Friday, 26 October 2012

China's Inward FDI and its Policy Context


My China's Inward FDI and its Policy Context has just been published on the Vale Columbia Center website.

Summary:

China remains the pre-eminent recipient of inward foreign direct investment (IFDI) among
developing countries. FDI flows to the country continued to rise even during and after the
recent global financial and economic crises, when many multinational enterprises (MNEs)
found themselves in difficulties, demonstrating the continuing popularity of China as an
investment destination. Nonetheless, other developing countries, such as Indonesia and
Vietnam, are starting to steal China’s thunder, offering themselves as cheaper alternatives.

Although FDI stock in China reached a new high of US$ 711 billion in 2011, IFDI attraction
is losing its former high priority in the Government’s arsenal of economic policies, especially
as the focus is turned ever more sharply on promoting outward investment. Now that
domestic enterprises have taken over most of the functions provided by foreign investment in
the first two decades of economic reform (i.e., the 1980s and 1990s), IFDI policies are being
concentrated on honing the investment attraction effort to bring in foreign investments
capable of filling gaps in the country’s industrial structure and helping China meet policy
goals such as environmental protection and energy conservation.

Wednesday, 10 October 2012

Open investment climates and corporate transparency


I haven't read all the documentation yet, so this post is a preliminary statement of general principle, not a detailed analysis of recent announcements in Washington D.C. regarding threats to national security posed by a specific Chinese investment project and two Chinese multinationals.

Wednesday, 3 October 2012

In memoriam Bo Xilai 波袭来回忆录


Not long before I moved to Hong Kong to work in the EIU office there in mid-1996, I was invited to a lunch with a few other economists in the City of London. If I remember correctly, this event was in the Bank of England, the only time I have been admitted to that august institution. The speaker was the Mayor of Dalian, a Mr. Bo Xilai.

Over the years, I had got used to Chinese officials making long speeches on every possible occasion. This time, however, Mr. Bo used a refreshingly different approach. "You don't want to hear me speaking. You want to eat lunch. So let's watch the video." He then clicked on a remote and a very snazzy video sprang to life on the large screen above his head. Instead of the usual zoom from a flower to a landscape accompanied by harp flourishes that was the norm for Chinese investment promotion films in those days, the opening shots were brief diagonal cross-cuts of dancing girls and flashing lights. "Dalian -  Hong Kong of the North" was the title. His business card has vanished into my vast collection, but he certainly made an impression.

From 2002 to 2010 I worked with China's Ministry of Commerce on behalf of the OECD. When Bo Xilai took over the Ministry of Commerce (recently renamed, so with the acronym MOFCOM instead of MOFTEC), I asked people in the know in Beijing what he was like. Depending on how you interpreted the information, he was a tyrant, a breath of fresh air, or both.