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52. Growth and Recovery in a Time of Default: Lessons from the Role of the Urban Sector in Argentina
- Author:
- Michael Cohen
- Publication Date:
- 03-2011
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- International narratives on Argentina's recovery from the crisis of 2001-02 tend to emphasize the role of rising commodity prices and growing demand from China. Argentina is said to have been 'lucky', saved by global demand for its agricultural exports. The international narrative has also been used by local agricultural exporters to justify their objections against higher export taxes during periods of high commodity prices. These narratives are not correct. Data on the country's recovery show that it was not led by agricultural exports but was fuelled by urban demand and production. When the Convertibility period ended and the peso was devalued in 2002, price increases for imports stimulated the production of domestic goods and services for consumers. This production in turn generated multiplier effects which supported small and medium-sized firms and helped to create many new jobs. This later produced a revival of the construction and then the manufacturing sectors as well.
- Topic:
- Agriculture, Economics, International Trade and Finance, Markets, and Financial Crisis
- Political Geography:
- China, Argentina, and Latin America
53. The Elephant in the "Green Room": China and the Doha Round
- Author:
- Arvind Subramanian, Aaditya Mattoo, and Francis Ng
- Publication Date:
- 05-2011
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The puzzle about the Doha Round of multilateral trade negotiations in the World Trade Organization (WTO) is not why it is on life support now but how it has survived as a viable multilateral initiative for so long. From the very beginning, it was clear that the Round suffered from a lack of private-sector interest, the engine that had driven previous rounds of successful trade negotiations. At most, Doha promised to deliver some security of access for unilateral liberalization previously undertaken by countries and some modest incremental market opening (Martin and Mattoo 2009; Hufbauer, Schott, and Wong 2010). That the Round had much to be modest about was reflected in the failure of even antiglobalization protesters to show up for the more recent meetings of the Doha Round.
- Topic:
- Economics, Globalization, International Trade and Finance, and Markets
- Political Geography:
- China
54. Who Captures Value in Global Supply Chains?
- Author:
- Jyrki Ali-Yrkkö, Petri Rouvinen, Timo Seppälä, and Pekka Ylä-Anttila
- Publication Date:
- 02-2011
- Content Type:
- Working Paper
- Institution:
- Berkeley Roundtable on the International Economy
- Abstract:
- Available statistics tell us little about the economic consequences of increasing global dispersion of production processes. In order to shed light on the issue, we perform grass roots detective work to uncover the geography of value added in the case of a Nokia N95 smartphone circa 2007. The phone was assembled in Finland and China. In the case when the device was assembled and sold in Europe, the value-added share of Europe (EU-27) rose to 68%. Even in the case when it was assembled in China and sold in the United States, Europe captured as much as 51% of the value added, despite of the fact that it had rather little role in supplying the physical components. Our analysis illustrates that international trade statistics can be misleading; the capture of value added is largely detached from the physical goods flows. It is rather services and other intangible aspects of the supply chain that dominate. While final assembly – commanding 2% of the value added in our case – has increasingly moved offshore, the developed countries continue to capture most of the value added generated by global supply chains.
- Topic:
- Economics, Globalization, Industrial Policy, International Trade and Finance, and Markets
- Political Geography:
- China, Europe, and Finland
55. Are resurging state-owned enterprises impeding competition overseas?
- Author:
- Nilgün Gökgür
- Publication Date:
- 04-2011
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- There are no up-to-date systematic data on the size, composition, ownership structure, and economic weight of state-owned enterprises (SOEs), so we are unable to assess the impact of SOE performance on stakeholders in domestic and overseas markets. Yet there is sufficient evidence of their expansion, especially following the 2008 financial crisis. Emerging markets, led by China, are now increasingly encouraging their SOEs to expand globally as multinational enterprises (MNEs).
- Topic:
- Economics, Emerging Markets, Globalization, and Markets
- Political Geography:
- Africa and China
56. Inward FDI in Israel and its policy context
- Author:
- Yair Aharoni
- Publication Date:
- 01-2011
- Content Type:
- Working Paper
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- In the first four decades of its existence, Israel was not successful in attracting inward foreign direct investment (IFDI) despite attempts to do so. In the past two decades, Israel have become a haven for multinational enterprises (MNEs) that have taken advantage of its unique assets – among them a skilled, educated workforce and cutting-edge research-and-development (R) capabilities – by establishing production lines or R centers and acquiring dozens of successful start ups. Israel's IFDI stock sharply increased from US$ 4.5 billion in 1990 to US$ 71.3 billion in 2009. It is expected that IFDI will further accelerate following Israel's accession to the OECD in May 2010 and as more firms from emerging market economies, including China and India, will come to appreciate its characteristics as an ideal locational choice. Israel also weathered the global economic crisis well, even though IFDI declined sharply. Israel actively encourages IFDI, mainly in high technology areas. In 2010, the Government also created special incentives to attract research centers of financial institutions.
- Topic:
- Economics, Markets, Foreign Direct Investment, and Financial Crisis
- Political Geography:
- China, Middle East, India, and Israel
57. Intercity Buses: The Forgotten Mode
- Author:
- Randal O'Toole
- Publication Date:
- 06-2011
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- The debate over President Obama's fantastically expensive high-speed rail program has obscured the resurgence of a directly competing mode of transportation: intercity buses. Entrepreneurial immigrants from China and recently privatized British transportation companies have developed a new model for intercity bus operations that provides travelers with faster service at dramatically reduced fares.
- Topic:
- Economics, Markets, Infrastructure, and Governance
- Political Geography:
- United States and China
58. Human resources in China Prepare for opportunity
- Publication Date:
- 09-2011
- Content Type:
- Working Paper
- Abstract:
- Foreign companies continue to be attracted by the opportunities offered by China's large and rapidly growing economy. China has a population of over 1.3bn, and the size of the economy is likely to grow to just under US$13trn a year at market exchange rates by 2015. Although GDP per head will still be relatively low by the end of the forecast period, at just under US$10,000 a year, this will represent a substantial improvement from just under US$4,500 in 2010. Significant regional disparities within China will persist. The provinces of the eastern seaboard enjoy standards of living well above the national average. However, there are also markets to be found in inland China, where many large cities are located. To some extent, the size of the population and the pace of economic growth belie the challenges of operating in China. Nationwide distribution networks will increasingly be put in place, but the Chinese market is likely still to be a fragmented one by 2015.
- Topic:
- Demographics, International Trade and Finance, Markets, and Foreign Direct Investment
- Political Geography:
- China
59. Renminbi Rules: The Conditional Imminence of the Reserve Currency Transition
- Author:
- Arvind Subramanian
- Publication Date:
- 09-2011
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Against the backdrop of the recent financial crisis and the ongoing rapid changes in the world economy, the fate of the dollar as the premier international reserve currency is under scrutiny. This paper attempts to answer whether the Chinese renminbi will eclipse the dollar, what will be the timing of, and the prerequisites for this transition, and which of the two countries controls the outcome. The key finding, based on analyzing the last 110 years, is that the size of an economy—measured not just in terms of GDP but also trade and the strength of the external financial position—is the key fundamental correlate of reserve currency status. Further, the conventional view that sterling persisted well beyond the strength of the UK economy is overstated. Although the United States overtook the United Kingdom in terms of GDP in the 1870s, it became dominant in a broader sense encompassing trade and finance only at the end of World War I. And since the dollar overtook sterling in the mid-1920s, the lag between currency dominance and economic dominance was about 10 years rather than the 60-plus years traditionally believed. Applying these findings to the current context suggests that the renminbi could become the premier reserve currency by the end of this decade, or early next decade. But China needs to fulfill a number of conditions—making the reniminbi convertible and opening up its financial system to create deep and liquid markets—to realize renminbi preeminence. China seems to be moving steadily in that direction, and renminbi convertibility will proceed apace not least because it offers China's policymakers a political exit out of its mercantilist growth strategy. The United States cannot in any serious way prevent China from moving in that direction.
- Topic:
- Economics, Markets, and Monetary Policy
- Political Geography:
- United States and China
60. Chinese Commodity Imports in Ghana and Senegal: Demystifying Chinese Business Strength in Urban West Africa
- Author:
- Laurence Marfaing and Alena Thiel
- Publication Date:
- 11-2011
- Content Type:
- Working Paper
- Institution:
- German Institute of Global and Area Studies
- Abstract:
- Since the beginning of the twenty‐first century, Africa has seen the arrival of a new form of Chinese migration. Largely independent from big Chinese players, these “new entrepreneurial migrants” come to Africa not as workers in the highly prestigious state projects, but rather to follow their own economic interests. Engaging in business activities as diverse as petty manufacturing, printing, pharmaceutical and medical services, restaurants, beauty salons and last but not least, general trade, these independent Chinese migrants are often acknowledged for bringing affordable new commercial services and goods to low‐income households on the African continent. On the other hand, the high visibility of the Chinese entrepreneurial activities has also sparked anti‐Chinese sentiments among many African entrepreneurs.
- Topic:
- Economics, Imperialism, International Trade and Finance, and Markets
- Political Geography:
- Africa, China, and Ghana