Can China's Rust Belt Reinvent Itself?

Jonathan Kaiman
Foreign Policy
To understand this industrial Chinese city's past, begin with the smoldering crater on the south side of town, an open-pit coal mine as wide as Manhattan and deeper than the height of the Chrysler Building. Known as Haizhou, or "Sea State...

Books

06.12.12

Sustaining China’s Economic Growth After the Global Financial Crisis

Nicholas R. Lardy
The global financial crisis and ensuing economic downturn have raised many questions concerning the future of global economic growth. Prior to the financial crisis, global growth was characterized by growing imbalances, reflected primarily in large trade surpluses in China, Japan, Germany, and the oil exporting countries and rapidly growing deficits, primarily in the United States. The global crisis raises the question of whether the previous growth model of low consumption, high saving countries such as China is obsolete. Although a strong and rapid policy response beginning in the early fall of 2008 made China the first globally significant economy to come off the bottom and begin to grow more rapidly, critics charged that China's recovery was based on the old growth model, relying primarily on burgeoning investment in the short run and the expectation of a revival of expanding net exports once global recovery gained traction.This study examines China's response to the global crisis, the prospects for altering the model of economic growth that dominated the first decade of this century, and the implications for the United States and the global economy of successful Chinese rebalancing.   —Peterson Institute for International Economics

Reports

06.11.12

China Invests in Europe

Thilo Hanemann and Daniel H. Rosen
Daniel H. Rosen
Rhodium Group
Europe is experiencing the start of a structural surge in outbound direct investment in advanced economies by Chinese firms. The take-off was only recent: annual inflows tripled from 2006 to 2009, and tripled again by 2011 to $10 billion (€7.4...

Can China Escape the Low-Wage Trap

James Fallows
New York Times
The news out of China this year has been relentlessly bad. The political system was embarrassed in front of its own people by the Bo Xilai scandal and in front of the world by the Chen Guangcheng incident. The Chinese economy has slowed and its...

Arthur Kroeber: Bear in a China Shop

Arthur Kroeber
Foreign Policy
Time and again, China has defied the skeptics who claimed its unique mixed model -- an ever-more market-driven economy dominated by an authoritarian Communist Party and behemoth state-owned enterprises -- could not possibly endure. Today, those...

Books

05.21.12

China Airborne

James Fallows
More than two-thirds of the new airports under construction today are being built in China. Chinese airlines expect to triple their fleet size over the next decade and will account for the fastest-growing market for Boeing and Airbus. But the Chinese are determined to be more than customers. In 2011, China announced its Twelfth Five-Year Plan, which included the commitment to spend a quarter of a trillion dollars to jump-start its aerospace industry. Its goal is to produce the Boeings and Airbuses of the future. Toward that end, it acquired two American companies: Cirrus Aviation, maker of the world’s most popular small propeller plane, and Teledyne Continental, which produces the engines for Cirrus and other small aircraft.In China Airborne, James Fallows documents, for the first time, the extraordinary scale of this project and explains why it is a crucial test case for China’s hopes for modernization and innovation in other industries. He makes clear how it stands to catalyze the nation’s hyper-growth and hyper-urbanization, revolutionizing China in ways analogous to the building of America’s transcontinental railroad in the nineteenth century. Fallows chronicles life in the city of Xi’an, home to more than 250,000 aerospace engineers and assembly workers, and introduces us to some of the hucksters, visionaries, entrepreneurs, and dreamers who seek to benefit from China’s pursuit of aerospace supremacy. He concludes by examining what this latest demonstration of Chinese ambition means for the United States and the rest of the world—and the right ways to understand it. —Pantheon Books

Caixin Media

05.02.12

Yearning for the Yuan

London is forging ahead with plans for yuan-based financial services by developing an infrastructure and banking services that match its ambitions for the Chinese currency.On April 18, the city welcomed the first yuan-denominated bond issuance...

Reports

05.01.12

China’s Impact on World Commodity Markets

Shaun K. Roache
Luo Xiaoyuan
International Monetary Fund (IMF)
Shocks to aggregate activity in China have a significant and persistent short-run impact on the price of oil and some base metals. In contrast, shocks to apparent commodity-specific consumption (in part reflecting inventory demand) have no effect on...

Reports

05.01.12

RMB Internationalization: Onshore/Offshore Links

Samar Maziad, Joong Shik Kang
Luo Xiaoyuan
International Monetary Fund (IMF)
Among emerging market currencies, the RMB holds the most potential to become widely used internationally, due to China‘s large economic size, diversified trade structure and network, macroeconomic stability, and high growth rates - both current and...

Sinica Podcast

04.26.12

Chinese Industrial Policy and the Automotive Market

Kaiser Kuo & Jeremy Goldkorn from Sinica Podcast
Even as the Beijing Auto Show prepares to toast the Chinese market with its typical mixture of sex and tech, industry insiders have been stunned by recent news showing the market share of domestic Chinese manufacturers falling relative to their...

Caixin Media

04.24.12

China’s Tax Burden: A Mysterious Lead Sinker

(Beijing)—In much of the world, admiration and envy are common reactions to China’s consistently high GDP growth rates. But closer to home, the Chinese public’s admiration of their own economic miracle is shadowed by tax increases that...

Caixin Media

04.19.12

Strategic Reserves

(Beijing)—In an odd twist for China’s powerful banks, the biggest state-owned lenders last year started running low on the foreign currency needed for loans to enterprises investing overseas.“Some commercial banks suspended U.S. dollar loans” after...

Books

04.13.12

The End of Cheap China

Shaun Rein
Many Americans know China for manufacturing cheap products, thanks largely to the country's vast supply of low-cost workers. But China is changing, and the glut of cheap labor that has made everyday low prices possible is drying up as the Chinese people seek not to make iPhones, but to buy them. Shaun Rein, Founder of the China Market Research Group, puts China's continuing transformation from producer to large-scale consumer - a process that is farther along than most economists think - under the microscope, examining eight megatrends that are catalyzing change in China and posing threats to Americans' consumption-driven way of life. Rein takes an engaging and informative approach to examining the extraordinary changes taking place across all levels of Chinese society, talking to everyone from Chinese billionaires and senior government officials to poor migrant workers and even prostitutes. He draws on personal stories and experiences from living in China since the 1990s as well as hard economic data. Each chapter focuses on a different aspect of China's transformation, from fast-improving Chinese companies to confident, optimistic Chinese women to the role of China's government, and at the end breaks down key lessons for readers to take away.  —John Wiley & Sons, Inc.

Caixin Media

04.01.12

China’s African Challenge

Roughly 1 million Chinese nationals are working or doing business in Africa, from Egypt’s Mediterranean shore to the Cape of Good Hope.Theirs are the faces behind China’s soaring direct investment in Africa, which, according to the Ministry of...

Reports

04.01.12

Is China Slowing Down?

John H. Makin
American Enterprise Institute for Public Policy Research
With problems in the manufacturing, housing, and export sectors in China, we will likely see slower gross domestic product growth for the world’s second largest economy in 2012. China’s leadership is changing for the first time in a decade, and its...

Caixin Media

03.29.12

Give Wenzhou What It Needs

The development of China's private economy requires financial support, especially private financial support. Wenzhou is the home of the private economy. With 99.5 percent of companies falling into the category of small and micro enterprises,...

Books

03.28.12

What the U.S. Can Learn from China

Ann Lee
Mainstream media and the U.S. government regularly target China as a threat. Rather than viewing China’s power, influence, and contributions to the global economy in a negative light, Ann Lee asks: What can America learn from its competition? Why did China suffer so little from the global economic meltdown? What accounts for China’s extraordinary growth, despite one of the highest corporate tax rates in the world? How does the Chinese political system avoid partisan rancor but achieve genuine public accountability? From education to governance to foreign aid, Lee details the policies and practices that have made China a global power and then isolates the ways the United States can use China’s enduring principles to foster much-needed change at home.This is no whitewash. Lee is fully aware of China’s shortcomings, particularly in the area of human rights. She has relatives who suffered during the Cultural Revolution. But by overemphasizing our differences with China, the United States stands to miss a vital opportunity. Filled with sharp insights and thorough research, What the U.S. Can Learn from China is Lee’s rallying cry for a new approach at a time when learning from one another is the key to surviving and thriving.  —Berrett-Koehler

Reports

02.20.12

China’s Banking System: Issues for Congress

Michael F. Martin
Peony Lui
Congressional Research Service
China’s banking system has been gradually transformed from a centralized, government-owned, and government-controlled provider of loans into an increasingly competitive market in which different types of banks, including several U.S. banks, strive...

Sinica Podcast

01.13.12

Year-End Roundup

Kaiser Kuo, Jeremy Goldkorn & more from Sinica Podcast
It was the year of the housing market (up then down), Ai Weiwei’s imprisonment, Wukan, the Wenzhou train crash, air pollution, gutter oil, tainted milk, clenbuterol, China bulls and bears, government transparency, the soaring price of Maotai, Guo...

Reports

01.06.12

Macroeconomic Policy to the Forefront: The Changing of the Guard

Barry Naughton
He Jianan
China Leadership Monitor
Worries continue to swirl around the Chinese and global economies, and China’s growth is slowing at the end of 2011. However, the news from China in the third quarter of 2011 was basically positive: inflationary pressures eased while growth slowed...

Environment

01.01.12

China’s Rising Consumer Class Sparks Climate Change Fears

Craig Simons
TUOJIA VILLAGE, China—When you think about China’s growing greenhouse gas emissions, you probably don’t think of people like Zhang Chao or his father Zhang Dejun. Zhang Chao, a thirty-five-year-old middle school teacher living in small city in...

Sinica Podcast

12.02.11

The Bears Are Back in Town

Kaiser Kuo & Arthur R. Kroeber from Sinica Podcast
Falling housing prices, soaring inflation, and an export market peering over the brink of what seems a cataclysmic abyss. If you’ve been following the economic news lately, you can be forgiven for being overwhelmed by the chorus of bearish voices...

Reports

11.16.11

Telecoms and the Huawei Conundrum

Claude Barfield
American Enterprise Institute for Public Policy Research
The Chinese company Huawei has emerged as the second-largest telecommunications equipment company in the world. It operates in 140 countries around the globe, providing equipment, software, and services to forty-five of the world’s fifty largest...

The Real Deng

Fang Lizhi from New York Review of Books
When a scientific experiment uncovers a new phenomenon, a scientist is pleased. When an experiment fails to reveal something that the scientist originally expected, that, too, counts as a result worth analyzing. A sense of the “nonappearance of the...

Reports

11.10.11

Taiwan and East Asian Regionalism

Claude Barfield
American Enterprise Institute for Public Policy Research
With a population of only 23 million, Taiwan boasts a gross domestic product of $822 billion, which ranks 19th among the world’s economies. It is the fourth largest economy in Asia. Real GDP per capita increased by roughly 130 percent from 1995 when...

Making It Big in China

Jonathan Mirsky from New York Review of Books
Jianying Zha describes China as “way too big a cow for anyone to tackle in full.” Therefore, Ms. Zha says, she omits “the rural life, the small-town stories, the migrants working in huge manufacturing plants…continued poverty in parts of interior...

Reports

11.03.11

Foreign Direct Investment, Corruption and Democracy

Aparna Mathur, Kartikeya Singh
American Enterprise Institute for Public Policy Research
How do factors such as corruption perception and the level of democracy influence foreign direct investment to developing economies? The authors of this paper suggest that less corrupt countries and less democratic countries receive more foreign...

Reports

11.01.11

Internationalizing the Renminbi and China’s Financial Development Model

Robert N. McCauley
He Jianan
Council on Foreign Relations
Internationalization was a spontaneous outcome of the marketplace for the rest of the world’s major currencies, but China is breaking with history by making it official policy to steer the renminbi on a path toward reserve currency status. However,...

Reports

11.01.11

Historical Precedents for Internationalization of the RMB

Jeffrey Frankel
He Jianan
Council on Foreign Relations
The twentieth century saw the rise of the US dollar, the German mark, and the Japanese yen as international currencies. Now the Chinese renminbi is on a similar course toward reserve currency status, but its path is deviating from those of its...

Reports

11.01.11

The Future of International Liquidity and the Role of China

Alan M. Taylor
He Jianan
Council on Foreign Relations
Financial crises in the 1930s and 1970s showed the world that economic instability results when demand for international liquidity allows a small number of countries to run up massive debts in their own currencies. Named for the economist who first...

Reports

11.01.11

The Internationalization of the RMB: Opportunities and Pitfalls

Tatatoshi Ito
He Jianan
Council on Foreign Relations
China is making swift strides toward internationalizing its currency, the renminbi, but it must be careful when sequencing these changes. Without the proper reforms, wide-open Chinese financial markets would be vulnerable to massive flows of foreign...

Reports

11.01.11

What Drives CNH Market Equilibrium?

Peter Garber
He Jianan
Council on Foreign Relations
The recent rapid growth of the offshore renminbi market presents a puzzle for analysts of China's development strategy. By allowing renminbi to flow offshore uncontrolled before loosening government controls over internal financial markets,...

Reports

11.01.11

Catalyzing Social Investment in China

Brooke Avory, Adam Lane
BSR
In May 2008, an earthquake hit the western Chinese province of Sichuan, taking 80,000 lives and displacing millions of others. The earthquake inspired an increase in donations from RMB13.3 billion in 2007 to RMB76.4 billion in 2008 and highlighted...

Reports

10.25.11

The Asia-Pacific Economic Cooperation (APEC) Meetings in Honolulu: A Preview

Michael F. Martin
Peony Lui
Congressional Research Service
The United States will host the Asia-Pacific Economic Cooperation’s (APEC’s) 19th Economic Leaders’ Meeting in Honolulu, HI, on November 12 & 13, 2011. APEC was founded in 1989 to facilitate trade and investment liberalization in the Asia-...

Reports

09.30.11

China-U.S. Trade Issues

Wayne M. Morrison
Peony Lui
Congressional Research Service
U.S.-China economic ties have expanded substantially over the past three decades. Total U.S.-China trade rose from $2 billion in 1979 to $457 billion in 2010. Because U.S. imports from China have risen much more rapidly than U.S. exports to China,...

Reports

09.28.11

Hong Kong’s Recovery from the Global Financial Crisis

International Monetary Fund (IMF)
Hong Kong’s economy was severely affected by the global financial crisis (through both trade and financial channels). A recovery is now underway, fueled by growth on the Mainland, supportive policies, and accommodative monetary conditions imported...

Reports

09.28.11

Market Integration in China

Qingqing Chen, Chor-Ching Goh, Bo Sun, and Lixin Colin Xu
World Bank
Over the last three decades, China's product, labor, and capital markets have become gradually more integrated within its borders, although integration has been significantly slower for capital markets. There remains a significant urban-rural...

Reports

09.28.11

Growth Poles and Multipolarity

Jonathon Adams-Kane and James Jerome Lim
World Bank
This paper develops an empirical measure of growth poles and uses it to examine the phenomenon of multipolarity. The authors formally define several alternative measures, provide theoretical justifications for these measures, and compute polarity...

Reports

09.26.11

China’s Holdings of U.S. Securities: Implications for the U.S. Economy

Wayne M. Morrison, Marc Labonte
Peony Lui
Congressional Research Service
Given its relatively low savings rate, the U.S. economy depends heavily on foreign capital inflows from countries with high savings rates (such as China) to meet its domestic investment needs and to fund the federal budget deficit. The willingness...

Reports

08.30.11

Asian Alliances in the 21st Century

Dan Blumenthal, Michael Mazza, Randall Schriver, Mark Stokes, L.C. Russell Hsiao
American Enterprise Institute for Public Policy Research
Asia will become the epicenter of geopolitical activity in the 21st century and the budding U.S.-China security rivalry, conditioned by deep economic interdependence, will shape the region’s future. Perhaps the greatest benefactor of American policy...

Sinica Podcast

08.12.11

The Schadenfreude Podcast

Kaiser Kuo, Jeremy Goldkorn & more from Sinica Podcast
Last week must have felt good for embattled Chinese patriots. Not only did the United States lose its coveted triple-A rating from Standard and Poor’s, but months after unrest in the Middle East sparked renewed speculation about political...

Reports

08.01.11

Measuring the Economic Gain of Investing in Girls

Jad Chaaban and Wendy Cunningham
World Bank
This report discusses the economic impact of the exclusion of girls from productive employment in developing countries. The paper explores the linkages between investing in girls and potential increases in national income by examining three widely...

Reports

07.27.11

China’s Macroeconomic Rebalancing

International Monetary Fund (IMF)
In May and June 2011, an International Monetary Fund staff team held discussions in Chengdu, Shanghai, and Beijing, which this report documents. The consultation examined China’s macroeconomic outlook, the potential for a property price bubble, the...

Reports

07.26.11

Toward a Healthy and Harmonious Life in China

Shiyong Wang, Patricio Marquez, and John Langenbrunner
World Bank
China’s 12th five-year plan (2011-2015) aims to promote inclusive, equitable growth and development by placing an increased emphasis on human development. Good health is an important component of human development, not only because it makes people’s...

Reports

07.01.11

People’s Republic of China: Spillover Report for the 2011 Article IV Consultation and Selected Issues

International Monetary Fund (IMF)
This report discusses the outward effects of China’s economic policies on the rest of the world. The report does not try to capture the full extent and historical significance of China’s new influence on the world economy. Rather, it focuses on a...

Reports

07.01.11

The External Impact of China’s Exchange Rate Policy: Evidence from Firm Level Data

Barry Eichengreen and Hui Tong
Sara Segal-Williams
International Monetary Fund (IMF)
The authors examine the impact of renminbi revaluation on foreign firm valuations, considering two surprise announcements of changes in China’s exchange rate policy in 2005 and 2010 and employing data on some 6,000 firms in forty-four economies...

Reports

06.28.11

The United States and China: Macroeconomic Imbalances and Economic Diplomacy

Philip I. Levy
American Enterprise Institute for Public Policy Research
The United States and China are now the two largest economies in the world. The relationship between the two countries is multifaceted and goes well beyond economic relations, but questions of macroeconomic imbalances have remained at the heart of...

The High Price of the New Beijing

Ian Johnson from New York Review of Books
One recent weekend, I went for a walk through the alleys around the Qianmen shopping district, once Beijing’s commercial heart and still home to nationally known traditional shops. One of its chief side streets, Dazhalan, had been turned into a Ye...

Quality of Life: India vs. China

Amartya Sen from New York Review of Books
The steadily rising rate of economic growth in India has recently been around 8 percent per year (it is expected to be 9 percent this year), and there is much speculation about whether and when India may catch up with and surpass China’s over 10...

Reports

05.01.11

An American Open Door?

Daniel H. Rosen and Thilo Hanemann
Asia Society
Over the past decade, China’s unprecedented surge of economic dynamism and development has radically altered the global landscape and affected a host of international relationships. One of the most significant trends that will influence how the...

Sinica Podcast

05.01.11

Nouriel Roubini Gets It in the A** in China

Kaiser Kuo, Jeremy Goldkorn & more from Sinica Podcast
China Doomerism, the once familiar retreat of a chummy pantheon of economic cranks, recently went mainstream with Nouriel Roubini’s pronouncement that the Chinese economy is wrestling with over-investment and his prediction that it will likely come...

Reports

04.28.11

Identifying the Linkages Between Major Mining Commodity Prices and China’s Economic Growth—Implications for Latin America

Yongzhen Yu
International Monetary Fund (IMF)
Major mining commodity prices are inherently volatile and cyclical. High levels of investment in China have been a key driver in the strong world demand for minerals and metals over the past decade. The urbanization and industrialization of China...

Reports

04.27.11

China’s Green Revolution

Isabel Hilton, Olivia Boyd, Tan Copsey, Hu Angang, Liang Jiaochen, Liu Jianqiang, Shin Wei Ng, Linden Ellis, Thomas Ho, Sam Geall
chinadialogue
In March, China officially adopted its Twelfth Five-Year Plan, a blueprint for the country’s development from 2011 to 2015. Its green targets will shape China’s action on the environment over the next five years. To mark the occasion, chinadialogue...

Reports

04.01.11

Diagnosing Development Bottlenecks: China and India

Wei Li, Taye Mengistae, and Lixin Colin Xu
World Bank
Although it had a a lower income level than India in 1980, China's 2006 per capita gross domestic product stood more than twice that of India's. This paper investigates the role of the business environment in explaining China's...

Reports

03.01.11

How Do Special Economic Zones and Industrial Clusters Drive China’s Rapid Development?

Douglas Zhihua Zeng
World Bank
In the past thirty years, China has achieved phenomenal economic growth, an unprecedented development “miracle” in human history. How did China achieve this rapid growth? What have been its key drivers? And, most important, what can be learned from...

Reports

02.01.11

A Seventeen-Province Survey of Rural Land Rights in China

He Jianan
Landesa
China continues to boost economic development in the countryside by extending secure land tenure rights to its 200 million farming families, according to findings from a seventeen-province survey, published in the 2011 Chinese Academy of Social...

Sinica Podcast

01.07.11

China 2010—Year in Review

Kaiser Kuo, Jeremy Goldkorn & more from Sinica Podcast
This week we take a look back at China in 2010, revisiting some of the biggest stories we covered and discussing a few we missed. With Kaiser Kuo hosting the discussion as usual, our guests in the studio include Sinica stalwarts and regulars Jeremy...

Reports

01.01.11

Reducing Inequality for Shared Growth in China: Strategy and Policy Options for Guangdong Province

World Bank
This report is the result of a partnership of the World Bank and the Guangdong provincial government to assess economic and regional inequality in Guangdong. It defines three major types of inequality: Absolute poverty, Inequality of Opportunity,...

Reports

12.01.10

Can China’s Rural Elderly Count on Support from Adult Children? Implications of Rural to Urban Migration

John Giles, Dewen Wang, and Changbao Zhao
World Bank
Support from the family continues to be an important source of support for the rural elderly, particularly the rural elderly over seventy years of age. Decline in likelihood of co-residence with, or in close proximity to, adult children raises the...

Reports

12.01.10

The Role of Trade Costs in Global Production Networks: Evidence from China’s Processing Trade Regime

Alyson C. Ma and Ari Van Assche
World Bank
This paper uses data from China's processing trade regime to analyze the role of trade costs on trade within global production networks (GPNs). Under this regime, firms are granted duty exemptions on imported inputs as long as they are used...