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Investment potential of China in global trade and economic cooperation

Author

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  • Yevhenii Redziuk

    (State Organization “Institute for Economics and Forecasting, NAS of Ukraineâ€)

Abstract

China's economic and investment potential is growing systematically and purposefully, despite modern trade and economic conflicts and disagreements, especially with its geopolitical competitor, the United States. The unique competitiveness, balance, and stability of China's economy during global transformations are not accidental. State management of investments and financial flows in this country is focused, first and foremost, on high-quality investment in the real sector of the economy. These processes are influenced by government programs and regulatory instruments, focusing them on the most effective directions of China's innovative, industrial, and infrastructure development. Thus, according to the state-private partnership model introduced in China, international capital flows are directed toward the implementation of investment projects with the highest profitability. As economic statistics show, investments in China have stable growing flows. At the same time, China has specific protectionist conditions for their development, but given the significant growing market of Chinese consumers, this substantially encourages foreign investors to invest in the Chinese economy. In foreign markets, China continues to maintain its position among the largest exporters of capital, while clearly realizing its national interests. Characterizing China's investment strategies over the recent period, one can trace increasing expansionist approaches to the investment policy started during the economic reforms since 1979, which involves the implementation of "small steps" tactics aimed at a large-scale takeover of raw material markets necessary for the further growth of the PRC's national economy. In modern global financial and economic relations, China is gradually becoming a leader in investing in various regions of the world, activating infrastructure and trade routes, and is a dominant geopolitical player in the world. In this context, Ukraine can join China's existing and promising international investment and infrastructure projects or attract investment funds for development at lower interest rates using cooperation with Chinese partners. In today's globalized world, new trade routes and value-added chains are actively forming, so Ukraine needs to integrate into these new infrastructure and trade channels. Following China's example, it is advisable to choose infrastructure projects that would later accumulate higher added value and generate export-oriented income from different regions of the world.

Suggested Citation

  • Yevhenii Redziuk, 2019. "Investment potential of China in global trade and economic cooperation," European scientific journal of Economic and Financial innovation, "European Association of Economists", vol. 1(3), pages 80-88, April.
  • Handle: RePEc:efn:journl:v:1:y:2019:i:3:p:80-88
    DOI: 10.32750/2019-0107
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    Keywords

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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