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From foreign trade to international investment: a new step in China’s integration with the world economy

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Abstract

China’s economic strategy is facing new challenges arising from the changes in the world economy as well as in its domestic conditions. Given the sluggish global economy and the rise of protectionist policies, China cannot expect external demand to contribute to its economic growth as much as in the past. On the domestic side, the working age population has ceased to increase and will soon diminish; rising domestic costs will force Chinese exporters to shift from price competitiveness to quality upgrading and to build new comparative advantages. An important dimension of China’s new strategy will be the expansion of its direct investment abroad. China which has already become the leading world exporter and has been up to now a major recipient of foreign direct investment is likely to turn out to be a major international investor. China has accumulated large foreign assets which mainly consist of foreign government debt securities and is now aiming at diversifying its external assets through promoting Chinese firms’ investment abroad.

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  1. CEPII, 113, rue de Grenelle, 75007, Paris, France

    Françoise Lemoine

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  1. Françoise Lemoine
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Correspondence to Françoise Lemoine.

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Lemoine, F. From foreign trade to international investment: a new step in China’s integration with the world economy. Econ Change Restruct 46, 25–43 (2013). https://doi.org/10.1007/s10644-012-9134-3

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