Titulo:
A Mercantilist Approach to the Chinese Economic Growth: Balance of Trade, GDP, and Investment
.
Sumario:
This paper studies the short-run and long-run relationships between trade, investment, and the Chinese economic growth from 1992 to 2019. A vector error correction (VEC) model was estimated in order to analyze the causal relationships among balance of trade, investment (both national and foreign), and economic growth. The results helped us to discuss the mechanisms considered within the mercantilist literature to relate a positive balance of trade and economic growth. Particularly, the estimation suggests that the causality mechanism between the variables is closer to a financial mercantilist or developmental explanation or rather than a monetarist mercantilist approach. That is, the positive effect of the commercial balance on economic gro... Ver más
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2022-03-08
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A Mercantilist Approach to the Chinese Economic Growth: Balance of Trade, GDP, and Investment Un enfoque mercantilista del crecimiento económico chino: balanza comercial, PIB e inversión This paper studies the short-run and long-run relationships between trade, investment, and the Chinese economic growth from 1992 to 2019. A vector error correction (VEC) model was estimated in order to analyze the causal relationships among balance of trade, investment (both national and foreign), and economic growth. The results helped us to discuss the mechanisms considered within the mercantilist literature to relate a positive balance of trade and economic growth. Particularly, the estimation suggests that the causality mechanism between the variables is closer to a financial mercantilist or developmental explanation or rather than a monetarist mercantilist approach. That is, the positive effect of the commercial balance on economic growth in China seems related to the increase of national investment, instead of the attraction of foreign direct investment. Este documento estudia las relaciones de corto y largo plazo entre el comercio, la inversión y el crecimiento económico chino desde 1992 hasta 2019. Se estimó un modelo de corrección de errores vectoriales (CEV) para analizar las relaciones causales entre la balanza comercial, la inversión (tanto nacional como extranjera), y el crecimiento económico. Los resultados nos ayudaron a discutir los mecanismos considerados dentro de la literatura mercantilista para relacionar una balanza comercial positiva y el crecimiento económico. La estimación sugiere un mecanismo causal entre las variables más cercana a la explicación del mercantilismo financiero o del desarrollismo frente al acercamiento del mercantilismo monetario. Esto es, el efecto positivo de la balanza comercial sobre el crecimiento económico de China parece estar relacionado con el aumento de la inversión nacional en vez de la atracción de inversión extranjera directa. Berasaluce Iza, Julen Romero Tellaeche, José Antonio Trade mercantilism economic growth China commercial balance Foreign Direct Investment Comercio mercantilismo crecimiento económico China balanza comercial Inversión Extranjera Directa 13 Núm. 13 , Año 2022 : Dossier. Understanding the Role of China as a Driver of Global Change Artículo de revista Journal article 2022-03-08T00:00:00Z 2022-03-08T00:00:00Z 2022-03-08 application/pdf Universidad de Bogotá Jorge Tadeo Lozano Razón Crítica 2500-7807 2539-5300 https://revistas.utadeo.edu.co/index.php/razoncritica/article/view/Mercantilist-Approach-Chinese-Economic-Growth-Balance-Trade-GDP-Investment 10.21789/25007807.1855 https://doi.org/10.21789/25007807.1855 eng https://creativecommons.org/licenses/by-nc-sa/4.0/ Razón Crítica - 2022 Azienman, J. & Lee, J. (2008). Financial vs. Monetary Mercantilism: Long-run View of Large International Hoarding. The World Economy, 31(5), 593-611. https://doi.org/10.1111/j.1467-9701.2008.01095.x Ben-Bassat, A. & Gottlieb, D. (1992). Optimal International Reserves and Sovereign Risk. Journal of International Economics, 33 (3-4), 345-362. https://doi.org/10.1016/0022-1996(92)90008-8 Bonatti, L. & Fracasso, A. (2013). Hoarding of international reserves in China, Mercantilism, domestic consumption and U.S. Monetary Policy. Journal of International Money and Finance, 32, 1044-1078. https://doi.org/10.1016/j.jimonfin.2012.08.007 Branstetter, L. G.& Feenstra, R. C. (2002). Trade and foreign direct investment in China: a political economy approach. Journal of International Economics, 58(2), 335-358. https://doi.org/10.1016/S0022-1996(01)00172-6 Branstetter, L. & Lardy, N. (2006). China's embrace of globalization (No. w12373). National Bureau of Economic Research. https://doi.org/10.3386/w12373 Gao, T. (2003). Ethnic Chinese networks and international investment: evidence from inward FDI in China. Journal of Asian Economics, 14(4), 611-629. https://doi.org/10.1016/S1049-0078(03)00098-8 Chang, H. J. (1999). The Economic Theory of the Developmental State. In Woo-Cumings, M. (ed.) The Developmental State. Ithaca (N.Y.): Cornell University Press. Charemza, W. W. & Deadman, D. F. (1992). New Directions in Econometric Practice. Aldershot (UK): Edward Elgar Publishing. Dash, A. K. (2005). An Econometric Estimation of the Aggregate Import Demand Function for India. International Business Research Conference, pp. 1-19. Dooley, P. M., Folkerts-Landau, D. & Garber, P. (2005). International Financial Stability. New York: Deutsche Bank. Engle, R. F. & Granger, C. W. J. (1987). Co-integration and Error Correction: Representation, Estimation, and Testing. Econometrica, 55(2), 251-276. https://doi.org/10.2307/1913236 Johansen, S. & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegrationwith applications to the demand for money. Oxford Bulleting of Economics and statistics, 52(2), 169-210. https://doi.org/10.1111/j.1468-0084.1990.mp52002003.x Lardy, N. R. (2016). China: Toward a Consumption-Driven Grwoth Path. In Y. Zhou (ed.) “Seeking Changes. The Economic Development in Contemporary China”. Beijing (China): Central Compilation and Translation Press. https://doi.org/10.1142/9789814656306_0004 Lardy, N. (2002). Integrating China into the Global Economy. Washington: Brookings Institution. Lind, J. & Press, D. G. (2018). Markets or Mercantilism? How China Secures Its Energy Supplies. International Security, 42(4), 170-204. https://doi.org/10.1162/isec_a_00310 MacKinnon, J.G., Haug, A. & Michelis, L. (1999). Numerical distribution functions of likelihood ratio tests for cointegration. Journal of Applied Econometrics, 14(5), 563-577. https://doi.org/10.1002/(SICI)1099-1255(199909/10)14:5<563::AID-JAE530>3.0.CO;2-R Osterwald-Lenum, M. (1992). A note with quantiles of the asymptotic distribution of the maximum likelihood cointegration rank test statistics. Oxford Bulleting of Economics and Statistics, 54(3), 461-472. https://doi.org/10.1111/j.1468-0084.1992.tb00013.x Pesaran, H.M. & Pesaran, B. (1997). Microfit 4.0. Oxford (UK): Oxford University Press. Prestowith, C. (2021). The World Turned Upside Down. New Haven and London: Yale University Press. Rodrik, D. (2006). What’s so special about China’s exports? China & World Economy, 14(5), 1-19. https://doi.org/10.1111/j.1749-124X.2006.00038.x Schell, O. & Shirk, S. L. (2019). Course Correction: Toward an Effective and Sustainable China Policy. Asia Society. Task Force Report, February 2019. Strub, D., Chen, R. & Driscoll, I. (2018). 2018 China Business Report. The American Chamber of Commerce in Shanghai. AmCham Shanghai and PwC. Obtained from https://www.amcham-shanghai.org/sites/default/files/2018-07/2018%20China%20Business%20Report_0.pdf Tian, Y. & Pentecost, E. J. (2010). The Changing Sources of Real Rate Fluctuations in China, 1995-2017: Twinning the Western Industrial Economies? The Chinese Economy, 52(4), 358-376. https://doi.org/10.1080/10971475.2018.1559123 UNCTAD (2021). From Recovery to Resilience: The Development Dimension. Trade and Development Report 2021. Geneva: UNCTAD. UNCTAD (2003). Capital Accumulation, Growth and Structural Change. Trade and Development Report 2033. Geneva: UNCTAD. Wang, Y. (2010). Effectiveness of Capital Controls and Sterilizations in China. China & World Economy, 18(3), 106-124. https://doi.org/10.1111/j.1749-124X.2010.01199.x Woo-Cumings, M. (1999). Introduction. In M. Woo-Cumings (ed.) The Developmental State. Ithaca (N.Y.): Cornell University Press. https://doi.org/10.7591/9781501720383 Yao, S. (2006). On economic growth, FDI and exports in China. Applied Economics, 38(3), 339-351. https://doi.org/10.1080/00036840500368730 Zhang, K. H. & Song, S. (2001). Promoting exports: the role of inward FDI in China. China Economic Review 11(4), 385-396. https://doi.org/10.1016/S1043-951X(01)00033-5 https://revistas.utadeo.edu.co/index.php/razoncritica/article/download/Mercantilist-Approach-Chinese-Economic-Growth-Balance-Trade-GDP-Investment/1864 info:eu-repo/semantics/article http://purl.org/coar/resource_type/c_6501 http://purl.org/redcol/resource_type/ARTREF info:eu-repo/semantics/publishedVersion http://purl.org/coar/version/c_970fb48d4fbd8a85 info:eu-repo/semantics/openAccess http://purl.org/coar/access_right/c_abf2 Text Publication |
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UNIVERSIDAD JORGE TADEO LOZANO |
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Colombia |
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Razón Crítica |
| title |
A Mercantilist Approach to the Chinese Economic Growth: Balance of Trade, GDP, and Investment |
| spellingShingle |
A Mercantilist Approach to the Chinese Economic Growth: Balance of Trade, GDP, and Investment Berasaluce Iza, Julen Romero Tellaeche, José Antonio Trade mercantilism economic growth China commercial balance Foreign Direct Investment Comercio mercantilismo crecimiento económico China balanza comercial Inversión Extranjera Directa |
| title_short |
A Mercantilist Approach to the Chinese Economic Growth: Balance of Trade, GDP, and Investment |
| title_full |
A Mercantilist Approach to the Chinese Economic Growth: Balance of Trade, GDP, and Investment |
| title_fullStr |
A Mercantilist Approach to the Chinese Economic Growth: Balance of Trade, GDP, and Investment |
| title_full_unstemmed |
A Mercantilist Approach to the Chinese Economic Growth: Balance of Trade, GDP, and Investment |
| title_sort |
mercantilist approach to the chinese economic growth: balance of trade, gdp, and investment |
| title_eng |
Un enfoque mercantilista del crecimiento económico chino: balanza comercial, PIB e inversión |
| description |
This paper studies the short-run and long-run relationships between trade, investment, and the Chinese economic growth from 1992 to 2019. A vector error correction (VEC) model was estimated in order to analyze the causal relationships among balance of trade, investment (both national and foreign), and economic growth. The results helped us to discuss the mechanisms considered within the mercantilist literature to relate a positive balance of trade and economic growth. Particularly, the estimation suggests that the causality mechanism between the variables is closer to a financial mercantilist or developmental explanation or rather than a monetarist mercantilist approach. That is, the positive effect of the commercial balance on economic growth in China seems related to the increase of national investment, instead of the attraction of foreign direct investment.
|
| description_eng |
Este documento estudia las relaciones de corto y largo plazo entre el comercio, la inversión y el crecimiento económico chino desde 1992 hasta 2019. Se estimó un modelo de corrección de errores vectoriales (CEV) para analizar las relaciones causales entre la balanza comercial, la inversión (tanto nacional como extranjera), y el crecimiento económico. Los resultados nos ayudaron a discutir los mecanismos considerados dentro de la literatura mercantilista para relacionar una balanza comercial positiva y el crecimiento económico. La estimación sugiere un mecanismo causal entre las variables más cercana a la explicación del mercantilismo financiero o del desarrollismo frente al acercamiento del mercantilismo monetario. Esto es, el efecto positivo de la balanza comercial sobre el crecimiento económico de China parece estar relacionado con el aumento de la inversión nacional en vez de la atracción de inversión extranjera directa.
|
| author |
Berasaluce Iza, Julen Romero Tellaeche, José Antonio |
| author_facet |
Berasaluce Iza, Julen Romero Tellaeche, José Antonio |
| topicspa_str_mv |
Trade mercantilism economic growth China commercial balance Foreign Direct Investment |
| topic |
Trade mercantilism economic growth China commercial balance Foreign Direct Investment Comercio mercantilismo crecimiento económico China balanza comercial Inversión Extranjera Directa |
| topic_facet |
Trade mercantilism economic growth China commercial balance Foreign Direct Investment Comercio mercantilismo crecimiento económico China balanza comercial Inversión Extranjera Directa |
| citationissue |
13 |
| citationedition |
Núm. 13 , Año 2022 : Dossier. Understanding the Role of China as a Driver of Global Change |
| publisher |
Universidad de Bogotá Jorge Tadeo Lozano |
| ispartofjournal |
Razón Crítica |
| source |
https://revistas.utadeo.edu.co/index.php/razoncritica/article/view/Mercantilist-Approach-Chinese-Economic-Growth-Balance-Trade-GDP-Investment |
| language |
eng |
| format |
Article |
| rights |
https://creativecommons.org/licenses/by-nc-sa/4.0/ Razón Crítica - 2022 info:eu-repo/semantics/openAccess http://purl.org/coar/access_right/c_abf2 |
| references_eng |
Azienman, J. & Lee, J. (2008). Financial vs. Monetary Mercantilism: Long-run View of Large International Hoarding. The World Economy, 31(5), 593-611. https://doi.org/10.1111/j.1467-9701.2008.01095.x Ben-Bassat, A. & Gottlieb, D. (1992). Optimal International Reserves and Sovereign Risk. Journal of International Economics, 33 (3-4), 345-362. https://doi.org/10.1016/0022-1996(92)90008-8 Bonatti, L. & Fracasso, A. (2013). Hoarding of international reserves in China, Mercantilism, domestic consumption and U.S. Monetary Policy. Journal of International Money and Finance, 32, 1044-1078. https://doi.org/10.1016/j.jimonfin.2012.08.007 Branstetter, L. G.& Feenstra, R. C. (2002). Trade and foreign direct investment in China: a political economy approach. Journal of International Economics, 58(2), 335-358. https://doi.org/10.1016/S0022-1996(01)00172-6 Branstetter, L. & Lardy, N. (2006). China's embrace of globalization (No. w12373). National Bureau of Economic Research. https://doi.org/10.3386/w12373 Gao, T. (2003). Ethnic Chinese networks and international investment: evidence from inward FDI in China. Journal of Asian Economics, 14(4), 611-629. https://doi.org/10.1016/S1049-0078(03)00098-8 Chang, H. J. (1999). The Economic Theory of the Developmental State. In Woo-Cumings, M. (ed.) The Developmental State. Ithaca (N.Y.): Cornell University Press. Charemza, W. W. & Deadman, D. F. (1992). New Directions in Econometric Practice. Aldershot (UK): Edward Elgar Publishing. Dash, A. K. (2005). An Econometric Estimation of the Aggregate Import Demand Function for India. International Business Research Conference, pp. 1-19. Dooley, P. M., Folkerts-Landau, D. & Garber, P. (2005). International Financial Stability. New York: Deutsche Bank. Engle, R. F. & Granger, C. W. J. (1987). Co-integration and Error Correction: Representation, Estimation, and Testing. Econometrica, 55(2), 251-276. https://doi.org/10.2307/1913236 Johansen, S. & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegrationwith applications to the demand for money. Oxford Bulleting of Economics and statistics, 52(2), 169-210. https://doi.org/10.1111/j.1468-0084.1990.mp52002003.x Lardy, N. R. (2016). China: Toward a Consumption-Driven Grwoth Path. In Y. Zhou (ed.) “Seeking Changes. The Economic Development in Contemporary China”. Beijing (China): Central Compilation and Translation Press. https://doi.org/10.1142/9789814656306_0004 Lardy, N. (2002). Integrating China into the Global Economy. Washington: Brookings Institution. Lind, J. & Press, D. G. (2018). Markets or Mercantilism? How China Secures Its Energy Supplies. International Security, 42(4), 170-204. https://doi.org/10.1162/isec_a_00310 MacKinnon, J.G., Haug, A. & Michelis, L. (1999). Numerical distribution functions of likelihood ratio tests for cointegration. Journal of Applied Econometrics, 14(5), 563-577. https://doi.org/10.1002/(SICI)1099-1255(199909/10)14:5<563::AID-JAE530>3.0.CO;2-R Osterwald-Lenum, M. (1992). A note with quantiles of the asymptotic distribution of the maximum likelihood cointegration rank test statistics. Oxford Bulleting of Economics and Statistics, 54(3), 461-472. https://doi.org/10.1111/j.1468-0084.1992.tb00013.x Pesaran, H.M. & Pesaran, B. (1997). Microfit 4.0. Oxford (UK): Oxford University Press. Prestowith, C. (2021). The World Turned Upside Down. New Haven and London: Yale University Press. Rodrik, D. (2006). What’s so special about China’s exports? China & World Economy, 14(5), 1-19. https://doi.org/10.1111/j.1749-124X.2006.00038.x Schell, O. & Shirk, S. L. (2019). Course Correction: Toward an Effective and Sustainable China Policy. Asia Society. Task Force Report, February 2019. Strub, D., Chen, R. & Driscoll, I. (2018). 2018 China Business Report. The American Chamber of Commerce in Shanghai. AmCham Shanghai and PwC. Obtained from https://www.amcham-shanghai.org/sites/default/files/2018-07/2018%20China%20Business%20Report_0.pdf Tian, Y. & Pentecost, E. J. (2010). The Changing Sources of Real Rate Fluctuations in China, 1995-2017: Twinning the Western Industrial Economies? The Chinese Economy, 52(4), 358-376. https://doi.org/10.1080/10971475.2018.1559123 UNCTAD (2021). From Recovery to Resilience: The Development Dimension. Trade and Development Report 2021. Geneva: UNCTAD. UNCTAD (2003). Capital Accumulation, Growth and Structural Change. Trade and Development Report 2033. Geneva: UNCTAD. Wang, Y. (2010). Effectiveness of Capital Controls and Sterilizations in China. China & World Economy, 18(3), 106-124. https://doi.org/10.1111/j.1749-124X.2010.01199.x Woo-Cumings, M. (1999). Introduction. In M. Woo-Cumings (ed.) The Developmental State. Ithaca (N.Y.): Cornell University Press. https://doi.org/10.7591/9781501720383 Yao, S. (2006). On economic growth, FDI and exports in China. Applied Economics, 38(3), 339-351. https://doi.org/10.1080/00036840500368730 Zhang, K. H. & Song, S. (2001). Promoting exports: the role of inward FDI in China. China Economic Review 11(4), 385-396. https://doi.org/10.1016/S1043-951X(01)00033-5 |
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