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Ed Webb

China: Soon the most visible victim of deglobalisation - Al Jazeera English - 1 views

www.aljazeera.com/...alisation-161016052547323.html

China economy globalization trade investment FDI economics analysis

shared by Ed Webb on 25 Oct 16 - No Cached
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  • China's exports hit an all-time high in December, 2015 and (ignoring season fluctuations) have been declining ever since. China is increasingly turning inward for growth - and having trouble finding it
  • Most other countries export intermediate goods that are just parts and components of the finished goods that consumers actually buy. China more often exports the finished goods
  • both Chinese and global exports are falling
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  • the roots of today's global economy really go back to 1973, when the United States went off the gold standard and most countries moved from fixed to floating exchange rates. Floating exchange rates meant that the era of managed trade was over. The global economy moved into a new phase driven by market forces. The oil exporting countries of the Gulf were the first to benefit as the market price for oil quadrupled between 1973 and 1974. China came to the party just a few years later. Since then the global economy has become more and more open. After the currency liberalisation of 1973 came a huge increase in international trade and then, in the 1990s, in foreign investment. Both trade and investment peaked in 2007-2008
  • Annual global FDI is down roughly 50 percent from its 2007 peak of just over $3 trillion. It's still much larger than it was in the 1990s or earlier decades, but global FDI has stabilised at roughly the levels of the early 2000s.
  • These days China has to compete with India, Southeast Asia, Latin America and even Africa for scarce foreign investment dollars
  • China's export-oriented garment industry employs about 10 million people. These jobs are increasingly threatened as companies move production to lower-cost countries such as Vietnam
  • China has been the most visible beneficiary of the increasing globalisation of the global economy. Soon it may be the most visible victim of deglobalisation
Ed Webb

The Belt and Road Initiative Is a Corruption Bonanza - Foreign Policy - 3 views

foreignpolicy.com/...iative-is-a-corruption-bonanza

China corruption investment FDI OBOR

shared by Ed Webb on 22 Jan 19 - No Cached
  • Many countries that receive BRI investments suffer from high levels of corruption. On the TRACE Bribery Risk Matrix, most rank in the lower 50 percent, and 10 are among the riskiest 25 countries in the world. They often have opaque legislative processes, weak accountability mechanisms, compliant media organizations, and authoritarian governments that don’t permit dissent
  • China, of course, struggles with its own share of corruption. In fact, some of China’s own infrastructural marvels have been built through means that were less than scrupulous. President Xi Jinping’s anti-corruption purges have frozen some of that at home. In its construction projects abroad, however, Beijing’s approach seems to be “whatever works.” In no part of China’s lengthy declaration of the BRI’s principles is any attempt made to discourage corruption. And according to a report by Transparency International, no charges have ever been brought in China against a company, citizen, or resident for corrupt practices committed overseas.
  • While Chinese corruption at home doesn’t threaten to bankrupt the government, Chinese corruption in smaller, poorer countries sometimes does. For some of these countries, China’s BRI project is the biggest infrastructural endeavor they’ve ever attempted—a high-stakes gamble collateralized with mountains of debt. When such projects are approved by local leaders more interested in enriching themselves than in weighing the cost for their country, locals can find themselves crushed beneath the weight of white elephants.
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  • for China, the BRI is as much a foreign-policy instrument—and sometimes a domestic political move—as it is an economic program
  • Sri Lanka, where Hambantota Port was built by China under former President Mahinda Rajapaksa. When Rajapaksa faced an electoral challenge in 2015, money earmarked for the port’s construction somehow found its way into the president’s campaign coffers. In the end, Rajapaksa lost the election, and the port proved so unprofitable that the new government was forced to hand it over to China in a debt-for-equity swap.
  • The relationship between China and corrupt BRI partners is symbiotic and, often, more complex than simple bribery
Ed Webb

Why Factories Leaving China Aren't Going to India - Bloomberg - 0 views

www.bloomberg.com/...ng-china-aren-t-going-to-india

Africa India Pakistan Bangladesh Vietnam China development FDI manufacturing industry opinion

shared by Ed Webb on 26 Oct 19 - No Cached
  • Vietnam seems to be the consensus pick for winner of the U.S.-China trade war, as Chinese and other manufacturers shift production to the cheaper Southeast Asian nation. If there’s a loser, at least in terms of missed opportunities, it may be the countries of South Asia.
  • Faced with rising costs, Chinese manufacturers must decide whether to invest in labor-saving automation technologies or to relocate. Those choosing the latter present an enormous opportunity for less-developed countries, as Chinese companies can help spark industrialization and much-needed economic transformation in their new homes. 
  • The only proven pathway to long-lasting, broad-based prosperity has been to build a manufacturing sector linked to global value chains, which raises productivity levels and creates knock-on jobs across the whole economy
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  • African countries, too, are making manufacturing a top priority. Ethiopia alone has opened nearly a dozen industrial parks in recent years and set up a world-class government agency to attract foreign investment. The World Bank has lauded sub-Saharan Africa as the region with the highest number of reforms each year since 2012.
  • In the last five years, the American Enterprise Institute’s China Global Investment Tracker has recorded 13 large Chinese investment deals in Africa and only nine in South Asia.
  • In the past few years, Bangladesh has fallen to 176 out of 190 countries in the global Ease of Doing Business country rankings. DBL Group, a Bangladeshi company, is investing in a new apparel manufacturing facility that will generate 4,000 jobs -- in Ethiopia.
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