Chinese outwards mercantilism – The art and practice of bundling

Joshua Aizenman; Yothin Jinjarak; Huanhuan Zheng

doi:10.1016/j.jimonfin.2018.03.016

Chinese outwards mercantilism – The art and practice of bundling

Joshua Aizenman, Yothin Jinjarak, Huanhuan Zheng

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

16 Citations (Scopus)

Abstract

The Global Financial Crisis (GFC) brought to the fore the limits of the Chinese export led-growth strategy and the need for Chinese rebalancing of its international business approaches. Our paper takes stock of what may be the new chapter of Chinese outward-mercantilism, which aims at securing a higher rate of returns on its net foreign asset position, leveraging its success in manufacturing exports, natural resource imports and RMB internationalization. Using micro-level project data and macroeconomic covariates, we find positive association of Chinese trade and financial flows with China's outward direct investment (ODI). The relationship is stronger for ODI originated from the Chinese state-owned enterprises, and strengthened by the provision of RMB swap-line agreements with China's trading partners. The evidences support the conjecture that Chinese ODI is bundled to trade and financial linkages with its investment and trading partners. © 2018 Elsevier Ltd

Original language	English
Pages (from-to)	31-49
Journal	Journal of International Money and Finance
Volume	86
DOIs	https://doi.org/10.1016/j.jimonfin.2018.03.016
Publication status	Published - 1 Sept 2018
Externally published	Yes

Bibliographical note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

Funding

We gratefully acknowledge useful comments from the anonymous referee, Shang-Jin Wei, conference and seminar participants at the October 2015 West Coast Workshop on International Finance and Open Economy Macroeconomics, the 14th Research Meeting of NIPFP-DEA Research Program in Rajasthan, Hong Kong Baptist University and National University of Singapore. Huanhuan Zheng gratefully acknowledges financial support from startup grant of National University of Singapore.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 9 Industry, Innovation, and Infrastructure
SDG 10 Reduced Inequalities
SDG 17 Partnerships for the Goals

Research Keywords

Bundling strategy
Central bank swap lines
Cross-border trade
Outward direct investment

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10.1016/j.jimonfin.2018.03.016

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abstract = "The Global Financial Crisis (GFC) brought to the fore the limits of the Chinese export led-growth strategy and the need for Chinese rebalancing of its international business approaches. Our paper takes stock of what may be the new chapter of Chinese outward-mercantilism, which aims at securing a higher rate of returns on its net foreign asset position, leveraging its success in manufacturing exports, natural resource imports and RMB internationalization. Using micro-level project data and macroeconomic covariates, we find positive association of Chinese trade and financial flows with China's outward direct investment (ODI). The relationship is stronger for ODI originated from the Chinese state-owned enterprises, and strengthened by the provision of RMB swap-line agreements with China's trading partners. The evidences support the conjecture that Chinese ODI is bundled to trade and financial linkages with its investment and trading partners. {\textcopyright} 2018 Elsevier Ltd",

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AU - Jinjarak, Yothin

AU - Zheng, Huanhuan

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AB - The Global Financial Crisis (GFC) brought to the fore the limits of the Chinese export led-growth strategy and the need for Chinese rebalancing of its international business approaches. Our paper takes stock of what may be the new chapter of Chinese outward-mercantilism, which aims at securing a higher rate of returns on its net foreign asset position, leveraging its success in manufacturing exports, natural resource imports and RMB internationalization. Using micro-level project data and macroeconomic covariates, we find positive association of Chinese trade and financial flows with China's outward direct investment (ODI). The relationship is stronger for ODI originated from the Chinese state-owned enterprises, and strengthened by the provision of RMB swap-line agreements with China's trading partners. The evidences support the conjecture that Chinese ODI is bundled to trade and financial linkages with its investment and trading partners. © 2018 Elsevier Ltd

KW - Bundling strategy

KW - Central bank swap lines

KW - Cross-border trade

KW - Outward direct investment

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DO - 10.1016/j.jimonfin.2018.03.016

M3 - RGC 21 - Publication in refereed journal

SN - 0261-5606

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SP - 31

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JO - Journal of International Money and Finance

JF - Journal of International Money and Finance

ER -

Chinese outwards mercantilism – The art and practice of bundling

Abstract

Bibliographical note

Funding

UN SDGs

Research Keywords

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