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Dr. Jean-Marc F. Blanchard's picture

Circling around China’s Dual Circulation Policy, part III-Implications for China’s Outward FDI

This piece complements two earlier pieces that, respectively, overviewed China’s Dual Circulation System (DSC) and pondered its implications for inward foreign direct investment (FDI) into China. It specifically focuses on the potential ramifications of the DCS for Chinese outward FDI (OFDI). Prima facie one logically might expect the DCS to moderate Chinese OFDI since its goals include inter alia enhancing China’s indigenous capabilities, insulating China from an occasionally hostile external environment, and increasing domestic consumption and production. In actuality, though, these and other DCS aims do not support the premise the DCS will result in Chinese money shunning the outside world.

Dr. Jean-Marc F. Blanchard's picture

Circling around China’s Dual Circulation Policy, part II-Implications for Inward FDI

In my December blog, I overviewed China’s Dual Circulation System (DCS). To reiterate, foreign multinational corporations (MNCs) are concerned about the DCS’s emphasis on self-sufficiency, indigenous technology, and insulating China against the international market’s vagaries. Foreign MNCs, though, also see opportunities to satiate anticipated growth in domestic demand and the needs of a presumptively wealthier population, facilitate China’s efforts to promote high-quality development through inter alia the provision of “technology-focused products and services” (as one Michelin China CEO put it), and to supply the materials needed for China’s ramped up domestic infrastructure and production.

Dr. Jean-Marc F. Blanchard's picture

Circling around China’s Dual Circulation Policy, part I-Ins and Outs

In May 2020, China’s two-track “dual circulation” strategy (DSC) came to light. An internal circulation track—the “mainstay”—encompasses domestic consumption and production. An external circulation track entails more opportunities for foreign direct investment (FDI) and efforts to expand China’s external connections.

Dr. Amitendu Palit's picture

Resilient Supply Chain Initiative (RSCI) and its Prospects

Covid-19 is refashioning relations among countries. One example is the Resilient Supply Chain Initiative (RSCI), proposed by India, Japan, and Australia, which aims to assemble a coalition of countries, ostensibly middle powers and reasonably large economies, to restructure supply chains in a way that reduces economic dependence on China.

Dr. Jean-Marc F. Blanchard's picture

Small Waves Precede Tidal Waves: American Sanctions on Chinese Companies involved in South China Sea Island Building and their Larger Ramifications

The United States (US) Department of Commerce recently blacklisted two dozen Chinese firms which it said, “played a ‘role in helping the Chinese military construct and militarize the internationally condemned artificial islands in the South China Sea.’” Companies listed included Guangzhou Haige Communications Group, China Shipbuilding Group, and China Communications Construction Co. (CCCC). The US State Department later accused CCCC and its subsidiaries of “‘corruption, predatory financing, environmental destruction and other abuses.’”

Dr. Hwy-Chang Moon's picture

More or Less Globalization? Thinking about the Real Lessons of Covid-19

Many contend the lesson of Covid-19 is the need to reduce global business activities, particularly the United States (US)’s dependence on China for imports of manufactured goods. They further assert American multinational corporations (MNCs) operating overseas, particularly in China, should return to the US, undertaking a so-called a “reshoring strategy.” The wisdom of such propositions, however, is open to debate.

Mr. Naoyuki Haraoka's picture

The Coronavirus Reveals Inconvenient Truths

The spread of international supply chains has played a key role in advancing globalization as well as enabling greater production efficiencies at multinational corporations (MNCs) because it has facilitated the division of labor. This has especially been the case where manufacturing industries, an engine of the global economic growth, such as automobiles, are concerned.

Dr. Jean-Marc F. Blanchard's picture

Dashing for the Door Due to Dealing in Data or Singapore Sling

The recent passage of the National Security Law for Hong Kong has raised all kinds of quandaries for high-technology and other companies, especially those that deal in data. This is so because the new law makes it easier for government authorities to access data, restrict the kinds of content that are published, and control the transmission of data. In the event of noncompliance with (vague and likely fluid) regulations, firms risk significant fines, imprisonment, or other sanctions. There has been a mild reaction by big firms such as Apple, Facebook, and Google, but they are not located in Hong Kong per se and their longer-term plans are unclear. Businesses actually located in Hong Kong face a serious quandary.

Dr. Jean-Marc F. Blanchard's picture

Dancing while Watching the Clock: Tik Tok’s Woes in India

ByteDance is facing up to USD $6 billion in losses from the Indian government’s decision to ban almost five dozen Chinese mobile phone apps including its Tik Tok and Helo.

Dr. Jean-Marc F. Blanchard's picture

Run Bank Run? The Deposits Foreign Financial Firms Made in China Market (Still) are Not Liabilities

How fast sentiments can change! The much vaunted opening of China’s financial sector to foreign banking, insurance, and securities firms has become a source of angst with observers now wondering if foreign financial players such as Allianz, Citigroup, JPMorgan, Nomura, and UBS will get caught up, directly or indirectly, in China-United States (US) tensions relating to geopolitics, trade, foreign direct investment (FDI), portfolio investment, Covid-19, and the changed status of Hong Kong. Potentially at risk are billions of dollars in FDI such companies have spent to acquire majority stakes in or establish securities joint ventures (JVs), build up their China insurance operations, and begin mutual fund operations.

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*Blogs represent the views of their authors and are not necessarily endorsed by the Wong MNC Center, its Board of Directors, or its Advisory Board. They are intended for the non-commercial use of readers in order to foster debate and discussion and to facilitate and stimulate research.