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This paper provides an overview of Chinese financial and trade integration in recent decades, and the challenges facing China in the coming years. China had been a prime example of export-led growth, benefiting from learning by doing, and by adopting foreign know-how, supported by a complex industrial policy. While the resultant growth has been spectacular, it comes with hidden but growing costs and distortions. The Chinese export-led growth path has been challenged by its own success, and the global financial crisis forced China toward rebalancing, which is a work in progress. Reflecting on the internationalization of the CNY, rapid acceleration of the commercial internationalization of the CNY is expected. In contrast, there are no clear-cut reasons to rush with the full CNY financial internationalization: the gains from CNY financial internationalization are overrated. [ABSTRACT FROM AUTHOR]

China's relationship with Africa has grown exponentially over the last decade with US$95 billion in bilateral trade in 2008 and US$5.4 billion of Chinese investment in Africa for the same year. The growth of Sino-African relations also has an impact on the role of traditional development partners in Africa in particular in the aftermath of the 2008 financial crisis, which has already led some traditional development partners to reduce their aid budgets and subsequently their Official Development Assistance (ODA) flows to Africa. The objective of this paper is to analyse different development cooperation modalities in Africa of traditional development partners and China. This requires identifying trends in aid, debt relief, general budget support, trade, preferential trade access, and investment flows of both traditional development partners and China. The paper advocates that complementarities can be built between these development modalities on a national, regional and global level. This would enhance development effectiveness, increase efficiency and create win-win situations which would be beneficial to African countries, China and traditional development partners. [ABSTRACT FROM AUTHOR]

China's foreign trade has entered a new stage, marked by some profound changes since 2003. After 5 years' consecutive high growth, China's foreign trade experienced a significant slowdown in growth following the onset of the global financial crisis in 2008. The purpose of this article is to present a review of the development in China's foreign trade over the past 10 years, and to explore important changes that have taken place during this period of time. A major finding of the present paper is that the traditional forces driving the high export growth in China, that is, low-cost labor, low-cost resources and low-cost money, have been disappearing. The policy implication is that over the next 10-15 years, the most important conditions for sustaining high export growth will be promoting the development and export of private enterprises in traditional heavy industries and high-technology industries, and relying on technological progress and high productivity to propel export expansion. [ABSTRACT FROM AUTHOR]

In 2014, China proposed the Belt and Road policy, which has pushed China's outward foreign direct investment (OFDI) to over tens of billions of US dollars. However, existing studies have not reached a consensus about the decisive factors in China's OFDI. To verify whether China's OFDI activities are motivated by profits, this paper applies a measure of country-specific growth opportunities adopted by Bekaert et al. (2007) to measure the growth opportunities of the target countries for China's OFDI. A multinational panel data model, based on data from 51 countries from 2003 to 2012, is used to explore the relationship between host countries' growth opportunities and China's OFDI. Overall, the analysis finds that China's OFDI does not follow the host countries' growth opportunities but exhibits different features toward developed countries and developing countries. For developed countries, China's OFDI follows host countries' growth opportunities to some extent. In the case of developing countries, China's OFDI does not follow host countries' growth opportunities. When we consider factors such as a host country's financial development and political stability, improvement in these factors improves the attractiveness of the host country to China's OFDI. It is also found that the 2008 global financial crisis did not have a very significant impact on China's OFDI activities. [ABSTRACT FROM AUTHOR]

This paper investigates the link between hot money and business cycle volatility in China from January 1997 to December 2009. Using the structural vector error correction model, we find a considerable degree of long-run cointegration and bidirectional causality effects between hot money and business cycle volatility. The speculative shocks are found to temporarily promote China's economic growth, but also to exacerbate business cycle volatility. The liquidity shock stemming from hot money is shown to be the primary factor responsible for the significantly enhanced fluctuation in business cycles during the most recent global financial crisis period. This could be detrimental to the smooth operation of financial markets. Therefore, in forming future policies, it is critical for policy-makers to take precautions against the speculative factors. [ABSTRACT FROM AUTHOR]

China has lifted a record number of people out of poverty, has had sustained levels of economic growth-at environmental and social costs-started a global economic and political rise and is developing effective responses to the global financial crisis. It is making these transformations with institutions that continue to surprise international observers. An increasing number of studies have started to articulate the lessons from China's development. This paper reviews the different interpretations of these lessons, and the process of lesson learning, and the question what China's dramatic transformations over the last 30 years imply for development studies and practice. Copyright © 2010 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper applies a structural vector autoregression analysis to quantify the impact of the global financial crisis on China. It is found that the impact is indeed sizeable: a 1-percent decline in economic growth in the USA, the EU and Japan is likely to lead to a 0.73-percent decline in growth in China. The article discusses whether the current measures of fiscal stimulus are adequate to offset the sharp decline in external demand. Although there is little doubt that the massive fiscal stimulus will largely offset the significant shortfalls in external demand, the current growth pattern in China will be increasingly unsustainable in the long term. China's reform cycles suggest that external shocks are often opportunities for structural reforms. Therefore, the crisis could also be a catalyst for rebalancing China's economic structure so as to return the economy to a sustainable path. [ABSTRACT FROM AUTHOR]

From the perspective of the institutional environment, this study explores the reasons and mechanisms behind the widening of the economic disparity between China's North and South during the economic development transformation from a factor expansion model to an innovation‐driven model. By defining the institutional environment in terms of the government–market relationship and the non‐state‐owned economy development, the theoretical analysis shows that compared with the South, the government intervenes more in the market and the proportion of state‐owned economy is higher in the North. The differences in the institutional environment are an important reason for the widening of the North–South economic disparity in China during the transformation of China's development model. Taking this transformation after the 2008 international financial crisis as a quasi‐natural experiment, this study constructs a difference‐in‐difference model for empirical testing based on the differences in the regional impact of the economic development model transformation on different institutional environments. It was found that after the economic development model entered the innovation‐driven stage, those regions with a better institutional environment significantly promoted their economic growth. Further mechanism tests have found that innovation capability is an important mechanism for the institutional environment that affects the North–South economic disparity. [ABSTRACT FROM AUTHOR]

The rapid pace of China's economic and trade development has been considered as a great success since the entry of WTO in 2001. Most recently, China has succeeded in coping with the global financial crisis and achieved a rapid V-shaped recovery which rebounded to two digit growth rate and lead to strengthening its international status. Nevertheless, China has exposed many potential problems in face of the financial crisis which due to international and domestic unbalanced features of China's economic operation system. The pattern of 'China Manufacturing and World Consuming' is a game with no winners, while the investment leaded economic development mode achieves high growth rate but without enriches its own residents. The current imbalanced economic development mode cannot be sustained and shall be changed in the future which is not only the consensus of economists at home and abroad, but also a striving goal for the Chinese government for its '12th Five-Year Plan'. However, China will face great and formidable challenges by changing the economic development mode to achieve an equilibrium state. [ABSTRACT FROM AUTHOR]

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