It seems to be the consensus among longtime China watchers that the Chinese media has become more radicalized over the last five years, with both online and traditional channels now feeding the public conflicting stories of both reflexive scorn for the status quo or patriotic jingoism. But how radical are things getting? And what are the limits to how much further they can go, or will be allowed to go, on either side?
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 direct investment. What could account for this pattern of investment? This paper is the first to show that perceptions of corruption are highly correlated with indices of economic freedom, but uncorrelated with indices of political freedom. Hence less corrupt countries which provide the right kind of economic environment for investors, such as personal property protection, the right to move capital in and out of the country, or the ability to trade openly in world markets receive more FDI flows. At the same time, while democratic countries ensure provision of political and civil rights for citizens, these are not an automatic guarantee of economic freedoms. In fact, the correlation between the democracy index and these indices of economic freedom is surprisingly low.
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 philanthropy as an important approach to addressing these issues. Coupled with this increased focus on philanthropy was a sharp increase in public transparency that manifested in a variety of ways. After the initial rush of donations had passed, the disaster and the large donations triggered public scrutiny and transparency over the use and impact of charitable funds. Increased access to the internet and growing use of social media enable the public to both participate in philanthropy and monitor the social investment activities of a range of different actors, including business, nonprofits, and even, at times, local government. In an effort to assess the opportunities for social investment in China, BSR interviewed government, nonprofit, think-tank, media, and private-sector leaders to capture their visions for the future of the country’s social sector. In this paper, we explore these leaders’ views of the defining issues, challenges, and opportunities shaping the growth of social investment in China.
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, Chinese officials are straying from the normal sequence of steps toward currency internationalization. Why might that be? In this Center for Geoeconomic Studies Working Paper, produced in association with CFR's International Institutions and Global Governance program, Peter Garber seeks to answer that question by investigating what drives offshore renminbi markets and how they are evolving.
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 capital that could send China into the throes of financial crisis. In this Center for Geoeconomic Studies Working Paper, produced in association with CFR’s International Institutions and Global Governance program, Professor Takatoshi Ito examines the progress of the renminbi’s march toward international status and evaluates the possible paths forward.
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 described the scenario in the 1960s, this “Triffin Paradox” threatens the global financial system again today as demand for reserves has skyrocketed among emerging market economies. In this Center for Geoeconomic Studies Working Paper, produced in association with CFR’s International Institutions and Global Governance program, Professor Alan Taylor considers whether China might play a larger role in stabilizing the world economy by supplying a reserve asset of its own—an internationalized renminbi.
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 predecessors in both aim and intent. In this working paper, the author explains how the renminbi’s ascent is without historical precedent and why China might be pursuing such an unorthodox strategy.
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, this managed internationalization occurs at a time when China’s financial development is still in a transitional phase featuring capital controls and other constraints on credit growth and allocation. In this working paper, the author explores the policy challenges facing Chinese authorities as their pursuit of an internationalized renminbi threatens to undermine the effectiveness of their domestic financial market controls.
