); [82]. 15 WTO members make two kinds of commitments: rules-based commitments which are normally uniform for all WTO members and market access commitments which are made on a member by member basis and thus differ among members. ...
... It might be claimed that an example of China promoting change in the international investment system is related to the national security exception in BITs. Apprehensive about the possible rejection of Chinese investment based on national security concerns, China is working to restrict the use of the national security exception, which, in some cases, has been expanded by many countries Bfrom countering military threats to tackling economic crisis and protecting strategic industry^( [87]: viii, 7-24) 50 to justify rejecting investment. Although China has a national security exception in its own legislation [56,79], one of China's main goals in its BITs is to limit regulatory discretion of the national security exception [40]. ...
... Recall the case of China National Offshore Oil Corporation's (CNOOC) failed attempt in 2005 to take over US oil firm Unocal after CNOOC was basically forced to abandon its offer following US Congressional intervention; or President Obama's 2012 use of executive authority to block Ralls Corporation, a Chinese-owned company, from acquiring wind farms in Oregon, invoking national security, ostensibly because the wind farms were located near US 50 For example, Australia's foreign investment regime has a 'national interest' exception which includes national security but also covers impact of investment on the economy ([5]: 87). Navy airspace [7,104]. ...
... Opening up the Chinese economy, as well as strengthening its regulatory capacity, have been key elements of China's transformation since the end of the 1970s. In the 1980s, a foreign trade policy was developed (Lardy 2004), while institutions such as the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) and the State Intellectual Property Office (SIPO) were established. China also became a member of several international economic organizations such as the World Intellectual Property Organisation (WIPO) and ratified international treaties and conventions (Yang 2003). ...
... Part of this reform agenda was a radical reduction of trade barriers and a revolutionary transformation with respect to IPR protection, with the explicit aim to encourage greater foreign competition (mainly for export sectors) and to attract FDI in order to boost efficiency (Yang 2003;Lardy 2004;Morrison 2013). WTO membership was seen as an important way to achieve this. ...
... China also agreed to bring its trade-and IPR regimes into compliance with existing WTO Agreements, which required a massive revision of existing trade-patent-, trademark-and copyright laws and the issuing of new implementing rules and regulations (Lardy 2004;Massey 2006 In short, China has considerably increased its regulatory capacity and capability over the last decades. This was in part derived from the original lock-in from WTO negotiations, which showed decision-makers the way to follow. ...
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Since the beginning of the 21st century we have witnessed a proliferation of Preferential Trade Agreements (PTAs) in Asia Pacific. China has been at the forefront of this development. Initially, China's PTAs were very shallow and mainly aimed at building friendly relationships with developing countries. However, over time, China has started to negotiate deeper PTAs with developing and developed countries alike. This notable shift has thus far been understood to result from four broad motivations: China's desire to access key export markets; the facilitation of regional production networks; to address resource security concerns; and/or to further geostrategic interests and political influence. We propose that these motives are not sufficient to fully account for China's new generation trade agreements. We suggest that China is increasing its integration into the world economy to push for domestic marketization and reform by credibly committing to trade liberalization through PTAs. Deep and comprehensive PTAs oblige a country to follow a set of rules that leave little leeway to violate the terms. In order to successfully implement and enforce PTA commitments, China has also gradually strengthened its regulatory state by investing in regulatory capacity and capability in the field of trade policy. We test the plausibility of our argument through an in‐depth analysis of the PTAs signed by China since 2000 and find evidence that China's PTAs are indeed in part driven by a desire to lock in domestic economic reform, which has gone hand in hand with a strengthening of its regulatory state.
... Opening up the Chinese economy, as well as strengthening its regulatory capacity, have been key elements of China's transformation since the end of the 1970s. In the 1980s, a foreign trade policy was developed (Lardy 2004), while institutions such as the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) and the State Intellectual Property Office (SIPO) were established. China also became a member of several international economic organizations such as the World Intellectual Property Organisation (WIPO) and ratified international treaties and conventions (Yang 2003). ...
... Part of this reform agenda was a radical reduction of trade barriers and a revolutionary transformation with respect to IPR protection, with the explicit aim to encourage greater foreign competition (mainly for export sectors) and to attract FDI in order to boost efficiency (Yang 2003;Lardy 2004;Morrison 2013). WTO membership was seen as an important way to achieve this. ...
... China also agreed to bring its trade-and IPR regimes into compliance with existing WTO Agreements, which required a massive revision of existing trade-patent-, trademark-and copyright laws and the issuing of new implementing rules and regulations (Lardy 2004;Massey 2006 In short, China has considerably increased its regulatory capacity and capability over the last decades. This was in part derived from the original lock-in from WTO negotiations, which showed decision-makers the way to follow. ...
Article
Full-text available
Since the beginning of the 21 st Century we have witnessed a proliferation of Preferential Trade Agreements (PTAs) in the Asia Pacific. China has been at the forefront of this development. Initially, China's PTAs were very shallow and mainly aimed at building friendly relationships with developing countries. However, over time China has started to negotiate deeper PTAs with developing and developed countries alike. This notable shift has thus far been understood to result from three broad motivations: China's desire to access key export markets; the facilitation of regional production networks; to address resource security concerns; and/or to further geostrategic interests and political influence. We propose that these motives are not sufficient to fully account for China's new generation trade agreements. We suggest that China is increasing its integration into the world economy to push for domestic marketization and reform by credibly committing to trade liberalization through PTAs. Deep and comprehensive PTAs tie a country's hands and constrains it to obey a set of rules that permit little leeway for violating commitments. In order to successfully implement and enforce PTA commitments, China has also gradually strengthened its regulatory state by investing in regulatory capacity and capability in the field of trade policy. We test the plausibility of our argument through an in-depth analysis of China's PTAs signed since 2000 and find evidence that China's PTAs are indeed in part driven by a desire to lock-in domestic economic reform and that this has gone hand in hand with a strengthening of its regulatory state
... Most recently, whether China can maintain such growth in the years to come has been the subject of a lively debate inside and outside China. Judged by the overall situation of economic growth, China experts tend to predict that China's economy will keep on growing (see, e.g., Lardy, 2002), especially with China's reformist leaders moving along with the global economy in a liberal direction. ...
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... Indeed, China's economic rise has been facilitated by its integration into a global capitalist economic system in general and its accession to the World Trade Organization (WTO) in particular (Lake, 2018). Despite the misgivings expressed by some in China about the onerous conditions attached to its accession to the WTO in 2001 (Lardy, 2002), there is little doubt that this experience provided Chinese policymakers with an important entr ee into the global trading order constituted by American-inspired liberal principles and norms. ...
Article
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Despite systemic internal and external differences, Australia and China have shown striking similarities in their pursuit of disputed maritime resource and jurisdictional claims. This high-stakes area of international politics is governed by a codified, globally accepted international legal regime (the United Nations Convention on the Law of the Sea), making it an important case for examining the relationship between states' foreign policies and the 'rules-based international order'. In the South China Sea, Beijing is haunted by the legacy of its strong geopolitically driven support for an expansive law of the sea regime in the 1970s.
... Those who believe in neoliberalism and interdependence suggest that as China integrates itself further in the world economy, Chinese foreign re lations tend to be more open and more subject to external influence. 5 The practical expectations and the theoretical paradigm of Brantly Womack's chapter differ fundamentally from those both of realism and of interdependence. China as a regional power and the United States as a global power are in similar situations: each must relate to countries that in general are smaller in terms of population, economic capacity, and mili tary expenditures. ...
... With an escalation of comparative advantage by virtue of the export-led growth strategy, the socialist-market-economy model has integrated advantage of exporting goods and services from labor intensive industries and its position in international trade to effectively boost its currency value of Renminbi (RMB) (Auboin & Ruta, 2013). China has also fostered a substantial level of goodwill through more frequent trading activities over the decades (Lardy, 2002). This paper essentially focuses the implementation of CE in China as the ecosystem of materials that is believed to have significantly far-reaching implications to the future development of the supply chains in the Chinse economy. ...
Article
Since the Circular Economy Promotion Law of People’s Republic of China came into force in 2009, the concept of circular economy (CE) has gained a rising attention from governments and researchers. Policy makers, companies and researchers have started to establish different sets of principles and strategies for adoption. This paper introduces the CE within China’s economy background and reviews the drivers to adopt and facilitate its CE. It integrates several current CE practices in China and conducts an analysis on the recycling rate from the government official reports that show China has made some progress in recycling industrial tangible waste and major renewable resources such as iron and steel with remaining challenges and barriers. Further analysis suggests that China requires a more systematic approach to promote CE by individuals, organizations and the nation.
... China had to accept a broad range of regulatory changes to harmonize with international standards, and accession required promises of major opening to foreign companies in many sectors. Nonetheless, China's leadership thought WTO membership was crucial since it would lock in the reforms enacted since 1978 and give China greatly expanded access to international markets (Lardy, 2002). And, as it turned out, many of the promises were not kept, so China got the advantages of membership without paying all of the costs. ...
Book
Cambridge Core - Latin American Government, Politics and Policy - Dependency in the Twenty-First Century? - by Barbara Stallings
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This paper is the first to investigate the changes in criteria for market access under China's Qualified Foreign Institutional Investor (QFII) Programmes. By combining insights on institutional change and Chinese elite politics, it demonstrates that the evolution of access criteria can be explained by interdependent bargaining between Chinese party leaders, administrative authorities and corporate interests. The 2008 global financial crisis triggered fundamental shifts in resource interdependencies that altered the bargaining dynamics between these agents. The changes in internal and external conditions are decisive for understanding how the QFII programmes evolved. The analysis draws on an original data-set coupling 91 multi-stakeholder interviews, database analysis and internal government records. The findings show that institutional change in China's cross-border investment programmes is a negotiated economic outcome bridging interdependent state and market agents. These results have important implications for the study of globalisation and institutional change in non-Western contexts. They challenge existing narratives of an all-pervasive Chinese party-state that is resistant to change.
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The widely held view ascribes China’s remarkable economic growth in the 1990s to the communist regime’s gradualist reform policies and illiberal development strategy. This essay challenges that view. The author argues that economic growth became the most important source of legitimacy of the Chinese communist regime in the aftermath of the Global 1989. The Chinese regime adopted a radical efficiency-biased economic reform in the 1990s. Such radical reform regardless of social justice gave rise to rampant corruption and a huge income gap between the rich and poor. Meanwhile, misinterpreting the East Asian growth model, the Chinese regime, eager to drive the economy to grow faster, carried out an externally oriented development strategy that combined export promotion with import liberalization at the expense of autonomous national development. By the late 1990s, both the economic reform and industrial development were stuck in a quagmire, rendering the economic growth difficult to sustain. Its deep concern for legitimacy thus led the Chinese regime to accept harsh terms on economic liberalization in order to secure WTO membership, in the hope of increasing export and FDI on a larger scale to reverse the declining economic momentum.
Chapter
China’s economic transformation demonstrates that the paths of transition and development are broader and more varied than generally predicted by economic research relating to other countries. Research focused on China’s experience contributes to the scope and richness of the economics literature in notable ways. The China literature illustrates and makes more vivid established insights and paradigms, including those of Nobel laureates whose work relates to development and institutions. Furthermore, China is inspiring new insights and understanding regarding the central role of institutions. This paper, in particular, focuses its review on the literature that expands our understanding of the process of induced institutional change.
Chapter
Since 1980, China’s economy has grown at the rate of 9 percent a year and its foreign trade has expanded at the pace of almost 15 percent a year. Its share of world trade rose from less than 1 percent to about 5 percent in 2002.1 The emergence of China as a great economic and trade power is bringing far-reaching changes in the world economy and in international economic relations. China now holds a large share of the world market in traditional industries (accounting for about one-third of world exports in leather and shoes and one-fifth in clothing), but is also rapidly enlarging its shares in electrical and electronic exports, the fastest growing segments of world trade. In 2002 China recorded one-fifth of world exports of consumer electronics and of domestic appliances. For East Asian countries, China has become a major partner, often their first partner in the region. In 2003, China was Japan’s second-largest export market, behind the US, and its first-largest supplier. For South Korea, China was the largest export market and its second-largest supplier behind the US. In 2003 and 2004, the accelerated increase of China’s import demand (+40 percent and 37 percent respectively) has been the engine of economic growth in East Asia.
Article
The EU–China Bilateral Investment Treaty (BIT) is a genuine landmark in bilateral trade and investment relations and the evolution of the EU’s Common Commercial Policy. However, negotiating a BIT with China presents distinct challenges, primarily due to the radical differences that exist between the EU and China’s legal frameworks, their differing values and levels of development, and the structural features of their economic models. The EU’s evolving BIT model is still in the very early stages of its development, and China remains generally cautious on consent to international arbitration tribunals. This paper makes a novel contribution to the literature on EU–China investment law in several respects. Firstly, it provides an up-to-date account of how the negotiations for an EU–China BIT have been shaped by competitive externalities, i.e. current developments in the negotiation of Free Trade Agreements or BITs between the EU or China and third parties, or equally those among third-parties excluding both the EU and People’s Republic of China. It thus provides a broader context for understanding the pursuit of an EU–China BIT, framing the initiative in terms of mutual regard for external competitive pressures which threaten both parties with the prospect of disadvantage vis-à-vis key competitors in the others’ market for investment. Secondly, it traces the motivations for a BIT between the EU and China by examining recent bilateral investment and trade disputes, illustrating the potential that a BIT might hold to mitigate future tensions. Thirdly, it frames the proposed BIT in terms of the EU broader trade policy and trade diplomacy goals on China.
Chapter
China is rising. There seems to be little disagreement about this. With economic growth rates hovering around 10 percent per year for the past 30 years, an enormous demand for global resources, and an increasingly assertive foreign policy, China seems poised to become a major power in the twenty-first century. It is now common to hear politicians, pundits, and academics proclaiming that China will eventually become a peer rival to the United States. But how do we make sense of China’s rise—what does it really mean for China and for the world? Will China emerge within the existing global order, will it play by the existing rules and succeed? Or will China lead an “irresistible shift of global power to the east?” (Mahbubani 2008a) Does China’s rise reflect an impending “great transformation” that will lead to the articulation of alternative development and global governance models?
Chapter
Before Deng Xiaoping’s open-door policy and economic reforms in 1978, China was an insignificant player in world economy. Its foreign trade volume in 1977 was less than US$15 billion, the 30th largest trading state with a share of 0.6 percent in world trade. Due to economic autarky, this world trade share was even considerably less than in 1927–1929, when China accounted for more than 2 percent of world trade.1 Yet, in just over 35 years China’s role in world economy has completely changed. It is now the largest exporter and the second largest importer in world trade. As a fastest growing major economy, China’s GDP is the second largest in the world, surpassing that of Japan in 2010 and on the way to overtake the United States in the next 15 to 20 years.
Chapter
Global business interaction makes countries important to each other because of anticipated benefits. Some countries, though, might become more important than others as a result of their business interaction with the global community. Paraphrasing what was attributed to Japan at the beginning of the twentieth century (Whelpley, 1913, pp. 247–248), “There was a time when all the countries around the world hoped to find their chief field of commercial enterprise in the ‘west’; but today, at the beginning of the twenty-first century, the mind of all the countries around the world is all toward China as the commercial hope of their future.” This was not so before 1979 when the Chinese economy was still dominated by central planning.
Article
The US trade deficit with China has existed for a long time, and its dollar value has been on the rise recently. It is widely believed that the main culprit is the manipulated value of Renminbi relative to the US dollar. Towards that end, this article re-examines the spot exchange rate and bilateral trade nexus using the Fourier approximation and a variant of the well-known gravity model during the sample period 1993: q1–2014: q1. Although China’s exports to the US Granger cause the exchange rate in a co-integrated space, the findings of a vector error correction model indicate that there is not a strong relation between the two. Indeed, within the aforementioned sample, only 15.52 per cent of changes in China’s exports to the USA are attributable to changes in the spot exchange rate. This is noticeably much smaller than impacts of the other variables utilized in the estimated gravity model. As such, the palpable trade imbalance between the USA and China cannot be single-handedly blamed on the spot exchange rate manipulations.
Chapter
Foreign direct investment (FDI) is commonly seen by economists and policy makers as a premier agent, not only of globalization, but also of economic growth and development. In fact, in light of the Asian and South American financial crises, in which portfolio flows proved to be flighty and unreliable, FDI is now treated more than ever as the capital flow of choice. FDI has thus become one of the most sought-after commodities in the global economy, the object of enormous investments of time and resources by policy makers who want to attract it, and the subject of an enormous amount of research and debate concerning its nature and impact.
Chapter
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Globalization has integrated the product and financial markets of economies around the world through the driving forces of trade and capital flows across borders. One of the main debates on globalization is the effect of growing economic integration on income distribution. The antiglobalization movement argues that globalization is widening the gap between the haves and the have-nots (Mazur 2000). The pro-globalization position claims that the current wave of globalization since the 1980s has actually promoted economic equality and reduced poverty (Dollar and Kraay 2002).
Chapter
In 1979 China instituted its ‘open door’ policy and has gradually opened its economy to the outside world in a carefully managed and phased approach. Since that time the economy has increased in size fivefold and per capita income has risen fourfold (The Economist, 2001).1
Chapter
Since embarking on a programme of economic reform in late 1978, China has moved, albeit in an incremental fashion with periodic stops and starts, towards market capitalism. In 1993 the Chinese Communist Party (CCP) deleted the description of China as a planned economy under public ownership from the state constitution, proclaiming it a ‘socialist market economy’. Further amendments legitimated the ownership rights of private entrepreneurs (1999) and the sanctity of private property (2004). In a related development, entrepreneurs were granted the right to join the CCP in 2002. While China undoubtedly constitutes an example of economic transformation from the Soviet-style planning system, its experience must be distinguished from that of its former socialist brethren. First, most obviously, China was one of the few remaining examples, at least ostensibly, of a Marxist-Leninist state, governed by a Communist Party. Secondly, China was still, despite a record of remarkable growth, a developing economy, setting it apart from the states of Eastern Europe and the more industrialized states of the former Soviet Union.
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China’s ongoing ambition of global leadership includes its growing investments outside China. Although China has the reputation for being the world’s factory, manufacturing up to 70 percent of electronics, toys, textiles, clothing, and footwear (Lardy, 2002; Gu, 2006; Harney, 2008), a growing number of Chinese have set up businesses outside the country, most recently in Europe. Today, China not only runs the world’s workshop but operates workshops around the world, a phenomenon resulting from increased Chinese outward foreign direct investment (OFDI), which has doubled to US$52 billion between 2007 and 2008 (Roberts & Balfour, 2009, p. 42). Key players in China’s global push are Chinese state-owned enterprises (SOEs) and Chinese multinational enterprises (MNEs). Their goal is to open new markets, access natural resources, and buy Western brands overseas.
Chapter
Economic theory suggests that the capital dynamics of the international economy of the early 21st century should never have happened. That theory says that capital should flow from rich countries to poor ones in search of higher returns. Yet, strikingly, from the late 1990s collectively rich countries became net importers of capital and developing countries became net providers.1 This phenomenon can be seen in a radical change in the distribution of current account deficits and surpluses. In 1996, the collective current account surpluses of the industrial economies stood at $41.5 billion; by 2000 these economies were running a collective deficit of $331 billion and by 2004 of $400.3 billion. By contrast, the collective current account deficit of developing-country economies stood at $90.4 billion in 1996; by 2000 these economies were running collective surpluses of $131.2 billion in 2000 and $326.4 billion in 2004.2
Chapter
The early years of the twenty-first century have ushered in a range of far-reaching milestones for both the Chinese and world economies. First, China’s process of (re)integration with the global economy (Lardy, 2002) culminated in the accession to the World Trade Organization (WTO) in 2001. Combined with sustained economic reform and restructuring efforts in the domestic political economy sphere, China’s race to the market (Story, 2003) has induced a gradual, yet irreversible, convergence towards internationally accepted norms and standards of economic interaction and increasingly market-conforming business strategies. A second critical development, meanwhile, has been China’s emergence as a source of foreign direct investment (FDI), alongside its continuing attractiveness as a leading destination of global FDI (Cai, 1999; Deng, 2004; Wu & Chen, 2001). Spearheading the still comparatively small but rapidly expanding outward FDI wave are increasingly assertive Chinese enterprises with global ambitions.
Chapter
As a political and economic entity, the People’s Republic of China (hereinafter China) is regarded as the oldest country in the world. Since the period of the Qin Dynasty (221–204 BC) and the First Emperor, popularly known as Qin Shi Huangdi, China has been a united and prosperous empire. History credits Emperor Qin Shi Huangdi for initiating a sophisticated government structure that outlasted him for two millennia. For the major part of this period, China was a prosperous and well-managed empire. It was economically well-off, had robust domestic and international trade and was highly advanced in knowledge and technology. The Great Wall of China, legendarily 2,200 years old and 4,300-miles long, not only made a confident physical statement but also symbolized China’s belief in itself as an advanced and refined civilization, eager to make an unambiguous distinction between itself and the “barbarians” beyond the border (Lovell, 2006). By the tenth century it had a professional bureaucracy, which administered cities and provinces with impressive proficiency. Its centralized political system was supported by intensive and well-organized agriculture, which brought prosperity to the society (Maddison, 1998). However, China lacked the entrepreneurial prowess and military muscle that the European countries and Japan succeeded in cultivating. A time came when its economic affluence went into a sharp decline and it was reduced to dismal poverty. In 1978, the economy began to make its now-celebrated U-turn
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Executive Summary. Despite the large volume of foreign direct investments in Chinese commercial real estate markets, there has been little academic research done to analyze and characterize the risk structure of Chinese commercial properties. This paper examines the risk characteristics of direct property investments in Chinese first-tier cities. It applies macro variable models to analyze the risk structure of office properties in Beijing, Shanghai, and Guangzhou. It then tests a selection of instruments that could be used by investors to hedge the risk of investing in these three markets. It concludes with recommendations that could help investors deal with the risk of direct investments in China's property markets.
Thesis
La culture et les méthodes chinoises restent encore aujourd’hui bien méconnues pour le monde non asiatique. Or, le système bancaire chinois est un mélange de culture et de traditions millénaires et de méthodes et concepts modernes, importés de l’étranger. Cet amalgame particulier est donc difficile à caractériser. L’objectif présent est de déterminer si le système bancaire chinois actuel, cœur du système financier du pays, peut être considéré comme le socle d’un modèle de capitalisme -selon la définition de la théorie de la régulation- aujourd’hui, ou s’il le sera demain à travers une analyse de son histoire, de sa structure et de l’évolution des réformes, jusqu’à l’implémentation de Bâle III et les réformes de Wenzhou. De nombreux experts s’accordent à penser que le système bancaire nécessite des réformes profondes, dont notamment le retrait de l’Etat et une plus grande ouverture. Ce type de réforme bouleverserait cependant les rapports institutionnels. L’Etat devrait laisser une place beaucoup plus importante au marché et le socle que constitue le système bancaire actuel serait alors méconnaissable. Si les dernières réformes chinoises montrent une réelle volonté politique de libéralisation du secteur financier chinois, celles-ci soulignent également les obstacles auxquels sont confrontés les acteurs du système. Les méthodes d’implémentation suggèrent non pas la caractéristique d’un modèle ou d’une culture mais bien une volonté, de permettre à l’Etat de rester l’institution dominante.
Chapter
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Chapter
Studying leadership, one begins to see the various theories, approaches, and styles. However, with the vast research on the topic of leadership, institutions and systems are characterized by poor and ineffective leadership and leaders. This has and will continue to boggle the business professionals. Because of this, business professionals and scholars continue to as to ask the questions, “why, how, and what?” Why is it that regardless of the current reseearch and knowledge that we have on leadership, we continue to have discussions on the topic of ineffective and innovative leadership? How as business scholars and professionals do we move into a more effective style of leadership? What do we embrace, to have effective and responsible leaders and leadership? This chapter discusses the why, how, and what that we need to let go to be liberated.
Article
We study the mechanisms through which macroeconomic level shocks, namely macro easing and industry curbing policies from the government and housing preference shock from the households, exert their impact on the real estate and manufacturer sectors in China. Our analysis shows that whilst the macro easing monetary policy stimulates overall investment in the two sectors, it also causes the crowding out effect, inducing the capital flow disproportionally to the real estate industry. In this sense, it resembles the positive housing preference shock by contributing to the imbalance between housing and real industry. Meanwhile, policies aimed at curbing real estate boom have a leakage effect, which can offset the crowding out effect from the housing preference and easing monetary policy shocks. Both crowding out and leakage effects stem from the heterogeneous characteristics of durable and non-durable goods produced by real estate and manufacture sectors, respectively, instead of from heterogeneous borrowing constraints. Our results add to the understanding of transmission mechanisms of different policies on production sectors and provide insights for policy makers on how to effectively apply policies to affect the economy in a macro-prudential way.
Article
This research presents a full picture of the rationale behind China's infrastructure investment under the Belt and Road Initiative (BRI), which was formally initiated in 2013. In this paper, we argue that the main reason for China to conduct infrastructure investment under BRI is to strategically respond to the emergence of the “New Normal,” which pushes the country to sustain economic growth through further structural transformation. We come up with three relevant factors for why infrastructure projects under BRI could be conducive to structural transformation in China's economy, as it (1) provides a much better alternative to the existing poor logistic conditions and can create accessibility among regions, (2) enables the smooth flow of factor endowments of production that significantly reduce production costs, and (3) indirectly strengthens the influence of the debt provider's home currency. This paper also provides three theoretical pillars: the comparative advantage following (CAF) and defying (CAD) development strategies, the late development theory with antineoliberalism characteristics, and the new international division of labor, from which these three factors might potentially explain how BRI could enhance the structural transformation of this second‐largest economy in the world.
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China’s unprecedented economic rise has generated great interest, not least because it seems to have occurred by studiously ignoring the ‘lessons’ of the Western experience and the advice of hitherto influential external agencies. On the contrary, the ‘China model’ owes more to an East Asian developmental model in which the state has played a large role. As a consequence, we argue that China is proving to be a more attractive role model for other rising economies such as Vietnam, which is also a notionally ‘communist’ state. This paper considers the Chinese experience and its possible implications for Vietnam. The key questions in this context are how China managed its integration with the global capitalist economy and whether other states such as Vietnam will also be able to manage their development according to distinctive national priorities, rather than the sort of international ‘best practice’ that has been urged upon its leaders by external actors. We argue that not only is Vietnam learning from China, but much of the Eurocentric literature in this area overlooks the importance of contingency and path dependence.
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This chapter proposes a theoretical outline of the economic state for capturing a major institutional transformation caused by globalization. It suggests to analyze the economic state with six features, which include the state’s increasing economic concern, the state’s extending authority into economic domains, the frequent involvement of state coercion in economic affairs, the shift of sources of state legitimacy to economic performance, the state’s declining supply of public goods, and the prevalence of power–money exchange relationships in governmental ethics. It then examines the economic state of the People’s Republic of China and the United States of America, respectively, from these angles, and places them in a comparative perspective. Such comparative case studies help to, first, demonstrate how the economic state arises across a wide range of countries in very different economic, political, and social-cultural characters; second, a variety of the economic state exists in the trend of the rise of the economic state; and third, democracy, as being undermined by the rise of the economic state, is still vital to determine different types of the economic state.
Article
In this paper, we develop a novel trade‐accounting framework that is based on a multi‐country, multi‐industry model of trade. The framework links observed changes in wages, sectoral employment shares, total labor force, and bilateral trade costs to changes in bilateral trade values at the sector level. In our application, we quantify the changes in trade patterns from 1995 to 2010 among 15 advanced and emerging market economies attributable to structural change in China, focusing on three manifestations of trade creation and destruction: China’s replacement of manufactured final goods exports to advanced economies at the expense of other economies; an expansion of China’s imports of manufactured final goods and commodities; and an expansion of China’s imports of parts and components that are then processed and exported as manufactured final goods to the advanced economies. Our main findings are: (a) scale effects have more than compensated for the loss of competitiveness due to higher wages in China; (b) China’s wage growth has been an economically more significant determinant of trade creation and destruction than its reallocation of labor across sectors, and (c) structural change in China has shifted other countries toward more commodity‐intensive production.
Article
This paper examines the trajectory of Chinese leadership in globally oriented organizations of a self-selective informal nature. In doing so, it shifts attention away from the role of China in established formal institutions, above all the United Nations. The focus instead is on the increasingly robust activity centered post the 2008 global financial crisis on the “hub” forum the G20 and an array of “parallel” non-western institutions including the BRICS and the Belt and Road Initiative. The key theme of this paper is that China has adopted a dualistic strategy that allows it act as both a key insider and outsider in the global system. From an international perspective, such an approach allows China to gain status as a rising power while not compromising its sense of solidarity with the rest of the non-west. Domestically, the approach builds on lessons gained from the earlier debate about entry into the World Trade Organization which marked a sharp divide between liberals and nationalists. A dualistic approach that allowed China to be a core member of the hub G20 and a driver of autonomous initiatives defused the possibility of such a contentious internal debate.
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Rozwój Chińskiej Republiki Ludowej (ChRL) oraz coraz silniejsze jej oddziaływanie na kształt gospodarki światowej stanowią ewenement w historii ekonomicznej świata. Jednocześnie przykład Chin pokazuje, iż wprowadzanie nietypowych rozwiązań systemowych może poprawnie funkcjonować. Rok 1978 dla Kraju Środka okazał się przełomowym. Wówczas rozpoczął się wielki spektakl odrodzenia i fenomenalnego rozwoju gospodarczego państwa, które przed wprowadzeniem procesów transformacyjnych było zaliczane do grupy krajów słabo rozwiniętych, z wyraźnymi przejawami stagnacji, jeżeli nie regresu. Chińską drogę ku modernizacji oglądamy z zapartym tchem od prawie czterech dekad. Wyrwanie się z „zaklętego koła ubóstwa”, przyspieszona industrializacja, modernizacja wsi, urbanizacja i wkroczenie z impetem w system gospodarki światowej pozwoliło zdobyć Chinom drugą lokatę w światowym rankingu PKB oraz objąć pozycję lidera w wielu ważnych sferach gospodarki globalnej.
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A state-directed economy can be defined as a model whereby the state is instrumental in guiding economic development, based on the rule of the market. This chapter suggests that the contemporary state-directed economic model has been developed into a complex and highly institutionalised economic system in which the state is deeply embedded in the market. This chapter then elucidates the specific approaches in which the state guides the development of its economy under a state-directed economic system. It argues that the state simultaneously fulfils a triple role, namely as a planner, a competitor, and a regulator of the market. Finally, the chapter traces the contemporary history of the Chinese economy, in which economic reforms central to China’s state sector have constantly been undertaken, and thereby presents a picture of how deep integration between the state and the market has been gradually achieved.
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This chapter focuses on two historic moments through the Foucauldian framework of governmentality: the recent financial crises and the collapse of the Bretton Woods system in 1971. In so doing, it argues that the core policies adopted since 2008 are marked more by continuance than change. Neo-liberalism still dominates, and the further retrenchment of the state and marketization of the social sphere is readily apparent. The chapter argues that the 1971 crisis heralded enormous changes in the modes of governmentality in the highly industrialized countries, both in terms of governing rationalities (an intensification in the marketization of the social sphere) and the reconstitution of subjectivities. At the regulatory level, rather than adopting the interventionary measures of previous decades a much more hands-off approach was introduced that relied upon the power of the market rather than the state per se. These changes coincided with the shift towards financialization and the rise of global production chains as a result of the restructuring of national economies. However, the second major economic crisis (actualized as a series of crises) in the core industrialized countries has not led to another innovatory restructuring in the actual economy. Instead, we have witnessed the continuing retrenchment of the state and further marketization of the social sphere.
Article
As multilateral trade negotiations have lapsed into stalemate, regional economic integration arrangements like free trade agreements (FTAs) are gaining growing prominence. We propose a theory on how a developing country's GVC linkages with partners are affected by partners’ position on the GVCs and the characteristics of the FTAs, and use a large matched data of China's trading partners to validate our hypothesis. We find that there are stronger value chain linkages between China and higher‐income economies, and the degree of mutual value chain dependence rises in line with the partner's development level. The GVC promoting effect of FTA partnership is more pronounced for China's value chain linkages with its higher‐income partners. The results survive various robustness checks and are likely to be informative for other developing countries.
Book
What can we do in this period of historic, global turbulence? Mainstream narratives have no plausible account of how to stop exacerbating the multiple, overlapping challenges; much less begin to address them meaningfully. The only thing everyone agrees is innovation will be needed. But what is innovation? Usually, it is understood as new technologies that will 'solve' specific 'problems' - and, it is hoped, return life to a 'business as usual' of progress in individual freedom and wealth. But innovation is a thoroughly social process with profound implications for the arrangement of power in a society, hence shaping the emergence of new social systems. Exploring evidence from the key arenas of low-carbon innovation, including in the pivotal location of a rising China, this book describes the global systemic crisis of a neoliberal world order and the embryonic emergence of an alternative global power regime of a 'liberalism 2.0'. This augurs both a web 2.0-based revitalization of the classical liberalism of the nineteenth century and new Dickensian inequalities and injustices. Against hopes that the present is a 'revolutionary' moment, therefore, political engagement with this emerging power regime is thus presented as the most productive strategy for a progressive twenty-first century politics.
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