Analysis of current economic conditions and policy
“Foreign direct investment under uncertainty” up to 2019
A new paper in the Review of International Economics, coauthored with Caroline Jardet and Cristina Jude (both Banque de France). From the conclusion:
FDI flows have been particularly weak in the years preceding the pandemic, while traditional drivers like growth or historically low interest rates should have been supportive of a stronger dynamic. This suggests that structural factors beyond those usually found to drive FDI inflows, such as the increased economic uncertainty in the aftermath of the GFC, may have deterred FDI inflows. While there is an enormous extant literature analyzing the empirical determinants FDI, the empirical analysis of uncertainty’s impact is relatively small, partly explained by the lack of consistent cross-country measures of policy uncertainty.
In this paper, we examine the role of uncertainty in driving FDI inflows in a heterogeneous sample of advanced, emerging market and developing countries over a 25-year long pre-Covid period from 1995 to 2019. By relying on a push-pull framework, we control for both host country as well as global uncertainty. Stratifying the sample according the development levels allows us to discern effects of different strength and directions among the country groups.
We thus find that it is not host country uncertainty that seems to matter the most for FDI inflows, but rather global uncertainty. Domestic economic and political uncertainty is usually statistically insignificant for FDI inflows. These results hold despite variations in the global and host country measures of uncertainty.
For emerging countries, and in certain conditions only, host countries uncertainty seems to also have a negative effect on FDI flows, but to a lesser extent compared to global uncertainty. Domestic uncertainty does not seem to be an important driver of FDI inflows in advanced or developing economies.
We also highlight a flight-for-safety phenomenon when global uncertainty is high or persistent, thus leading foreign investors to redirect FDI to advanced countries, perceived as safe heavens.
Finally, our results suggest that higher financial openness in host countries reinforces the negative impact of global uncertainty on FDI inflows.
The results are based on a panel data set, but one key finding is illustrated by this time series plot.
Figure 1: Inward FDI as a share of GDP, ex.-financial centers, % (blue, left scale), and Global World Uncertainty Index (red, right scale). Source: JJC (Figure 3), Ahir, Bloom and Furceri.
What’s one real-world implication? In our baseline specification, from the paper:
Returning to the point estimates of the global uncertainty impact obtained, we can evaluate whether this estimate is economically large by considering a counterfactual. Using the group-specific point estimates, we can consider what FDI inflows would have been, had the level of global uncertainty from 2015 to 2019 been comparable to the one in 2014 (that is 0.18 instead of 0.41). This leads to the results shown in Figure 4.
] Note: The lines show FDI inflows as percentage of GDP as a simple average across country groups. Marker lines show the expected FDI inflows from 2015 to 2019 in advanced and emerging economies, had the global uncertainty index been comparable with the level observed in 2014.
Our estimates imply a large impact on FDI inflows, perhaps unsurprisingly because of the large postulated change in global uncertainty levels. FDI inflows rise by about 1 percentage point of GDP for emerging market economies, and by about 1.5 percentage points for advanced economies.
Our analysis extended up to 2019, just before the pandemic. Here’s a picture of global WUI and FDI inflows/GDP since then.
Figure 2: Global World Uncertainty Index (WUI) (blue, left scale), and world FDI inflows to world GDP ratio (tan, right scale). World GDP interpolated from IMF WEO (October 2022). NBER defined US peak-to-trough recession dates shaded gray. Source: worlduncertainty.com, OECD, IMF WEO October 2022 database, NBER and author’s calculations.
The 2020 spike in WUI (not in the Jardet, Jude, Chinn (2022) sample) is associated with a decline in FDI inflows to GDP (although of course income was also falling). The Q2 local peak in WUI after the expanded Russian incursion into the Ukraine is also associated with a decline in FDI inflows.
29 thoughts on ““Foreign direct investment under uncertainty” up to 2019”
Macroduck
Fascinating stuff. This, in particular, caught my eye:
“…higher financial openness in host countries reinforces the negative impact of global uncertainty on FDI inflows.”
On the surface, it’s easy to see why that would be; openness allows flexibility, which allows changes in flow. And there’s more short-tern hot money with greater openness. But the obvious reasons may not be thewhole story.
Someone more ambitious than me ought to make a serious effort at tallying up the costs and benefits of various degrees financial openness.
Bangladeshi girl “little China” aims at studying medical science in China
DHAKA — Bangladeshi fifth-grader Alifa is destined to have a special link with China after the girl was born on China’s naval hospital ship Peace Ark in 2010.
The 12-year-old, whose full name is Alifa Chin (“China” in Bengali) often called herself “little China.”
Alifa’s mother Jannatul Ferdous, has been working as an office assistant in the Bangladesh Navy. In 2010, when the hospital ship Peace Ark of the Chinese People’s Liberation Army (PLA) came to Bangladesh to provide free medical services to local people, she was eight-month pregnant.
“I was then diagnosed with a serious heart problem,” Ferdous told Xinhua recently, adding that at that time local hospitals did not have ultra modern medical facilities to deal with a critical pregnant patient like her.
“Then our doctors talked to the doctors of the Chinese hospital ship, then the doctors of Peace Ark said that they could deliver the baby safely,” she said.
“Then the doctors of our navy hospital and the doctors of the Chinese hospital ship held a board meeting and performed cesarean delivery. After the operation, both my daughter and I were healthy,” Ferdous said.
The Chinese team contributed a lot to this operation by providing good quality treatment, service and care, she added.
“Nurses and doctors were with me for three days. They looked after mother and child very well.”
“My parents never thought that I would be born on such a big ship,” Alifa told Xinhua.
The thankful parents chose a special way to express their gratitude to the Chinese side on behalf of the whole family.
“We named my baby Alifa and the commanding officer of the Chinese hospital ship named her “Chin” (“China” in Bengali). The baby girl’s full name is Alifa China,” said Ferdous.
Anwar Hossain, Alifa’s father, who is a cook, said Alifa China is taking her fifth-grade annual exam.
“I thank the Chinese doctors whose contributions made it possible for her to reach this stage today,” he said.
Alifa’s story with China does not end as the girl is so impressed by her visit to China.
“China is so beautiful. I have gone there and now I want to go again. I want to mingle with people in China, the people there are very nice. I want to study in China. I want to study and become a doctor in China,” she said.
China’s actualized FDI maintains double-digit growth from Jan to Nov, showing sustained appeal for overseas capital
China remains an attractive destination for foreign investors, with the actual use of foreign investment witnessing double-digit growth in the first 11 months of this year, highlighting the country’s sustained magnetic appeal for overseas capital despite global turbulence.
The data came as China further optimized its COVID-19 prevention and control measures and aims for an overall improvement in economic operations, and Chinese observers said there will be a further increase next year, given the support from central and local governments.
The actualized foreign direct investment (FDI) totaled $178.08 billion in the first 11 months of this year, an increase of 12.2 percent year-on-year, Shu Jueting, spokesperson of the Ministry of Commerce (MOFCOM) told a regular press conference on Friday.
Specifically, the actual use of foreign capital in high-tech industries increased by 31.1 percent year-on-year, with the high-tech manufacturing industry seeing an increase of 58.8 percent, and the high-tech service industry increasing by 23.5 percent.
“Based on last year’s high performance, this data is still in line with expectations, indicating that China’s actual use of foreign capital is still in a state of rapid growth,” Tian Yun, a veteran economist, told the Global Times on Friday, adding that the use of foreign capital in the high-tech manufacturing industry still maintained a rapid growth rate, which shows the investment structure is improving.
A breakdown of the FDI numbers revealed that South Korea’s actual investment in China soared by 122.1 percent. The amount of FDI from Germany rose by 52.6 percent, that from the UK went up 33.1 percent and the figure from Japan was 26.6 percent higher.
Measured by domestic regions, eastern China recorded a 7.7 percent increase in the actual use of FDI, per MOFCOM data, with 28.6 percent for central China and 24.6 percent for western China.
The FDI to China from Germany, South Korea, and Japan all increased by more than 20 percent, which proves that global capital is not leaving the country and that there is no “decoupling” from China, Tian added.
Chinese experts said the reason why South Korea and Germany have the fastest growth rate of investment in China is related to China’s industrial upgrading. For instance, South Korea is expanding investment in the field of electronics, especially in the field of chips, and Germany is expanding production capacity in electrical, mechanical and auto parts, which has benefited from the rise of China’s industrial production capacity….
Foreign direct investment (FDI) into the Chinese mainland, in actual use, expanded 9.9 percent year on year to nearly 1.16 trillion yuan in the first 11 months of the year, the Ministry of Commerce said Friday.
FDI reached $178 billion in U.S. dollar terms, up 12.2 percent from last year.
The service industry saw FDI inflow increase by 0.9 percent year on year to 842.61 billion yuan, while that of high-tech industries jumped by 31 percent from a year earlier, data from the ministry showed.
Specifically, FDI in high-tech manufacturing surged 58.8 percent from the same period a year ago, while that in the high-tech service sector rose 23.5 percent year on year.
During the period, investment from the Republic of Korea jumped 122 percent, Germany rose 52.6 percent, the UK climbed 33 percent, and Japan gained 26.6 percent….
baffling
many Chinese would like to take their money out of china, but are prohibited. the ccp restricts such action. nevertheless, many are still able to move money out of the country every year. why? because they do not trust the ccp government. the ccp has confiscated personal property many times over the decades. older Chinese, in particular, remember such behavior and have lost trust in the government.
Macroduck
Russia has rejected Ukraine’s offer for peace talks with conditions. Time for the next round.
So-called “Chinese debt trap” a lie: Shakeel Ahmad Ramay
A Pakistani expert said that the so-called “Chinese debt trap” rhetoric is nothing but a lie cooked up by the U.S. and some other Western countries.
Studies show developing countries mainly borrow from commercial and multilateral lenders.
According to the World Bank’s International Debt Statistics, by the end of 2020, commercial and multilateral creditors accounted for 40 percent and 34 percent respectively for the public external debt of 82 low-income and lower-middle-income countries.
Earlier this year, the UK charity “Debt Justice” published a report * citing data from the World Bank, the International Monetary Fund and other institutions, claiming that African governments owe three times more debt to Western private lenders than to China, and are charged double the interest.
Shakeel Ahmad Ramay said that the cooperation between China and other countries is mainly conducted in the form of investment, and by that China has been contributing to the development of the local economies.
Interesting data on who the Africans are borrowing from and at what interest rate. Of course government borrowing is not the only financing especially when there is a lot of FDI going on. A big issue is when an African affiliate has borrowed from its foreign parent and how high are those intercompany interest rates set.
Macroduck
“Covid-19 outbreaks put China’s supply chain in the spotlight again, as foreign firms demand ‘solutions’”
Developments in China seem to contradict Jardet and Jude’s findings, depending on how “domestic” and “global” are defined. China is, of course, a special case.
Erik Poole
Finally, our results suggest that higher financial openness in host countries reinforces the negative impact of global uncertainty on FDI inflows.
The big host country benefit of FDI are the technology transfers and spillovers. Example: Canada used FDI to build its own oil & gas industry.
So what could/should be the policy response if financial openness causes greater investment volatility (and thus greater macroeconomic volatility) for the reasons cited by the authors?
More conservative fiscal policy? Sovereign wealth funds for some?
ltr
The big host country benefit of FDI are the technology transfers and spillovers. Example: Canada used FDI to build its own oil & gas industry.
So what could/should be the policy response if financial openness causes greater investment volatility (and thus greater macroeconomic volatility) for the reasons cited by the authors?
More conservative fiscal policy? Sovereign wealth funds for some?
[ A critically important question. Excellent.
I would suggest, for developing countries “Belt and Road” participation and infrastructure investment are meant to be and indeed are an answer, A fine example would be Egypt. ]
Macroduck
You would suggest? Your a carnival barker. “Step into the tent, ladies and gentlemen! See the wonders of the dark lands here inside!”
Chinese Luban Workshop helps train Egypt’s future engineers
By Mahmoud Fouly
CAIRO — At a workshop in Ain Shams University in Egypt’s Cairo, a number of engineering students were being trained on how to use G-code, a programming language, to create an automated control of a machine.
The workshop, also known as “Luban Egypt Center for Vocational Training,” is one of the many exemplars of the education cooperation between China and Egypt.
Co-founded by China’s Tianjin Light Industry Vocational Technical College, Tianjin Transportation Technical College and Egypt’s Ain Shams University in late 2020, the spacious Workshop, covering an area of around 1,200 square meters, provided trainings for computer numerical control (CNC) installation, new energy technology and automobile application and maintenance technology.
Yomna Osama, a senior student, said that she learned a lot from the training she received at Luban Workshop on the CNC structure, components, troubleshooting and maintenance.
“We also learned G-code, a programming language that a machine understands, and I am personally using it in my graduation project,” the would-be engineer told Xinhua.
Professor Mohamad Ahmed Awad, director of the workshop, said that the educational facility gives students the chance to practically apply what they theoretically learn.
“The workshop represents a very important link between academic education and post-graduation practical work at factories,” the director told Xinhua.
The new energy training area provides students with four systems and simulations for electricity generation by wind energy, while the car maintenance training section contains physical simulators and maintenance kits for oil-fueled cars, mechanisms and maintenance systems.
“The workshop provides students with a big opportunity to be familiar with modern automotive technologies and diagnostic devices,” said Ahmed Abdel-Kader, a teacher assistant at the automotive engineering department.
“We have benefited a lot from this cooperation through having such a high-quality workshop equipped with modern automotive devices and kits we never had before,” he said, stressing that it is not only helpful for students but for professors and teachers as well.
The Luban Workshop at Ain Shams University is not the only one in Egypt. Another Luban Workshop has recently opened at the Advanced Technical School for Maintenance Technology in Cairo.
“We are so proud to have two Luban workshops in Egypt, graduating students in the fields of CNC machining and modern car maintenance,” said Mohamed Megahed, Egypt’s deputy minister of education and technical education.
“Cooperation between Egypt and China is growing in the field of education, especially technical education,” the deputy minister told Xinhua.
And — and —– are now BFFs. Funny how this goes.
And — and —– are now BFFs. Funny how this goes.
And — and —– are now BFFs. Funny how this goes.
[ Interesting to now be subject to abuse by a writer who is regularly, repeatedly abusive. Do stop.
Thank you. ]
baffling
funny coming from a commenter like you who regularly slanders others with accusations of racism, ltr. calling somebody racist in a polite manner is still abhorrent ltr. please do stop. thank you.
pgl
The really funny thing is I just skip over her CCP nonsense preferring to note the occassional contribution she might make here or there.
Moses Herzog
“Looooooooooove is a maaaaaaany splendored thing……… ” Tell the truth, have you carved you and JohnH’s names on the tree bark with a heart?? You can tell me, I can keep a secret.
pgl
Off topic but funny. It seems our favorite Trump troll (Bruce Hall) thinks the IRS is an inefficient bureaucracy but I would argue it is horribly understaffed by design as rich people love to evade taxes. So what new did we learn from Trump’s tax return?
As if Donald Trump could look any worse on social media going into the 2024 election cycle, it’s come to light that the former president has written off his settlement with Stormy Daniels. The adult film star became famous for an alleged affair she had with Trump in 2006. She was reportedly paid $130,000 in hush money to keep the affair quiet. Her lawsuit against the then-president in 2018 effectively nulled that. Twitter user @abigaildisney posted a tweet that got people’s attention about tax law and its aid to the former president.
We all knew Trump cheated on his wife with an affair with a prostitute. Heck we knew from the prostitute’s account Trump’s “manhood” is really tiny. We also knew he paid her to keep quiet (after all he did not want to know the world to no how tiny he really is). But he used this $130K as a tax deduction? And the IRS missed that? Damn!
Trade between China, other RCEP members up 7.9 pct in first 11 months
BEIJING — Trade between China and the other members of the Regional Comprehensive Economic Partnership (RCEP) has sustained rapid growth since the trade agreement took effect at the beginning of this year, according to the Ministry of Commerce (MOC).
China’s trade with the other RCEP members expanded 7.9 percent year on year to 11.8 trillion yuan (about 1.69 trillion U.S. dollars) in the first 11 months of 2022, accounting for 30.7 percent of China’s total foreign trade value, data from MOC shows.
During the period, the country’s exports to other RCEP members increased 17.7 percent from a year earlier to 6 trillion yuan, MOC spokesperson Shu Jueting told a media conference.
More efforts will be made to promote the high-quality implementation of the RCEP and other free trade agreements, make full use of such agreements, and improve their comprehensive utilization efficiency, Shu said.
The ministry will also conclude free trade agreements with more trading partners, further open China’s trade in goods, services and investment markets, and take an active part in negotiations on new rules for the digital economy and environmental protection, Shu said.
Moses Herzog
Have any of you guys seen the video of this sportscaster at WRAL, Mark Woodley standing outside in the snow?? Funniest video I’ve seen on the internet in the last week.
The really funny thing is I just skip over her CCP nonsense…
The really funny thing is I just skip over her CCP nonsense…
The really funny thing is I just skip over her CCP nonsense…
[ Evidently self-understanding is of no concern; sadly incapable of self-reflection. ]
Moses Herzog
Menzie, I’m sauced now, Are Table 3 and table 4 the total composite of uncertainty measures in the paper?? That’s the total rundown (list) of uncertainty measures in the paper??
Moses Herzog: These tables show correlations of WUI with a popular measure (Bloom Baker Davis EPU) and the VIX (for global measure). What you can see is that VIX is not correlated very well with other (global) measures. And EPU is not very well correlated with WUI (although or individual countries, there’s not a lot of EPUs).
Moses Herzog
@ Menzie
I’m still processing/digesting what you said (due to my own general slowness~~no sarcasm) Your last sentence I’m pretty sure you meant to type in parenthesis “although for individual countries, there’s not a lot of EPUs”. I’m gonna be processing this quite awhile I think, but my immediate thought is, “Can the fact many countries don’t have EPUs ‘be fixed’ ?” You don’t have to answer that, I’m just thinking “out loud” in an immediate flow of consciousness.
Thanks for answering/replying, in genuinely means alot to me.
Fascinating stuff. This, in particular, caught my eye:
“…higher financial openness in host countries reinforces the negative impact of global uncertainty on FDI inflows.”
On the surface, it’s easy to see why that would be; openness allows flexibility, which allows changes in flow. And there’s more short-tern hot money with greater openness. But the obvious reasons may not be thewhole story.
Someone more ambitious than me ought to make a serious effort at tallying up the costs and benefits of various degrees financial openness.
https://english.news.cn/20221227/62e5bb72390a4eababa020c1548907e5/c.html
December 27, 2022
Bangladeshi girl “little China” aims at studying medical science in China
DHAKA — Bangladeshi fifth-grader Alifa is destined to have a special link with China after the girl was born on China’s naval hospital ship Peace Ark in 2010.
The 12-year-old, whose full name is Alifa Chin (“China” in Bengali) often called herself “little China.”
Alifa’s mother Jannatul Ferdous, has been working as an office assistant in the Bangladesh Navy. In 2010, when the hospital ship Peace Ark of the Chinese People’s Liberation Army (PLA) came to Bangladesh to provide free medical services to local people, she was eight-month pregnant.
“I was then diagnosed with a serious heart problem,” Ferdous told Xinhua recently, adding that at that time local hospitals did not have ultra modern medical facilities to deal with a critical pregnant patient like her.
“Then our doctors talked to the doctors of the Chinese hospital ship, then the doctors of Peace Ark said that they could deliver the baby safely,” she said.
“Then the doctors of our navy hospital and the doctors of the Chinese hospital ship held a board meeting and performed cesarean delivery. After the operation, both my daughter and I were healthy,” Ferdous said.
The Chinese team contributed a lot to this operation by providing good quality treatment, service and care, she added.
“Nurses and doctors were with me for three days. They looked after mother and child very well.”
“My parents never thought that I would be born on such a big ship,” Alifa told Xinhua.
The thankful parents chose a special way to express their gratitude to the Chinese side on behalf of the whole family.
“We named my baby Alifa and the commanding officer of the Chinese hospital ship named her “Chin” (“China” in Bengali). The baby girl’s full name is Alifa China,” said Ferdous.
Anwar Hossain, Alifa’s father, who is a cook, said Alifa China is taking her fifth-grade annual exam.
“I thank the Chinese doctors whose contributions made it possible for her to reach this stage today,” he said.
Alifa’s story with China does not end as the girl is so impressed by her visit to China.
“China is so beautiful. I have gone there and now I want to go again. I want to mingle with people in China, the people there are very nice. I want to study in China. I want to study and become a doctor in China,” she said.
https://www.globaltimes.cn/page/202212/1282511.shtml
December 23, 2022
China’s actualized FDI maintains double-digit growth from Jan to Nov, showing sustained appeal for overseas capital
China remains an attractive destination for foreign investors, with the actual use of foreign investment witnessing double-digit growth in the first 11 months of this year, highlighting the country’s sustained magnetic appeal for overseas capital despite global turbulence.
The data came as China further optimized its COVID-19 prevention and control measures and aims for an overall improvement in economic operations, and Chinese observers said there will be a further increase next year, given the support from central and local governments.
The actualized foreign direct investment (FDI) totaled $178.08 billion in the first 11 months of this year, an increase of 12.2 percent year-on-year, Shu Jueting, spokesperson of the Ministry of Commerce (MOFCOM) told a regular press conference on Friday.
Specifically, the actual use of foreign capital in high-tech industries increased by 31.1 percent year-on-year, with the high-tech manufacturing industry seeing an increase of 58.8 percent, and the high-tech service industry increasing by 23.5 percent.
“Based on last year’s high performance, this data is still in line with expectations, indicating that China’s actual use of foreign capital is still in a state of rapid growth,” Tian Yun, a veteran economist, told the Global Times on Friday, adding that the use of foreign capital in the high-tech manufacturing industry still maintained a rapid growth rate, which shows the investment structure is improving.
A breakdown of the FDI numbers revealed that South Korea’s actual investment in China soared by 122.1 percent. The amount of FDI from Germany rose by 52.6 percent, that from the UK went up 33.1 percent and the figure from Japan was 26.6 percent higher.
Measured by domestic regions, eastern China recorded a 7.7 percent increase in the actual use of FDI, per MOFCOM data, with 28.6 percent for central China and 24.6 percent for western China.
The FDI to China from Germany, South Korea, and Japan all increased by more than 20 percent, which proves that global capital is not leaving the country and that there is no “decoupling” from China, Tian added.
Chinese experts said the reason why South Korea and Germany have the fastest growth rate of investment in China is related to China’s industrial upgrading. For instance, South Korea is expanding investment in the field of electronics, especially in the field of chips, and Germany is expanding production capacity in electrical, mechanical and auto parts, which has benefited from the rise of China’s industrial production capacity….
https://www.imf.org/en/Publications/WEO/weo-database/2022/October/weo-report?c=924,134,534,158,111,&s=NID_NGDP,NGSD_NGDP,&sy=2007&ey=2022&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1
October 15, 2022
Total Investment & Gross National Savings as a Percent of GDP for China, Germany, India, Japan and United States, 2007-2022
2021
China
Total Investment ( 42.6)
Gross National Savings ( 44.4)
Germany
Total Investment ( 23.3)
Gross National Savings ( 30.6)
India
Total Investment ( 31.2)
Gross National Savings ( 30.0)
Japan
Total Investment ( 25.2)
Gross National Savings ( 28.1)
United States
Total Investment ( 21.4)
Gross National Savings ( 20.1)
2022
China
Total Investment ( 44.8)
Gross National Savings ( 46.4)
Germany
Total Investment ( 22.7)
Gross National Savings ( 26.9)
India
Total Investment ( 32.8)
Gross National Savings ( 29.3)
Japan
Total Investment ( 25.7)
Gross National Savings ( 27.0)
United States
Total Investment ( 22.0)
Gross National Savings ( 21.1)
https://news.cgtn.com/news/2022-12-23/China-s-FDI-inflow-9-9-up-in-first-11-months-1fZV1AL0aUo/index.html
December 23, 2022
China’s FDI up 9.9% in first 11 months
Foreign direct investment (FDI) into the Chinese mainland, in actual use, expanded 9.9 percent year on year to nearly 1.16 trillion yuan in the first 11 months of the year, the Ministry of Commerce said Friday.
FDI reached $178 billion in U.S. dollar terms, up 12.2 percent from last year.
The service industry saw FDI inflow increase by 0.9 percent year on year to 842.61 billion yuan, while that of high-tech industries jumped by 31 percent from a year earlier, data from the ministry showed.
Specifically, FDI in high-tech manufacturing surged 58.8 percent from the same period a year ago, while that in the high-tech service sector rose 23.5 percent year on year.
During the period, investment from the Republic of Korea jumped 122 percent, Germany rose 52.6 percent, the UK climbed 33 percent, and Japan gained 26.6 percent….
many Chinese would like to take their money out of china, but are prohibited. the ccp restricts such action. nevertheless, many are still able to move money out of the country every year. why? because they do not trust the ccp government. the ccp has confiscated personal property many times over the decades. older Chinese, in particular, remember such behavior and have lost trust in the government.
Russia has rejected Ukraine’s offer for peace talks with conditions. Time for the next round.
https://english.news.cn/20221228/64a156f2277e41e7a6af479f56167f5a/c.html
December 28, 2022
So-called “Chinese debt trap” a lie: Shakeel Ahmad Ramay
A Pakistani expert said that the so-called “Chinese debt trap” rhetoric is nothing but a lie cooked up by the U.S. and some other Western countries.
Studies show developing countries mainly borrow from commercial and multilateral lenders.
According to the World Bank’s International Debt Statistics, by the end of 2020, commercial and multilateral creditors accounted for 40 percent and 34 percent respectively for the public external debt of 82 low-income and lower-middle-income countries.
Earlier this year, the UK charity “Debt Justice” published a report * citing data from the World Bank, the International Monetary Fund and other institutions, claiming that African governments owe three times more debt to Western private lenders than to China, and are charged double the interest.
Shakeel Ahmad Ramay said that the cooperation between China and other countries is mainly conducted in the form of investment, and by that China has been contributing to the development of the local economies.
* https://debtjustice.org.uk/press-release/african-governments-owe-three-times-more-debt-to-private-lenders-than-china
another link from the ccp propaganda site news.cn
https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/
Someone else who is disputing this so called Chinese debt trap which was coined by none other than Mike Pence.
https://debtjustice.org.uk/wp-content/uploads/2022/07/Who-African-governments-debt-is-owed-to_Media-Briefing_07.22.pdf
Interesting data on who the Africans are borrowing from and at what interest rate. Of course government borrowing is not the only financing especially when there is a lot of FDI going on. A big issue is when an African affiliate has borrowed from its foreign parent and how high are those intercompany interest rates set.
“Covid-19 outbreaks put China’s supply chain in the spotlight again, as foreign firms demand ‘solutions’”
https://www.scmp.com/economy/china-economy/article/3204694/covid-19-outbreaks-put-chinas-supply-chain-spotlight-again-foreign-firms-demand-solutions?module=perpetual_scroll_0&pgtype=article&campaign=3204694
Developments in China seem to contradict Jardet and Jude’s findings, depending on how “domestic” and “global” are defined. China is, of course, a special case.
Finally, our results suggest that higher financial openness in host countries reinforces the negative impact of global uncertainty on FDI inflows.
The big host country benefit of FDI are the technology transfers and spillovers. Example: Canada used FDI to build its own oil & gas industry.
So what could/should be the policy response if financial openness causes greater investment volatility (and thus greater macroeconomic volatility) for the reasons cited by the authors?
More conservative fiscal policy? Sovereign wealth funds for some?
The big host country benefit of FDI are the technology transfers and spillovers. Example: Canada used FDI to build its own oil & gas industry.
So what could/should be the policy response if financial openness causes greater investment volatility (and thus greater macroeconomic volatility) for the reasons cited by the authors?
More conservative fiscal policy? Sovereign wealth funds for some?
[ A critically important question. Excellent.
I would suggest, for developing countries “Belt and Road” participation and infrastructure investment are meant to be and indeed are an answer, A fine example would be Egypt. ]
You would suggest? Your a carnival barker. “Step into the tent, ladies and gentlemen! See the wonders of the dark lands here inside!”
You aren’t even subtle about it.
https://english.news.cn/20221228/ec917a4042d94ae5bdd244cfcd076823/c.html
December 28, 2022
Chinese Luban Workshop helps train Egypt’s future engineers
By Mahmoud Fouly
CAIRO — At a workshop in Ain Shams University in Egypt’s Cairo, a number of engineering students were being trained on how to use G-code, a programming language, to create an automated control of a machine.
The workshop, also known as “Luban Egypt Center for Vocational Training,” is one of the many exemplars of the education cooperation between China and Egypt.
Co-founded by China’s Tianjin Light Industry Vocational Technical College, Tianjin Transportation Technical College and Egypt’s Ain Shams University in late 2020, the spacious Workshop, covering an area of around 1,200 square meters, provided trainings for computer numerical control (CNC) installation, new energy technology and automobile application and maintenance technology.
Yomna Osama, a senior student, said that she learned a lot from the training she received at Luban Workshop on the CNC structure, components, troubleshooting and maintenance.
“We also learned G-code, a programming language that a machine understands, and I am personally using it in my graduation project,” the would-be engineer told Xinhua.
Professor Mohamad Ahmed Awad, director of the workshop, said that the educational facility gives students the chance to practically apply what they theoretically learn.
“The workshop represents a very important link between academic education and post-graduation practical work at factories,” the director told Xinhua.
The new energy training area provides students with four systems and simulations for electricity generation by wind energy, while the car maintenance training section contains physical simulators and maintenance kits for oil-fueled cars, mechanisms and maintenance systems.
“The workshop provides students with a big opportunity to be familiar with modern automotive technologies and diagnostic devices,” said Ahmed Abdel-Kader, a teacher assistant at the automotive engineering department.
“We have benefited a lot from this cooperation through having such a high-quality workshop equipped with modern automotive devices and kits we never had before,” he said, stressing that it is not only helpful for students but for professors and teachers as well.
The Luban Workshop at Ain Shams University is not the only one in Egypt. Another Luban Workshop has recently opened at the Advanced Technical School for Maintenance Technology in Cairo.
“We are so proud to have two Luban workshops in Egypt, graduating students in the fields of CNC machining and modern car maintenance,” said Mohamed Megahed, Egypt’s deputy minister of education and technical education.
“Cooperation between Egypt and China is growing in the field of education, especially technical education,” the deputy minister told Xinhua.
https://econbrowser.com/archives/2022/12/china-saber-rattles-again#comment-291824
December 28, 2022
And — and —– are now BFFs. Funny how this goes.
And — and —– are now BFFs. Funny how this goes.
And — and —– are now BFFs. Funny how this goes.
[ Interesting to now be subject to abuse by a writer who is regularly, repeatedly abusive. Do stop.
Thank you. ]
funny coming from a commenter like you who regularly slanders others with accusations of racism, ltr. calling somebody racist in a polite manner is still abhorrent ltr. please do stop. thank you.
The really funny thing is I just skip over her CCP nonsense preferring to note the occassional contribution she might make here or there.
“Looooooooooove is a maaaaaaany splendored thing……… ” Tell the truth, have you carved you and JohnH’s names on the tree bark with a heart?? You can tell me, I can keep a secret.
Off topic but funny. It seems our favorite Trump troll (Bruce Hall) thinks the IRS is an inefficient bureaucracy but I would argue it is horribly understaffed by design as rich people love to evade taxes. So what new did we learn from Trump’s tax return?
https://wealthofgeeks.com/trump-tax-write-off/
As if Donald Trump could look any worse on social media going into the 2024 election cycle, it’s come to light that the former president has written off his settlement with Stormy Daniels. The adult film star became famous for an alleged affair she had with Trump in 2006. She was reportedly paid $130,000 in hush money to keep the affair quiet. Her lawsuit against the then-president in 2018 effectively nulled that. Twitter user @abigaildisney posted a tweet that got people’s attention about tax law and its aid to the former president.
We all knew Trump cheated on his wife with an affair with a prostitute. Heck we knew from the prostitute’s account Trump’s “manhood” is really tiny. We also knew he paid her to keep quiet (after all he did not want to know the world to no how tiny he really is). But he used this $130K as a tax deduction? And the IRS missed that? Damn!
https://english.news.cn/20221229/870577628cc54309b57300108c84a85d/c.html
December 29, 2022
Trade between China, other RCEP members up 7.9 pct in first 11 months
BEIJING — Trade between China and the other members of the Regional Comprehensive Economic Partnership (RCEP) has sustained rapid growth since the trade agreement took effect at the beginning of this year, according to the Ministry of Commerce (MOC).
China’s trade with the other RCEP members expanded 7.9 percent year on year to 11.8 trillion yuan (about 1.69 trillion U.S. dollars) in the first 11 months of 2022, accounting for 30.7 percent of China’s total foreign trade value, data from MOC shows.
During the period, the country’s exports to other RCEP members increased 17.7 percent from a year earlier to 6 trillion yuan, MOC spokesperson Shu Jueting told a media conference.
More efforts will be made to promote the high-quality implementation of the RCEP and other free trade agreements, make full use of such agreements, and improve their comprehensive utilization efficiency, Shu said.
The ministry will also conclude free trade agreements with more trading partners, further open China’s trade in goods, services and investment markets, and take an active part in negotiations on new rules for the digital economy and environmental protection, Shu said.
Have any of you guys seen the video of this sportscaster at WRAL, Mark Woodley standing outside in the snow?? Funniest video I’ve seen on the internet in the last week.
https://twitter.com/MarkWoodleyTV/status/1605961457337712640
This guy is funny when he is cranky!
The really funny thing is I just skip over her CCP nonsense…
The really funny thing is I just skip over her CCP nonsense…
The really funny thing is I just skip over her CCP nonsense…
[ Evidently self-understanding is of no concern; sadly incapable of self-reflection. ]
Menzie, I’m sauced now, Are Table 3 and table 4 the total composite of uncertainty measures in the paper?? That’s the total rundown (list) of uncertainty measures in the paper??
Moses Herzog: These tables show correlations of WUI with a popular measure (Bloom Baker Davis EPU) and the VIX (for global measure). What you can see is that VIX is not correlated very well with other (global) measures. And EPU is not very well correlated with WUI (although or individual countries, there’s not a lot of EPUs).
@ Menzie
I’m still processing/digesting what you said (due to my own general slowness~~no sarcasm) Your last sentence I’m pretty sure you meant to type in parenthesis “although for individual countries, there’s not a lot of EPUs”. I’m gonna be processing this quite awhile I think, but my immediate thought is, “Can the fact many countries don’t have EPUs ‘be fixed’ ?” You don’t have to answer that, I’m just thinking “out loud” in an immediate flow of consciousness.
Thanks for answering/replying, in genuinely means alot to me.
Moses Herzog: I think there are only EPUs for 16 countries or so. WUI based on Economist Intelligence Unit reports spans over a 100 countries.