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

The renminbi’s prospects as a global reserve currency

Eswar Prasad, Lei (Sandy) Ye 16 February 2012

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Popular discussions about the prospects of China’s currency – the renminbi – range from the view that it is on the threshold of becoming the dominant global reserve currency to the concern that rapid capital-account opening poses serious risks for China.

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Topics:  International finance International trade

Tags:  China, globalisation, renminbi, exchange-rate policy

Does the renminbi matter? Evidence from China’s disaggregated processed exports

Willem Thorbecke 29 January 2012

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China’s surging exports and its exchange rate have elicited consternation from economists, politicians, and pundits. How would a stronger renminbi affect China’s exports and its trade surplus? China’s entire surplus is in a customs regime called processing trade. Imports for processing are intermediate inputs that are imported duty-free to produce final goods for re-export.

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Topics:  Exchange rates International trade

Tags:  China, exports, exchange-rate policy

Rogue aid? On the importance of political institutions and natural resources for China’s allocation of foreign aid

Axel Dreher, Andreas Fuchs 27 January 2012

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In an obvious reference to China, US Secretary of State Hillary Clinton recently warned during her visit to Burma to “[b]e wary of donors who are more interested in extracting your resources than in building your capacity” (quoted in FT 2011).  China’s allocation of foreign aid not only receives widespread attention, but is also a major source of concern for Western policymakers. Recent examples include China’s massive support for Belarus – ‘Europe’s last dictatorship’ – and the recurrent provision of aid to North Korea, China’s Communist neighbour.

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Topics:  Development Politics and economics

Tags:  China, natural resources, development aid, rogue aid

Are China and India converging?

Ejaz Ghani 23 January 2012

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Both China and India have attracted global attention for rapid growth, but their growth patterns are very different (Rajan 2006, Pack 2008, Bosworth and Maertens 2010). China took the conventional route of manufacturing-led growth and is recognised as a global leader in manufactured exports. India followed the unconventional route of service-led growth and has acquired a global reputation for service exports. Are their growth patterns converging? Is China catching up in services? Is India catching up in manufacturing? Or has hysteresis kept their growth patterns different?

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Topics:  Development International trade

Tags:  China, India, manufacturing, services

Global value chains are not all born identical: Policymakers beware

Carlo Altomonte, Filippo di Mauro, Gianmarco I.P. Ottaviano, Vincent Vicard, Armando Rungi 04 January 2012

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Global value chains are increasingly important in international trade. The breakup of goods and services production between different companies often operating in different parts of the world (creating a ‘global’ value chain) can be seen all around us. (Take, for instance, the omnipresent iPhone from Apple; see Xing (2011) on this site).

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Topics:  Global crisis International trade

Tags:  US, China, exchange-rate policy, global value chains

The contribution of Chinese FDI to Africa’s pre-crisis growth surge

John Whalley, Aaron Weisbrod 21 December 2011

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In the three years before the 2008 financial crisis, GDP growth in sub-Saharan Africa (averaged over individual economies) was around 6%, 2 percentage points above the mean growth in the preceding ten years. This period also coincided with significant Chinese foreign direct investment (FDI) flows into these countries, accounting for as much as 10% of total inward FDI for some countries. In our research (Weisbrod and Whalley 2011) we use growth-accounting methods to assess what portion of this elevated growth can be attributed to Chinese inward FDI.

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Topics:  Development

Tags:  growth, China, Africa, FDI

China’s dominance hypothesis and the emergence of a tripolar global currency system

Marcel Fratzscher, Arnaud Mehl 15 December 2011

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The 2007–08 global financial crisis has brought the reform of the international monetary system back to the forefront of the international policy debate. Some G20 leaders, notably from emerging economies, are questioning the configuration of the current system based on a single currency, the US dollar, as global reference currency, and the euro, as a more regional currency.

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Topics:  International finance Monetary policy

Tags:  China, exchange-rate policy

The renminbi and poor-country growth

Helmut Reisen 05 December 2011

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China’s current-account surplus over the past two decades can be explained in large part by its savings rate. Song et al (2010) have stressed the role of rising corporate savings due to reallocation within the manufacturing sector from low- to high-productivity companies. Wei (2010), meanwhile, explains China’s rising household savings with gender imbalances. Still, large appreciations do impact the current account and – in developing countries – do depress growth (Keppler et al 2011), as evidenced by data over the past 50 years.

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Topics:  Development International trade

Tags:  China, exchange-rate policy, poor countries

The price of children and fertility responses: Evidence from the Israeli Kibbutz

Avraham Ebenstein, Moshe Hazan, Avi Simhon 02 December 2011

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To what extent does economics affect fertility decisions? Ever since Gary Becker’s seminal work on the economics of the family in the 1960s (Becker 1960), economists have argued that money weighs heavily on the minds of would-be parents, and policymakers throughout the world have been heavily influenced by such research.

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Topics:  Frontiers of economic research Health economics

Tags:  France, China, fertility, demographics, Israel, population

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