Deep integration in free trade agreements in China and India

Ganeshan Wignaraja 04 July 2012

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Since the 2000s, creeping protectionism and the stalled WTO Doha Round trade talks have prompted China and India to pursue a variety of bilateral and regional free trade agreements (FTAs). Before 2000, the sole FTA involving China and India was the Asia-Pacific Trade Agreement. By February 2012, the Asian giants were among the region’s leaders in trade agreements with 12 FTAs in effect in China and 13 in India. These figures are likely to rise as both giants are presently negotiating increasingly ambitious FTAs.

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Topics:  International trade

Tags:  China, India, free trade agreements

A region-wide free trade agreement in Asia

Pradumna B. Rana 25 June 2012

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The Trilateral Summit last month announced that negotiations would begin later this year on a China/Japan/South Korea FTA or the C/J/K FTA (Joint Declaration 2012). This suggests that two pathways to a region-wide FTA are starting to evolve in Asia. One is the ASEAN-led East Asian FTA and the Comprehensive Economic Partnership for East Asia (CEPEA) comprising the ASEAN+6 including India. The alternative pathway is the US-led Trans-Pacific Partnership, which is already under negotiation.

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Topics:  International trade

Tags:  China, Japan, free trade agreement, ASEAN, South Korea

International rules for capital controls

John Williamson, Olivier Jeanne, Arvind Subramanian 11 June 2012

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Although economists generally agree that countries can derive substantial gains from international economic integration, the extent to which they should open themselves to international capital flows remains a controversial issue. There is still, 20 years after the rise of emerging markets finance, a wide diversity of approaches to capital account policies. Some emerging market economies maintain a completely open capital account. Others, most notably Brazil, have experimented more actively with market-based prudential capital controls since the crisis.

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Topics:  Global governance International trade

Tags:  China, capital controls, Brazil

Do ‘animal spirits’ matter to firms’ internationalisation?

Yasuyuki Todo 07 June 2012

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The internationalisation of firms’ production activities is having a massive impact on the global economy – everything from facilitating the rapid industrialisation and income growth in China and other emerging economies to the hollowing out of G7 manufacturing sectors. This growth and de-industrialisation is, in turn, blamed for booming commodity prices and rising wage inequality. Plainly, understanding the determinants of firms’ internationalisation is critical to comprehending today’s globalisation.

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Topics:  International trade

Tags:  China, Japan, foreign direct investment, exports, imports, animal spirits

Germany should follow in the footsteps of China

Kamil Yilmaz 19 May 2012

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After the bankruptcy of Lehman Brothers in September 2008, leading governments around the world announced fiscal packages to provide stimulus to their respected economies. The Chinese government was one of the first. As early as November 2008, it announced a stimulus package that was planned to go into effect immediately in early 2009. The Chinese government also stood out in terms of the size of the package. Its stimulus package contained an additional fiscal spending of $586 billion over a two-year period (each year’s spending was equivalent to 6.9% of 2008 GDP).

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Topics:  Global economy Macroeconomic policy

Tags:  Germany, China, fiscal policy, business cycle

When should China start cutting its emissions?

Carlo Carraro, Emanuele Massetti 25 April 2012

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China’s economy has grown at a record-breaking pace for almost two decades. This growth was fuelled by a rapid industrial expansion and it causes an ever-growing appetite for natural resources in general and energy in particular, with worldwide implications on commodity markets and on the environment (Moran 2010). China became the world leading carbon dioxide emitter in 2006, five to nine years earlier than what was forecasted as recently as in 2004.

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Topics:  Environment

Tags:  China, climate change

China: No longer the villain

Marco Annunziata 21 April 2012

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While concerns about Spain and, to a lesser extent, Italy have again taken centre-stage, a number of experts and market participants are almost as worried and sceptical about China as they are about the Eurozone. The China bears have been predicting a crash within the next one to two years for the last several years. As China’s growth is unbalanced, there is no shortage of concerns:

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Topics:  Global economy

Tags:  global imbalances, China

Can China’s growth lower welfare in developed countries? A refutation of the Samuelson conjecture

Julian di Giovanni, Andrei Levchenko, Jing Zhang 02 April 2012

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Topics:  Global economy International trade

Tags:  China, comparative advantage

Beggar-thy-neighbours? Spillover effects of exchange rates

Aaditya Mattoo, Arvind Subramanian, Prachi Mishra 23 March 2012

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Nearly all of the empirical research on exchange rates is focused on the impact of their changes on the country experiencing or undertaking them. This is true of the older, voluminous literature on the trade consequences of exchange rates (surveyed in Goldstein and Khan 1985), as well as more recent contributions like Rodrik (2008) and Berman et al. (2012). There is less evidence quantifying the effect of exchange rate movements on the exports of competitor countries, a classic case of spillover that, in its adverse manifestation, is dubbed the “beggar-thy-neighbour” effect.

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Topics:  Exchange rates

Tags:  China, spillovers, beggar-thy-neighbour

China’s economic rebalancing is already underway

Yiping Huang 17 February 2012

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The international community, and particularly policymakers in the US, put great expectations on the contribution that China can make to a global economic recovery by rebalancing its economy through promoting consumption growth (see, for example, O’Neill 2010 on this site).

The Chinese authorities broadly accept this priority and have put in place a number of policy measures that aim to achieve it.

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Topics:  Macroeconomic policy

Tags:  China, consumption, rebalancing

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