China and Japan as the world’s second and third largest economies have forged close economic ties due to their geographical proximity and market complementarity. Initially cautious, Japanese firms moved into China in a major way in the 2000s, but heightened diplomatic and security tensions since the early 2010s are now having a negative impact on Japanese foreign direct investment (FDI) in China. Making FDI a two-way flow, Chinese FDI in Japan gathered momentum in the early 2010s, but that potential is not being realized due to the sharp downturn in the political relationship. In short, there is enough evidence supporting the claim that “political coldness” is now causing “economic coolness,” at least in the direct investment arena.
Free trade agreements (FTAs) have been an important channel through which China pursued economic benefits with selected partners in selected sectors and expanded its economic relations beyond the WTO. They have also been handy tools for Beijing’s diplomatic objectives. This chapter provides an overview of China’s activities in forming FTAs, and analyzes how China’s FTA policy has changed over time since the Asian Financial Crisis. Through examples of China’s key FTAs, this chapter demonstrates how the Chinese leadership has sought to balance between national political and economic interests as well as between domestic and international interests in formulating its FTA policy. Such balancing acts have not proven easy, given China’s multiple objectives and diverse domestic interests.
Bin Sheng and Xiaosong Wang
China’s trade policy has evolved through four stages, namely “import substitution and export promotion,” “export promotion and marginal trade liberalization,” “fulfilling commitments and trade policy adjustment,” and “addressing and recovering from the Global Financial Crisis.” There is no doubt that China’s trade policy has been successful and has become a model for other emerging countries to follow. But, in the meantime, unbalanced, inconsistent, and unsustainable development factors persist in China’s foreign trade. China’s trade policy represents the equilibrium of the interactions among various interest groups. China needs a brand new design to implement the overall reform blueprint and roadmap. It should also focus more on behind-the-border measures and regulatory reforms than on border trade measures.
This chapter provides an analysis of the role China played within the G20, particularly when it was the G20 presidency for 2016 and a member of the ‘troika.’ The analysis demonstrates that China had the willingness, used its power, and took actions for the G20 to reach consensus and act collectively. Seeing the G20’s growth and revival as part of world multipolarization, China regarded its hosting the Hangzhou Summit as a rare opportunity to promote the G20, and thus was keen to contribute various resources. After having experienced nearly four decades of reform and phenomenal economic growth, China had the necessary material and idealistic power to call upon other G20 members to act together. Moreover, having gained considerable experience in multilateral institutions, global and regional, China possessed the capability to mobilize like-minded countries to work together to promote global economic growth, improve international economic governance, implement the worldwide 2030 Development Agenda, form new mechanisms for global trade promotion and investment rules, and push for the implementation of the Paris Agreement on global climate change. What China did contains all three elements of leadership, that is, will, power, and action.
Over the past decade, China has become one of the largest senders of foreign direct investment (FDI) in the world, including to the European Union (EU). Why did this rapid surge happen and how did European countries react politically to this new phenomenon, which some have presented as unprecedented and even dangerous? After surveying the recent evolution of Chinese FDI in Europe, this chapter analyzes the match between Chinese demand for European assets and European supply of assets after the outbreak of the Eurozone crisis. The last section considers the political challenges raised in Europe by the rapid and ubiquitous rise of Chinese FDI and some of the policy responses to these challenges.
Jean-Marc F. Blanchard
This chapter’s main purpose is to provide an overview of Chinese outward foreign direct investment (COFDI). In this vein, it reviews the evolution of COFDI from the late 1970s through the present and contemplates the potential implications of China’s Belt and Road Initiative. The former demonstrates that for the past 40 years COFDI has largely been about Chinese firms obtaining more of what they cannot get in China itself, that Chinese companies have repeatedly targeted the developed world, and that Beijing has played a very active role in shaping COFDI. This chapter further delves into diverse issues tied to the political economy of COFDI such as the effect of COFDI on Chinese foreign policy. Beyond this, it critically reviews the literature on COFDI, suggesting areas where improvement can occur. In toto, this chapter provides a valuable primer on COFDI for the general reader, the political economist, and international business specialists.
Junjun Liu, Qinghua Zhu and Yunting Feng
The circular economy requires green supply chain activities in order to function. The circular economy includes a broader set of practices and policies at multiple levels. Most of the work on the circular economy has occurred at a macroeconomic level,but practices at the organizational and supply chain level are important in the operationalization of the circular economy. This chapter aims to explore the intersection of the circular economy and green supply chain management. Thus, circular economy studies at the enterprise level are reviewed, and their relationship to green supply chain management. Synergies and limitations are discussed as well as future directions for study, integration and application.
The Political Economy of Sub-National Economic Development
This chapter is concerned with new regionalist city-region building through state and policy interventions such as the Northern Way. It uses the Sheffield City Region as a case study: a British city struggling with the policy discourses of city regional competitiveness. Sheffield’s occupational structure has been transformed over the past 20 years from a high paid employment economy with a plentiful supply of skilled jobs in the steel and engineering industries, to a de-industrialised economy where many of the new jobs created in the service sector tend to be low paid. The chapter shows how the creation of city regions hides qualitative micro-economic and social geographies and specifically glosses over issues such as the quality and sustainability of the employment base and inequality more broadly. The chapter suggests that city-regions reinforce, and have the potential to increase, rather than resolve, uneven development and socio-spatial inequalities.
Zsuzsa A. Ferenczy
Civil society enjoys a privileged role in Europe’s China policies. Europe has aimed at promoting China’s economic opening with civil society at the centre, stressing the advancement of both political and economic rights. Europe has developed solid instruments to ensure an inclusive approach towards civil society. This has guaranteed its power of example. Beijing has been ambiguous in its approach to civil society. It has shown relatively more openness to cooperation on economic, and much less on political rights. This has constrained Europe’s influence. Europe’s weakened power of example as a result of it dealing with its crises has further challenged its ambitions, most notably as a result of the migration crisis, questioning Europe’s claims of inclusiveness and partnership with civil society. Criticism about its ability to find solutions in partnership with civil society has increased. As a result, Europe’s normative power effectiveness has been limited.