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Tag Archives: China

China’s investment in Africa: What the data really says, and the implications for Europe

China has clearly signalled to Europe that it does not shy away from involvement in Africa, historically Europe’s area of influence. But the nature of China’s direct investment flows to the continent will have to change if they are to prove sustainable. Chinese president Xi Jinping visited Senegal in July last year, seeking further cooperation with the previous French colonial territory. Amid a heated debate over China’s increasingly dominant role in the world, this visit – before the...

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If it wants to survive, the EU must think much more strategically

Europe needs to be far more ambitious if it is to challenge the dual hegemony of the United States and China. José Ignacio Torreblanca calls for the EU to develop its strategic autonomy through boosting its security and diplomatic authority. Europeans observe with great concern how the rivalry between the United States and China is shaping the twenty-first century, and wonder what their role in that great power game is and how to avoid getting caught up in the confrontation between these two...

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What bond markets tell about China’s economy

Macro data doesn’t provide a comprehensive picture to investors, but bond issuance data can fill in some gaps. There is no doubt that China macro data has some drawbacks and needs to be complemented. One great source of information is China’s increasingly large and liquid bond markets, both onshore and offshore. Here are some takeaways on China’s economic activity, private credit and capital flows. On economic activity, first, the massive increase in onshore bond issuance is a very good...

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China and the world trade organisation: towards a better fit

China’s participation in the WTO has been anything but smooth, as its self-proclaimed socialist market economy system has alienated its trading partners. The WTO needs to translate some of its implicit legal understanding into explicit treaty language, in order to retain its principles while accommodating China. China’s accession to the World Trade Organisation in 2001 was hailed as the natural conclusion of a long march that started with the reforms of Deng Xiaoping in the 1970s....

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Too crowded bets on “7” for USDCNY could be dangerous

The Chinese yuan has been under pressure in recent days due to the slowing economy and, more importantly, the escalating trade war with the US. While the Peoples Bank of China has never said it will safeguard the dollar-yuan exchange rate against any particular level, many analysts have treated '7' as a magic number and heated debates have begun over whether the number is unbreakable. Chinese yuan has been under pressure in recent weeks due to the double dip in recent economic data and...

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The ‘seven’ ceiling: China’s yuan in trade talks

Investors and the public have been looking at the renminbi with caution after the Trump administration threatened to increase duties on countries that intervene in the markets to devalue/undervalue their currency relative to the dollar. The fear is that China could weaponise its currency following the further increase in tariffs imposed by the United States in early May. What is the likelihood of this happening and what would be the consequences for the existing tensions with the United...

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Expect a U-shape for China’s current account

As the US aims to reduce it's bilateral trade deficit, China's current-account surplus is back in the headlines. However, in reality China’s current-account surplus has significantly dropped since the 2007-08 global financial crisis. In this opinion piece, Alicia García-Herrero discusses whether we should expect a structural deficit or a renewed surplus for China's current-account. This opinion piece was first published in Asia Times. China’s current-account surplus is back in the...

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Europe – the global centre for excellent research

This report, requested by the European Parliament's Committee on Industry, Research and Energy, analyses the EU’s potential to be a global centre of excellence for research as a driver of its future growth in a complex global S&T landscape, and how EU public resources can contribute to this. This study was prepared for the Committee on Industry, Research and Energy of the European Parliament (ITRE). Copyright remains with the European Parliament at all times. The opinions...

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India in 2024: Narendra Modi once more, but to what end?

Even with the recent economic slowdown, India still boasts Asia’s fastest growing economy in 2018. But beneath the veneer of impressive GDP expansion, uneasiness about India’s economic model clearly tempers enthusiasm. Indians are widely expected to decide to continue the country’s current economic development path under the leadership of the Bharatiya Janata Party (BJP).[1] Even with the recent economic slowdown, India still boasts Asia’s fastest growing economy in 2018. But beneath the...

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What is in store for the EU’s trade relationship with the US ?

If faced with a resurgent President Trump after the next US election, the EU will have some difficult decisions to make as it is compelled to enter a one-sided negotiation. Failure to strike a deal will imperil the world’s largest trade relationship and contribute to the progressive unravelling of the rules enshrined in the World Trade Organization – although the changes required of Europe by Trump’s demands may ultimately turn out to be in the interest of Europeans. The drama...

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