ECON 455 Lecture 24 Impact on Least Developed Countries

ECON 455 Lecture 24 Impact on Least Developed Countries -...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 1 Econ455: Economic Development in China Lecture 24: April 11 Impact on Least Developed Countries Sandra Poncet Lorch Hall. room 207 Email: [email protected] Office Hours: Mondays 16:30-18:30 & Wednesdays 10:30-12 2 Introduction Recently multiplication of the empirical analyses on the impact of the economic emergence of China on other developing countries Some accounts are characterized by hyperbole: - China as new engine of the developing world: “true friend of Africa” -Marginalization through competition, looting of resources, undermining governance and international human rights agenda… China may be at the same time an extraordinary opportunity… -Increase of China’s demand: huge domestic market to serve upward pressure on commodities prices -Emergence as donor/lender & FDI exporter: access to capital for LDCs -Source of competition: reduction of prices and market shares …. and a source of challenges/threats: -China’s demand is mainly in commodities: further specialization as reduce incentives for diversification: long run costs of dependence -Its projects may pay less attention to environmental & social impact: support to rogue states annihilates international community’s efforts
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 3 Lecture Outline Introduction I Framework of analysis A-Source of impact B-Measuring competition II-Impact of trade and FDI A-China’s offensive B-Positive outcome in the short term C-Outcome may turn negative in the long run III-Non-interference and Chinese oil diplomacy as anti- developmental? A-The no-questions asked policy B-Problems Conclusion 4 I Framework of analysis A-Source of impact 1-Trade 3 basic flows for LDCs Exports to China Imports from China Exports to Rest of World 3 important features Volume Price (Unit Value) Structure: specialization moving on the ladder Channels of impact Competition (complementarity or rivalry) -impact on production -impact on employment Vulnerability: Volatility of revenues Probability of moving up the ladder Employment opportunities Resource wars Terms of Trade and purchasing power Government Revenues: Impact on poverty however depends on inequality and accountability of gvt
Image of page 2
3 5 I Framework of analysis A-Source of impact 2-FDI 2 basic flows for LDCs Inflows from China Inflows from other countries 2 important features Crowding out effect: Inflow to China diverts FDI at the expenses of other LDCs Sector of investment for Chinese inflows: Determination of future technological upgrading There seems to be a consensus on the absence of a crowding out effect for Africa and also for Latin America Large proportion of FDI flows into China come from within Asia (driven by proximity) so would not have been to other places Much of the FDI in Africa/LAC is in search of natural resources or markets and is therefore location-specific.
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern