Publication: Foreign Capital Utilization in China : Prospects and Future Strategy
Loading...
Published
2006-01
ISSN
Date
2014-08-22
Author(s)
Editor(s)
Abstract
China has been among the world's largest recipients of foreign direct investment (FDI). Nonetheless, at the time China is moving into its eleventh five-year plan period, four issues with FDI to China are becoming increasingly recognized by policy makers: geographic concentration, excessive reliance on investment in export-oriented manufacturing, under-investment in higher-technology industries, and heavy reliance on fiscal incentives to attract FDI. This report seeks to analyze these and provide benefit from international experience in suggesting policies. In addition to this introduction, the paper includes the following chapters: external environment, FDI in China, maintaining an attractive investment climate, leveling the playing field in taxation, improving the composition of FDI, and non-FDI capital flows liberalization and risk management.
Link to Data Set
Citation
“World Bank. 2006. Foreign Capital Utilization in China : Prospects and Future Strategy. © http://hdl.handle.net/10986/19623 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Bangladesh Development Update, April 2015(Dhaka, 2015-04)This report highlights recent economic updates in Bangladesh as of April 2015. Economic growth in Bangladesh was gaining momentum in the first half of FY15. Capacity utilization improved and investments were showing some signs of recovery. This growth was also job-friendly. The 12-monthly-moving average inflation decelerated from 7.6 percent in February 2014 to 6.8 percent in February 2015. The resilience of the Bangladesh economy continues to be tested by faltering political stability, weak global markets, and structural constraints. These are inhibiting the economy s income growth as well as progress on shared prosperity. Despite the emergence of a $1.3 billion deficit in the current account in the first seven months of FY15, the surplus in the overall balance of payments has been sustained, leading to continued accumulation of official foreign exchange reserves to prevent nominal exchange rate appreciation. Reserves are at a comfortable level at over 6 months of imports of goods and services. Fiscal policy has remained consistent with macroeconomic stability. Tax revenue growth has been weaker than targeted while expenditure have also been short due as usual to an implementation shortfall. The projected recovery in global growth, particularly in the United States and the Euro Zone, and continued softness in international commodity prices, bode well for Bangladesh. The country will need to restore political stability and implement faster structural reforms to capitalize on these opportunities. The potential GDP growth rate is on a declining path due to declining labor force growth and stagnant productivity growth, as well as the rate of capital accumulation. Raising the low Female Labor Force Participation (FLFP) rate offers on opportunity to boost the economy s potential growth rate. Moving forward, the biggest challenge remains ensuring durable political stability. This is a precondition for accelerated, inclusive, and sustainable growth.Publication Food Insecurity and Conflict(World Bank, Washington, DC, 2010-08-02)This paper provides a synthetic overview of the link between food insecurity and conflict, addressing both traditional (civil and interstate war) and emerging (regime stability, violent rioting and communal conflict) threats to security and political stability. In addition, it addresses the various attempts by national governments, intergovernmental organizations, and civil society to address food insecurity and, in particular, the link with conflict. It begins with a discussion of the various effects of food insecurity for several types of conflict, and discusses the interactions among political, social, and demographic factors that may exacerbate these effects. It then discusses the capabilities of states, international markets, intergovernmental organizations, and nongovernmental organizations (NGOs) to break the link between food security and conflict by focusing on mechanisms that can shield both food consumers and producers from short-term price instability. Finally, it discusses projected trends in both food insecurity and conflict and concludes with some brief comments on policies that can build resilience in light of projections of higher and volatile food prices and a changing climate.Publication Thailand Economic Monitor, February 2014(Bangkok, 2014-02-11)The Thai economy has been recovering slowly from the global financial crisis compared to countries like Malaysia and China. Growth in 2013 is projected to be 3 percent with slower than expected performance in all components of gross domestic product (GDP) - consumption, investment, next exports, and government spending. Growth is projected to be 4.0 percent in 2014 as the global economy recovers. Exports should accelerate and may well be helped by the tapering of the United States (U.S.) quantitative easing (QE) as the baht depreciates. Taking a longer perspective, there remains visible inequality in public service delivery and human achievement outcomes. Addressing the regional disparities is important for Thailand not only from a social equity perspective, but also from a competitiveness and economic growth perspective. As the population ages, Thailand is seeking to move to a high income economy. Such a transition will require a much broader base of healthy and high skilled citizens. Suggested policy responses include: (a) rebalancing public spending regionally, (b) improving the functioning of local administration by devolving more responsibility to local levels, and (c) supporting greater accountability at the local level. This report is divided into two parts: part one presents macroeconomic developments in 2013 and 2014; and part two deals with equitable public service provision in Thailand.Publication Malawi - Country Economic Memorandum : Seizing Opportunities for Growth through Regional Integration and Trade - Summary of Main Finding and Recommendations(World Bank, 2010-01-31)Malawi needs to focus on exports to maintain and broaden its current inspiring levels of economic growth. The focus of future policy should therefore be on reforms that improve competitiveness in global and regional markets. This does not require a fundamental shift in direction, but instead a rebalancing of policy and expenditures to support an outward-oriented development framework. Until the recent global financial crisis, domestic and regional trends were promising for Malawi: rapid economic growth, strong donor support, increases in foreign direct investment, real potential to upgrade regional infrastructure, and the gradual dismantling of barriers within the region through the Common Market for Eastern and Southern Africa (COMESA) and Southern Africa Development Community (SADC) free trade areas. Despite recent global developments, this report makes the case that, for a small landlocked economy like Malawi, integration into a dynamic and more open Southern Africa region will remain a key to building prosperity and improving livelihoods.Publication Russian Economic Report, No. 26, September 2011(World Bank, Washington, DC, 2011-09-14)Russia's economic growth slowed in the second quarter of 2011 as the inventory restocking cycle waned. High oil prices have kept the external current account in surplus but capital outflows continue. Gradually improving labor market conditions and access to credit and external borrowing are supporting domestic consumption but consumer confidence and external risks are constraining a more robust growth in domestic demand. Inflation is on a downward trend because of seasonal factors. The short-term fiscal situation is favorable mainly because of high oil prices with an almost balanced budget this year. But a large non-oil deficit requires concerted medium-term fiscal adjustment to replenish fiscal buffers and to move toward long-term sustainable levels of the non-oil deficit.
Users also downloaded
Showing related downloaded files
Publication China 2030 : Building a Modern, Harmonious, and Creative High-Income Society [pre-publication version](Washington, DC: World Bank, 2012-02-27)China should complete its transition to a market economy--through enterprise, land, labor, and financial sector reforms--strengthen its private sector, open its markets to greater competition and innovation, and ensure equality of opportunity to help achieve its goal of a new structure for economic growth. These are some of the key findings of a joint research report by a team from the World Bank and the Development Research Center of China’s State Council, which lays out the case for a new development strategy for China to rebalance the role of government and market, private sector and society, to reach the goal of a high income country by 2030. This report recommends steps to deal with the risks facing China over the next 20 years, including the risk of a hard landing in the short term, as well as challenges posed by an ageing and shrinking workforce, rising inequality, environmental stresses, and external imbalances. The report lays out six strategic directions for China’s future: * Completing the transition to a market economy; * Accelerating the pace of open innovation; * Going “green” to transform environmental stresses into green growth as a driver for development; * Expanding opportunities and services such as health, education and access to jobs for all people; * Modernizing and strengthening its domestic fiscal system; * Seeking mutually beneficial relations with the world by connecting China’s structural reforms to the changing international economy.Publication Transforming the Urban Space through Transit-Oriented Development(World Bank, Washington, DC, 2017)Imagine a city that is more competitive, with higher-quality neighborhoods, lower infrastructure costs, and lower C02 emissions per unit of activity. This city has lower combined transportation and housing costs for its residents than other cities at similar levels of economic activity. Its residents can access most jobs and services easily through a combination of low-cost public transport, walking and cycling. Its core economic and population centers are resilient to natural hazards. It is able to finance improvements to public space, connectivity, and social housing by capturing value created through integrated land use and transport planning. Such a vision has never been more relevant for rapidly growing cities than it is today. Transit-oriented development (TOD) can play a major role in achieving such a vision. Based on an observation of methodologies applied in different countries, the World Bank's Community of Practice on Transit Oriented Development has developed a methodology called the 3 Value (3V) Framework, which outlines a typology to facilitate TOD implementation at the metropolitan and urban scale in various contexts. The 3V Framework equips policy and decision makers with quantified indicators to better understand the interplay between the economic vision for the city, its land use and mass transit network, and urban qualities and market vibrancy around its mass transit stations. This book provides examples of approaches taken by cities like London and New York to align their economic, land use, and transport planning to generate jobs and high value. We hope this book will help readers develop a coherent vision, policies, and strategy to leverage the value created through enhanced connectivity and accessibility and make cities even more appealing places to live, work, play and do business.Publication Growth through Innovation : An Industrial Strategy for Shanghai(World Bank, Washington, DC, 2009-04-22)In broad terms, the sources of economic growth are well understood but relatively few countries have succeeded in effectively harnessing this knowledge for policy purposes so as to sustain high rates of growth over an extended period of time (commission on growth and development 2008; Yusuf 2009a). This study argues, however, that a high growth strategy which puts technology upgrading and innovation at the center might warrant a different approach from the one currently favored. It derives from the experience of global cities such as New York and London and the empirical research on industrial performance and on innovation. This has yielded four significant findings: first, monosectoral services based economies grow slowly because they benefit less from increases in productivity and from innovation. Second, manufacturing industries producing complex capital goods, electronic equipment, and sophisticated components are more Research and Development (R&D) intensive, generate many more innovations, are more export oriented, have a solid track record of rising productivity, and having achieved competitiveness, are in a better position to sustain it because the entry barriers to these industries tend to be higher. By giving rise to dense backward and forward linkages these industries can serve as the nuclei of urban clusters and maximize employment generation. Third, industrial cities create many more jobs for a middle class and tend to have a more equal distribution of income than cities which are dominated by services. Fourth, and finally, cities with a world class tertiary education and research infrastructure linked to industry, are more resilient in the face of shocks, more innovative, and better able to reinvent themselves.Publication Two Dragon Heads : Contrasting Development Paths for Beijing and Shanghai(World Bank, 2010)In broad terms, the sources of economic growth are well understood, but relatively few countries have succeeded in effectively harnessing this knowledge for policy purposes so as to sustain high rates of growth over an extended period of time. Among the ones that have done so, China stands out. Its gross domestic product (GDP) growth rate, which averaged almost 10 percent between 1978 and 2008, is unmatched. Even more remarkable is the performance of China's three leading industrial regions: the Bohai region, the Pearl River Delta, and the Yangtze River (Changjiang) delta area. These regions have averaged growth rates well above 11 percent since 1985. Shanghai is the urban axis of the Yangtze River Delta's thriving economy; Beijing is the hinge of the Bohai region. Their performance and that of a handful of other urban regions will determine China's economic fortunes and innovativeness in the coming decades. The balance of this volume is divided into five chapters. Chapter two encapsulates the sources of China's growth and the current and future role of urban regions in China. The case for the continuing substantial presence of manufacturing industry for growth and innovation in the two urban centers is made in chapter three. Chapter four briefly examines the economic transformation of four global cities and distills stylized trends that can inform future development in Beijing and Shanghai. Chapter five describes the industrial structure of the two cities, identifies promising industrial areas, and analyzes the resource base that would underpin growth fueled by innovation. Finally, chapter six suggests how strategy could be reoriented on the basis of the lessons delineated in chapter four and the economic capabilities presented in chapter five.Publication Global Value Chains in a Postcrisis World : A Development Perspective(World Bank, 2010)The world is in the midst of a sporadic and painful recovery from the most severe economic crisis since the 1930s Great Depression. The unprecedented scale of the crisis and the speed of its transmission have revealed the interdependence of the global economy and the increasing reliance by businesses on global value chains (GVCs). These chains represent the process of ever-finer specialization and geographic fragmentation of production, with the more labor-intensive portions transferred to developing countries. As the recovery unfolds, it is time to take stock of the aftereffects and to draw lessons for the future. Have we experienced the first global crisis of the 21st century or a more structural crisis of globalization? Will global trade, demand, and production look the same as before, or have fundamental changes occurred? How have lead firms responded to the crisis? Have they changed their supply chain strategies? Who are the winners and losers of the crisis? Where are the engines of recovery? After reviewing the mechanisms underpinning the transmission of economic shocks in a world economy where trade and GVCs play increasing roles, the book assesses the impact of the crisis on global trade, production, and demand in a variety of sectors, including apparel, automobiles, electronics, commodities, and off-shore services. The book offers insights on the challenges and opportunities for developing countries, with a particular focus on entry and upgrading possibilities in GVCs postcrisis. Business strategies and related changes in GVCs are also examined, and the book offers concrete policy recommendations and suggests a number of interventions that would allow developing countries to better harness the benefits of the recovery.