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China and Globalization: Internationalization of Firms and Trade in Services

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  • Xavier Richet
  • Xieshu Wang

Abstract

Our contribution focuses on the transformations of the Chinese economy, on its growth trajectories, notably its internationalization, which was made possible by the adoption of an export-led growth model followed by a catch-up and export of good to higher value-added. Foreign direct investment played a decisive role in this process. Inbound capital has contributed to the development of new sectors (automotive, information technology) and new specializations. Financial resources accumulated by China, then, fueled the outflows of capital in the form of acquisitions and greenfield investments around the world, especially towards developed market economies.After recalling the phases of the transformation of the Chinese economy, the importance of Chinese outgoing FDI and their contribution to the evolution of trade in services between China and the rest of the world, the recent development of trade in services, which are heavily dependent on FDI is analyzed.

Suggested Citation

  • Xavier Richet & Xieshu Wang, 2019. "China and Globalization: Internationalization of Firms and Trade in Services," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 3-22.
    • Handle: RePEc:bas:econst:y:2019:i:2:p:3-22
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    References listed on IDEAS

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    1. Giovanni Balcet & Hua Wang & Xavier Richet, 2012. "Geely: a trajectory of catching up and asset-seeking multinational growth," Post-Print hal-02313420, HAL.
    2. Joël Ruet & Xavier Richet, 2008. "The chinese and indian automobile industry in perspective : technology appropriation, catching-up and development," Post-Print hal-00583321, HAL.
    3. Mathews, John A., 2002. "Dragon Multinational: A New Model for Global Growth," OUP Catalogue, Oxford University Press, number 9780195121469.
    4. Daniel H. Rosen & Thilo Hanemann, 2009. "China's Changing Outbound Foreign Direct Investment Profile: Drivers and Policy Implications," Policy Briefs PB09-14, Peterson Institute for International Economics.
    5. Giovanni Balcet & Hua Wang & Xavier Richet, 2012. "Geely: a trajectory of catching up and asset-seeking multinational growth," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 12(4), pages 360-375.
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    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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