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1381. Rising Food Prices: Drivers and Implications for Development

Author:
Alex Evans
Publication Date:
04-2008
Content Type:
Policy Brief
Institution:
Chatham House
Abstract:
Global food prices have risen 83 per cent over the last three years. The increases have been driven by high income growth in emerging economies (probably the single most significant factor), use of crops for biofuels, the relative inelasticity of supply, historically low stock levels and some speculative investment. More recently, national concerns over inflation and prices have led some countries to reduce exports and others to try to build up stocks – creating a feedback loop that feeds on itself to drive prices up still further. In the medium to longer term, 'scarcity trends' – climate change, the cost of energy inputs, scarcity of land and water – could limit the supply-side response. In the immediate term, the priority is to increase both the volume and the quality of humanitarian assistance available to poor people, including by moving away from in-kind food aid and towards cash transfers or voucher systems – although it is important to be clear that there are outstanding questions about how these social protection systems will work, and they should not be seen as a panacea. The issue of compensatory financing may also arise for some countries facing balanceof- payments difficulties. In the longer term, the key challenge is to increase the supply of food: the World Bank estimates that demand for food will rise by 50 per cent by 2030, as a result of rising affluence and growing world population. Achieving this challenge will require something close to a revolution, and a massive investment in agriculture in developing countries. If supply fails to keep pace with rising demand, then the question of 'fair shares' is likely to emerge as a significant global issue. Already, the effect of a burgeoning global middle class switching to diets with more meat and dairy products – both relatively inefficient in terms of grain use – has been to reduce the affordability of staple foods for poorer consumers.
Topic:
Agriculture, Economics, Environment, International Trade and Finance, World Bank, and Population

1382. China and the Future of the Developing World: The Coming Global-Asian Era and its Consequences

Author:
Jeffrey Henderson
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The rise of China as an economic and political 'driver' of the global economy is likely to be one of the defining moments of world history. Its dynamism and international expansion are on the verge of creating a 'critical disruption' in the global order that has held sway for over 60 years. As such, China is beginning to reshape the world, presaging a new phase of globalization: a 'global-Asian era'. This new era is likely to be distinct from any of the earlier phases of globalization and China's global footprint, in terms of its business, economic and political actions and their geopolitical implications, is likely to be markedly different from what has gone before. This paper offers a framework by which we can begin to understand the coming global-Asian era (GAE) and some of its consequences, particularly as the latter are surfacing in the developing world. Having discussed the nature and dynamics of the GAE, the paper turns to sketch a series of vectors (trade, aid and energy security) along which the GAE is beginning to impact on developing countries. The paper argues that, at least for these vectors, the Chinese-driven GAE is providing opportunities as well as dangers for national development projects. It concludes by briefly speculating on the viability of the GAE.
Topic:
Development, Globalization, International Political Economy, International Trade and Finance, and Oil
Political Geography:
China and Asia

1383. China in the World Economy: Dynamic Correlation Analysis of Business Cycles

Author:
Jarko Fidrmuc and Ivana Bátorová
Publication Date:
01-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We analyse the business cycles in China and in selected OECD countries between 1992 and 2006. We show that, although negative correlation dominate s for nearly all countries, we can also see large differences for various frequencies of cyclical developments. On the one hand, nearly all OE CD countries show positive correlations of the very short-run developments that may correspond to intensive supplier linkages. On the other hand, business cycle frequencies (cycles with periods between 1.5 and 8 years) are typically negative. Nevertheless, countries facing a comparably longer history of intensive trading links tend to show also slightly higher correlations of business cycles with China.
Topic:
Economics and International Trade and Finance
Political Geography:
China and Asia

1384. China's Exports in ICT and its Impact on Asian Countries

Author:
Yuqing Xing
Publication Date:
04-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper analyses China's ICT exports grow thin its two major markets Japan and the US from 1992 to 2004. It focuses on ICT products classified in SITC 75, 76 and 77. The empirical results show that Chinese exports had maintained two-digit annual growth during the period. The growth was much higher than the corresponding growth of the overall markets. By 2004, Chinese ICT exports accounted for 26 per cent of the total Japanese imports and 19 per cent of the total imports of the US in ICT products. In addition, the paper investigates whether the rapid growth of Chinese ICT exports crowded out that of other Asian countries: Indonesia, Malaysia, Philippines, Singapore, South Korea and Thailand. The empirical analysis shows that the crowding out effect differs across countries and products. The exports of Singapore and Philippines have been negatively affected by the growth of Chinese exports, but no crowding effect existed at all with Indonesia's exports.
Topic:
International Trade and Finance and Markets
Political Geography:
United States, Japan, China, Indonesia, Malaysia, Asia, South Korea, Philippines, Singapore, and Thailand

1385. Development Path of China and India and the Challenges for their Sustainable Growth

Author:
Yuefen Li and Bin Zhang
Publication Date:
04-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The segmentation of global manufacturing and services provided China and subsequently India with a golden opportunity to make full use of their absolute advantage—low cost yet educated labour—to integrate into the world economy within a comparatively shorter period of time than some earlier industrialisers. Though international trade functioned as a vent of surplus in view of the narrowness of their domestic markets at the beginning of their economic catch-up, the label of export-led model may not reflect the real picture as imports underwent dramatic increases during their respective growth periods, in particular for China. Foreign direct investment has played a pivotal role in their economic growth and has major presence in international trade and investment in leading sectors of both countries, giving rise to certain special features and weak links for their economic expansion and sustainability of fast economic growth. To maintain more broad-based, fast and balanced growth, it seems that both countries have to redress sectoral imbalances, encourage technology upgrading and cope with future changes in demographic profiles which constituted a trigger to fast economic growth at the time of their respective economic reform.
Topic:
Development and International Trade and Finance
Political Geography:
China, India, and Asia

1386. Risk and Systemic Risk

Author:
John H. Makin
Publication Date:
09-2008
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Speaking on August 22 at the Federal Reserve Bank of Kansas City's Annual Economic Symposium in Jackson Hole, Wyoming, Federal Reserve chairman Ben Bernanke entitled his important address “Reducing Systemic Risk.” Bernanke outlined three key elements of the Fed's response to what he described as “one of the most challenging economic and policy environments in memory.” First, the Fed has eased monetary policy, cutting the federal funds rate from 5.25 percent to 2 percent. Second, the Fed has expanded its liquidity support by developing new special lending facilities to mitigate “very severe strains in short-term funding markets.” The third and, as yet, unfinished element of the Fed's strategy involves “a range of activities and initiatives undertaken in our [the Fed's] role as financial regulator and supervisor.”
Topic:
Economics, International Trade and Finance, Markets, and Political Economy

1387. Germany and Globalization

Author:
Daniel S. Hamilton and Joseph P. Quinlan
Publication Date:
11-2008
Content Type:
Working Paper
Institution:
Center for Transatlantic Relations
Abstract:
Globalization is changing all of our lives as the pace of economic interdependence grows between developed and emerging countries. Debate thrives about whether globalization has been good or bad for European consumers, workers, companies and governments and what are the prospects in the future. In a dynamic and uncertain world currently beset by a global financial crisis and a looming recession can Europe act to take advantage of the opportunities created by globalization and mitigate its challenges?
Topic:
International Relations, Economics, Globalization, and International Trade and Finance
Political Geography:
Europe and Germany

1388. France and Globalization

Author:
Daniel S. Hamilton and Joseph P. Quinlan
Publication Date:
06-2008
Content Type:
Working Paper
Institution:
Center for Transatlantic Relations
Abstract:
Globalization is changing all of our lives as the pace of economic interdependence grows between developed and emerging countries. Debate thrives about whether globalization has been good or bad for European consumers, workers, companies and governments and what are the prospects in the future. In a dynamic and uncertain world can Europe act to take advantage of the opportunities created by globalization and mitigate its challenges?
Topic:
Economics, Globalization, International Trade and Finance, and Markets
Political Geography:
America, Europe, and France

1389. The Implications of China's Ascendancy for Africa

Author:
Hany Besada
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
China's spectacular economic progress has led some security analysts and policy makers in the North and the South to question Beijing's intentions in other parts of the world. This paper examines the extent to which China's engagement with Africa has produced mutual benefits for both and whether Africa is reaping the necessary benefits required for poverty alleviation and economic development. Chinese state-owned enterprises have invested billions of dollars in foreign reserves, construction, and engineering resources assisting African oil-producing exporters. While many in the west have started to question China's extraordinary level of interest in Africa – in particular, its economic engagement with perceived repressive regimes – African leaders view China's entry as a means of pulling Africa onto the path of globalization. It is thus important that African leaders and policy makers ensure that Chinese trade and investment bring reciprocal and tangible benefits for Africans, and contribute to economic stability and good governance.
Topic:
Foreign Policy, International Cooperation, International Trade and Finance, Treaties and Agreements, and International Affairs
Political Geography:
Africa and China

1390. China's Role as a Trade Bridge for Expanding Regional and World Trade

Author:
Min Gong and Wenpu Li
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
To understand China's trade relations with the US, Japan, and South Korea, we estimate a vector autoregressive model (VAR) model to investigate the trade interactions among these four countries using data from the period of the first quarter of 1993 to the fourth quarter of 2005. We find substantial Foreign Direct Investment (FDI)-induced indirect trade from Japan and Korea to the US through China, and between Japan and Korea through China. These indirect trade flows lead to increases in China's trade deficit with Japan and Korea as well as China's trade surplus with the US. The indirect trade flows through China also indicate the importance of China's role as a trade bridge. From the viewpoint of world trade growth, as a trade bridge, China contributes to the stable growth of the regional and world economies. However, China's role as a trade bridge may negatively affect its long-run economic growth.
Topic:
Globalization, International Political Economy, and International Trade and Finance
Political Geography:
United States, Japan, China, Asia, South Korea, and Korea