From foreign trade to international investment: a new step in China’s integration with the world economy

China’s economic strategy is facing new challenges arising from the changes in the world economy as well as in its domestic conditions. Given the sluggish global economy and the rise of protectionist policies, China cannot expect external demand to contribute to its economic growth as much as in the...

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Bibliographic Details
Published in:Economic change and restructuring 2013-03, Vol.46 (1), p.25-43
Main Author: Lemoine, Françoise
Format: Article
Language:English
Subjects:
China
Comparative advantage
Development Economics
Economic Growth
Economic models
Economic Policy
Economic statistics
Economic strategies
Economic theory
Economics
Economics and Finance
Exports
Foreign direct investment
Foreign investment
Global economy
International Economics
International integration
International trade
Macroeconomics/Monetary Economics//Financial Economics
Manufacturing
Political Economy/Economic Systems
Protectionist measures
Studies
Technology transfer
World economy
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Summary:China’s economic strategy is facing new challenges arising from the changes in the world economy as well as in its domestic conditions. Given the sluggish global economy and the rise of protectionist policies, China cannot expect external demand to contribute to its economic growth as much as in the past. On the domestic side, the working age population has ceased to increase and will soon diminish; rising domestic costs will force Chinese exporters to shift from price competitiveness to quality upgrading and to build new comparative advantages. An important dimension of China’s new strategy will be the expansion of its direct investment abroad. China which has already become the leading world exporter and has been up to now a major recipient of foreign direct investment is likely to turn out to be a major international investor. China has accumulated large foreign assets which mainly consist of foreign government debt securities and is now aiming at diversifying its external assets through promoting Chinese firms’ investment abroad.
ISSN:1573-9414
1574-0277
DOI:10.1007/s10644-012-9134-3