Spillover Effects of China Going Global

China's remarkable transition from merely being a “world factory”, to the source of the world's new R&D and product design and innovation since the 1980s is the key focus of Spillover Effects of China Going Global.

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Author: Joseph Pelzman

Publisher: World Scientific

ISBN: 9789814603362

Category: Business & Economics

Page: 388

View: 415

When the People's Republic of China (PRC) was granted Most Favored Nation (MFN) status by the United States in 1979, no one imagined the massive transformation the Chinese economy would make within a few decades. China's remarkable transition from merely being a “world factory”, to the source of the world's new R&D and product design and innovation since the 1980s is the key focus of Spillover Effects of China Going Global. In this insightful and unique book, Joseph Pelzman shows how the second largest world economy triggered off many spillover effects beyond mass-labour production of durable and non-durable goods — such as the provision of foreign aid to African, Latin American and Asian economies, and increasing focus on internal endogenous innovation, research and development. He provides a comprehensive look at these spillover effects and analyzes how they will undoubtedly bring positive opportunities for others within the rest of the world in the 21st Century.

China s Economic Growth

This paper presents some facts on China’s role in the world economy and measures the impact of China’s growth on growth in the rest of the world in the short and long term.

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Author: Mr.Athanasios Vamvakidis

Publisher: International Monetary Fund

ISBN: 9781455201761

Category: Business & Economics

Page: 23

View: 324

This paper presents some facts on China’s role in the world economy and measures the impact of China’s growth on growth in the rest of the world in the short and long term. Short-run estimates based on VARs and error-correction models suggest that spillover effects of China’s growth have increased in recent decades. Long-term spillover effects, estimated through growth regressions based on panel data, are also significant and have extended in recent decades beyond Asia. The estimates are robust to the effects of global and regional shocks, changes in model specification, and sample period.

Investment Led Growth in China

Several economies within China’s supply chain are increasingly exposed to its investment-led growth and face growing risks from a deceleration in investment in China.

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Author: Mr.Ashvin Ahuja

Publisher: International Monetary Fund

ISBN: 9781475556414

Category: Business & Economics

Page: 23

View: 268

Over the past decade, China’s growth model has become more reliant on investment and its footprint in global imports has widened substantially. Several economies within China’s supply chain are increasingly exposed to its investment-led growth and face growing risks from a deceleration in investment in China. This note quantifies potential global spillovers from an investment slowdown in China. It finds that a one percentage point slowdown in investment in China is associated with a reduction of global growth of just under one-tenth of a percentage point. The impact is about five times larger than in 2002. Regional supply chain economies and commodity exporters with relatively less diversified economies are most vulnerable to an investment slowdown in China. The spillover effects also register strongly across a range of macroeconomic, trade, and financial variables among G20 trading partners.

China Spillovers

It finds that historically, the average impact of growth shocks in China on global output has been statistically significant but limited, but since the early 2000s, the magnitude of spillovers has significantly increased.

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Author: Davide Furceri

Publisher: International Monetary Fund

ISBN: 9781475546637

Category: Business & Economics

Page: 15

View: 591

Until recently, China has been the leading contributor to global economic growth and—since the recent global financial crisis—a stabilizing driver of its evolution. However, as China recently began to rebalance its economy away from investment and exports and toward consumption, its GDP growth slowed significantly—partly reversing the country’s contribution to global output and trade growth—and is expected to continue to decline gradually over the medium term. There is little consensus regarding the consequences of a China’s growth slowdown for the rest of the world, with some arguing that a significant slowdown in China may have large implications and possibly lead to a worldwide recession if the “rebalancing” process is not well managed, and others suggesting that even a significant slowdown in China is unlikely to have large global effects, as its role in the world economy is still limited This note contributes to the ongoing debate by analyzing how growth shocks in China affect particular regions and country groups and how the impact and key transmission channels of these growth shocks have increased over time. It finds that historically, the average impact of growth shocks in China on global output has been statistically significant but limited, but since the early 2000s, the magnitude of spillovers has significantly increased. Trade linkages remain the main transmission channels, with larger effects for net commodity exporters and countries mostly exporting manufacturing goods. Also, spillover effects tend to be larger during periods of high global uncertainty and have been positively associated with an increase in the share of industry in total value in China, which suggests an important role of the “rebalancing” process.

Foreign Direct Investment in China

This book provides an insightful exploration of whether foreign direct investment (FDI) can promote the productivity of domestic enterprises.

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Author: Ziliang Deng

Publisher: Routledge

ISBN: 9781136672637

Category: Business & Economics

Page: 262

View: 732

This book provides an insightful exploration of whether foreign direct investment (FDI) can promote the productivity of domestic enterprises. The book is based on a series of dedicated research conducted in the context of the Chinese economy, which has been the largest FDI host among the developing economies since 1993. The main themes of this book are (a) based on the latest literature and first-hand research, outlining possible mechanisms through which foreign direct investment could promote the productivity of domestic enterprises; (b) developing a comprehensive research framework to quantify the spillover effects with cutting-edge methodology; (c) constructing a decision support system for evaluating FDI policy reforms with advanced computer simulation techniques; (d) evaluating the broader impact of FDI spillovers on banking system and trade pattern. The book examines topical economic issues in the contemporary world economy from innovative perspectives, namely, how the presence of multinational enterprises has been one of the most important microeconomic drivers for the Chinese economy, how foreign banks have helped to enable Chinese banking system survive the global financial crisis, and how the domestic enterprises have learned to do exports from multinational affiliates and have changed the landscape of U.S.-Asian trade. The book incorporates the latest development of economic theory as well as computational economics model.

The Spillover Effects of a Downturn in China s Real Estate Investment

Real estate investment accounts for a quarter of total fixed asset investment (FAI) in China.

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Author: Mr. Ashvin Ahuja

Publisher: International Monetary Fund

ISBN: 9781475560664

Category: Business & Economics

Page: 24

View: 695

Real estate investment accounts for a quarter of total fixed asset investment (FAI) in China. The real estate sector’s extensive industrial and financial linkages make it a special type of economic activity, especially where the credit creation process relies primarily on collateral, like in China. As a result, the impact on economic activity of a collapse in real estate investment in China—though a low-probability event—would be sizable, with large spillovers to a number of China’s trading partners. Using a two-region factor-augmented vector autoregression model that allows for interaction between China and the rest of the G20 economies, we find that a 1-percent decline in China’s real estate investment would shave about 0.1 percent off China’s real GDP within the first year, with negative spillover impacts to China’s G20 trading partners that would cause global output to decline by roughly 0.05 percent from baseline. Japan, Korea, and Germany would be among the hardest hit. In that event, commodity prices, especially metal prices, could fall by as much as 0.8–2.2 percent below baseline one year after the shock.

China s Economic Growth

This paper presents some facts on China’s role in the world economy and measures the impact of China’s growth on growth in the rest of the world in the short and long term.

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Author: Mr. Athanasios Vamvakidis

Publisher: International Monetary Fund

ISBN: 9781455201488

Category: Business & Economics

Page: 23

View: 376

This paper presents some facts on China’s role in the world economy and measures the impact of China’s growth on growth in the rest of the world in the short and long term. Short-run estimates based on VARs and error-correction models suggest that spillover effects of China’s growth have increased in recent decades. Long-term spillover effects, estimated through growth regressions based on panel data, are also significant and have extended in recent decades beyond Asia. The estimates are robust to the effects of global and regional shocks, changes in model specification, and sample period.

China and Asia in Global Trade Slowdown

Asia and China made disproportionate contributions to the slowdown of global trade growth in 2015.

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Author: Gee Hee Hong

Publisher: International Monetary Fund

ISBN: 9781475526608

Category: Business & Economics

Page: 46

View: 863

Asia and China made disproportionate contributions to the slowdown of global trade growth in 2015. China’s import growth slowed starkly, driven by both external and domestic factors, including a rebalancing of demand. Econometric results point to weak investment and rebalancing as the main causes of the import slowdown. Spillover effects from China’s rebalancing are estimated for some 60 countries using value-added trade data, and are found to be more negative on Asia and commodity exporters than others.

Spillover Effects of Exchange Rates

This paper estimates the impact of China's exchange rate changes on exports of competitor countries in third markets, which we call the "spillover effect".

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Author: Aaditya Mattoo

Publisher: International Monetary Fund

ISBN: 9781475502626

Category: Business & Economics

Page: 37

View: 264

This paper estimates the impact of China's exchange rate changes on exports of competitor countries in third markets, which we call the "spillover effect". We use recent theory to develop an identification strategy in which competition between China and its developing country competitors in specific products and destinations plays a key role. We exploit the variation - afforded by disaggregated trade data - across exporters, importers, product, and time to estimate this spillover effect. We find robust evidence of a statistically and quantitatively significant spillover effect. Our estimates suggest that a 10 percent appreciation of China's real exchange rate boosts on average a developing country's exports of a typical 4-digit HS product category to third markets by about 1.5-2 percent. The magnitude of the spillover effect varies systematically with product characteristics as implied by theory.