Those who study China's domestic economics tend to focus on its businesses, industries, supply chains, and energy market disruption through anecdotal case studies, which often point to impending collapse. This hardly squares with the dominant views of international relations scholarship, much of which focuses on system-level analyses and tends to predict that China will inevitably achieve ever-greater global power. It is no wonder that so many long-held assumptions about China have an air of paradox to them.
Here Chi Lo presents the first full-length study to bring systemic analyses into dialog with domestic analyses, and in so doing, to show how each can challenge or refine the assumptions of the other. Taking on key presuppositions about the resilience (or otherwise) of China's economic fundamentals, and explaining why much of the global 'common sense' about China is misinformed, this book applies evidence-based research to provide a novel picture of China's development and its place within the global economic system.
China's Global Disruption: Myths and Reality is a must-read for students and researchers in both international studies and economics, and it is of keen interest to policymakers and practitioners concerned with China's ever-evolving place within the international political economy.
Author(s): Chi Lo
Publisher: Emerald Publishing
Year: 2021
Language: English
Pages: 248
City: Bingley
Cover
China’s Global Disruption
China’s Global Disruption: Myths and Reality
Copyright
Dedication
Table of Contents
List of Abbreviations
Preface
1. China's Global Disruption: From Digital Currency to COVID-19
The Rise of a Chinese Digital Currency
Crypto-renminbi to Challenge the US Dollar
The COVID-19 Disruption
Tourism and beyond
Trade Disruption
Supply Chain Shock
China as a Demander
China as a Supplier
Changing Dynamics
Disruption to Investment
The China Disruption
The Post COVID-19 Geo-political Disruption
COVID-19 Legacy
2. The Chinese Emperor Shock
China's Anti-corruption War
The Handicap of Market Forces
No China Disruption to Luxury Demand
The New Emperor
Will Growth Fall Below 6% Soon?
Is It Simply Power-grabbing?
Problem with Multiple Policy Goals
Changing the Incentive Scheme…
… the Chinese Way
The Ultimate China Risk
3. The China–US Tech Race
The Core of the Tech Conflict
Is ‘Made in China’ That Formidable?
The Patents Myth
What About Intellectual Property Theft?
The Big Question
The Disruption Risks
The China Challenge and Its Limits
The Disruption and Opportunity Cost
4. The Sum of All Fears
The Economics-politics Marriage
How Would the Shock Unfold?
Demographic Pains – What We Know
What We Don't Know
Early Retirement and the Incentive Problem
Finding Another 200 Million Workers
Relaxing the Growth Constraints
Escaping the Middle Income Trap
The Real China Growth Story
5. China's Role in the Global Market Cycle
It Cuts Both Ways
Things Have Changed
The Capital Flight Scare
The Fuss About China's Current Account
Structural Erosion but not yet Structural Deficit
Implications
The Fear of the Commodity Market
The Cyclical Impact
Secular Impact
A Story of Relative Changes
6. The Debt Time Bomb
Debt Vulnerability – Déjà vu
The Domestic Growth Shock
The External Funding Shock
A Ticking Time Bomb…
… That Won't Detonate
The Risk Lies Somewhere Else
Not yet a Dire Problem
Bank Failures – A Turning Point for Reform?
Unregulated Growth Is Over
Local Government Debt
LGD Build-up and Risks
Debt Risk Is Still Manageable
What Matters the Most
The Household Debt Mystery
Is China's Household Debt Excessive?
The Risks
Outlook and Policy
7. The Crooked Debate of China's Debt Risk
De-leveraging Cannot Go Fast
The Partial Debt Debate
The Financial Deepening Conundrum
Mortgages not a New Debt Bomb
8. China and the Currency War
Currency Wars and Causes
Domestic Economic Woes
Debt
The Currency War Game
Prisoner's Dilemma – A Digression
The Currency War Game
China's Devaluation Choice
Risk Implications
Did China Join the Currency War After 2015?
Devaluation Will Backfire on China
Currency War Prompts Renminbi Reform
Japan Aggravating the Currency War…
… Opening a Window for Renminbi Reform
It's all About Reform
9. From Trade War to Global Disruption
From Global Imbalance…
… To Currency War
No Proof of Devaluation
The Trump Disruption
Nash Equilibrium – A Digression
Corner Solution (Winner Takes All)
Why Are We Confused?
Trump's Optimal Strategy
Relevance to China
Damage on the United States
Collateral Damage
Impact from Contagion
From Trade War to Cold War to Global Disruption
Impact on Climate Change
Disruption to Stay!
10. Renminbi Internationalisation
The Motives
A Portfolio Perspective
Fostering a New Monetary Order
The Failure of the G3 Currencies
The Role of the ‘Chinese Dream’
Internationalisations Slows Down
Speculative Demand Not Good for Internationalisation
Stuck in First Gear
Trade Is Not Enough – The Japanese Experience
Internationalisation the Japanese Way
Not a Top Policy Priority
11. The Disruptive Belt and Road Initiative
The Strategic Importance for China
It's a Sino-US Disruption
The Hype About the BRI
The Commercial Reality
The Suspicion
Abide by International Norms
The Invisible BRI
The Close Linkage with the US
An Invisible Global BRI
The Reality of ‘Debt-trap’ Finance
Risks for China
BRI Ambition Scaled Back
12. Global Disruption – The New Normal
The Geo-strategic Disruption
COVID-19 Awakes the Wolf Warrior
Inherent Global Disruption
Central Bank ‘Put’ and Moral Hazard
Unintended Consequences
The Fiscal Complication
China Offers Food for Thought
References
Index
