This Op-Ed appeared in The Diplomat in January 2022. It constitutes the third in a four-part series contemplating the consequences of RCEP. It focuses on the political implications of the Regional Comprehensive Economic Partnership (RCEP), which many assume will be an incontrovertible success for China in terms of its regional and global political standing, rule setting authority, and soft power. In line with earlier pieces in the series, this piece challenges conventional wisdom about RCEP’s effects.
From the time it began to reengage with global economic flows in the late 1970s, and especially after joining the WTO in 2001, China has steadily enmeshed itself in economic globalization (EG). It has become the world’s largest trading nation, one of the largest recipients of foreign direct investment (FDI), and a major player in the international currency regime. At first glance, it is hard to dispute that China has been anything but a beneficiary of EG given the growth, foreign exchange, jobs, technology, and tax revenues it has derived from it. Yet the reality is far more complex.
This article criticizes the literature on the drivers of China’s foreign direct investment (FDI) for ignoring the meso (industry) level. The authors rectify this lacuna by proposing an “industry-based view” of FDI, which takes into account cross-industry heterogeneity and FDI motivations.
Lauretta Rubini, Chiara Pollio, Francesca Spigarelli, and Ping Lv
This article ponders the varying economic, technical, and social conditions that might illuminate the different strengths of European regions in attracting foreign direct investment (FDI). It tries to identify whether the presence of regional differences affects the location of multinational enterprises. The authors develop an empirical model using data on Chinese brownfield investments in European regions.
There is a heated debate about the social-sustainability implications of infrastructure. We engage this debate by delving into China’s Digital Silk Road (DSR), an important component of China’s infrastructure-centric Belt and Road Initiative (BRI). Optimists and pessimists have offered strong views about the DSR’s social-sustainability implications. Unfortunately, there is a dearth of analytical tools and in-depth studies which can be used to judge their competing arguments.
This Op-Ed, published in The Diplomat, represents the second in a four-part series contemplating the consequences of RCEP. It specifically reevaluates the trade implications of the Regional Comprehensive Economic Partnership (RCEP), which most forecast will have transformative effects on trade within and without the RCEP zone.
This article explores variations in European Union (EU) member state preferences for the creation of a pan-European screening framework for foreign direct investment (FDI). The article shows that countries with higher levels of technology are more supportive of an investment screening mechanism (ISM). It also notes that country-level support for FDI screening is sector dependent.
Studies about the so-called “liability of foreignness” for multinational corporations (MNCs) have given inadequate attention to the impact of “the importance of the firm’s dependence on their parents, subsidiaries, and local resources.” Drawing upon 43 semi-structured interviews with expatriate and local managers of Chinese high-tech MNCs this article identifies six dimensions that influence the liability of foreignness: resource commitment, information flow, resource control, resource integration, local responsiveness, and flexibility of control.
This report studies the involvement of small and medium-sized enterprises (SMEs) in international trade, particularly global value chains (GVCs). It analyzes 10 Asian countries in order to determine SMEs’ participation in GVCs and identifies relevant obstacles. It further supplies advice to SMEs and governments for facilitating GVC participation. Report recommendations for SMEs include increasing technological capability and attracting foreign direct investment (FDI).