Article
China’s Economy Has Peaked. Can Beijing Redefine Its Goals?
Reprinted from China Leadership Monitor, Volume 81, September 1, 2024
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ServicesFootnotes
1.
One of the primary proponents of this view is Michael Pettis, who has outlined the problems of rebalancing toward China’s consumption in The Great Rebalancing (Princeton: Princeton University Press, 2013) and Trade Wars are Class Wars (New Haven: Yale University Press, 2020), with Matthew Klein, among other publications.
2.
Scott Rozelle et al, “Moving Beyond Lewis: Employment and Wage Trends in China’s High‑ and Low‑Skilled Industries and the Emergence of an Era of Polarization,” Comparative Economic Studies vol. 62 (2020), p. 555-589.
3.
Manufacturing goods are defined following the World Bank’s definition: Commodities in SITC sections 5 (chemicals), 6 (basic manufactures), 7 (machinery and transport equipment), and 8 (miscellaneous manufactured goods), excluding division 68 (non-ferrous metals), to which we re-added the manufactured product categories within division 68. South Asia includes Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka.
4.
According to the latest release of TiVA data, OECD.
5.
We use the IMF definition of developing countries. See https://www.imf.org/en/Publications/WEO/weo-database/2023/April/groups-and-aggregates.
6.
The figures presented in this report are based on publicly disclosed investments and provide a conservative estimate of investment trends.
7.
The investment value for such large multi-year greenfield investments is estimated on a quarterly basis and covers the period from when a project breaks ground until the start of production.
8.
No deal value was disclosed for the investment by Gotion High-Tech in Inobat. The €364 million in investment recorded for Slovakia is all attributed to the Volvo EV battery plant.
9.
AESC is headquartered in Japan, but it has been majority owned by Chinese firm Envision since 2018.
10.
Investment in Germany is higher than this recorded figure. The value for Gotion High-Tech’s brownfield investment in a Bosch factory in Göttingen to produce batteries has not been disclosed, and thus could not be accounted for.
11.
Investment screening notifications submitted to the European Commission do not account for all investment screening cases conducted by EU Member States. While Article 6 of the EU’s Foreign Direct Investment (FDI) Regulation states that “Member States shall notify the Commission and the other Member States of any foreign direct investment in their territory that is undergoing screening”, Member States appear to maintain a large degree of discretion on whether to notify the Commission. For instance, in 2022 a total of 23 notifications involving China were submitted to the EU Commission, while Germany alone recorded 37 investment screening cases involving China.
12.
Bundesministerium für Wirtschaft und Klimaschutz (BMWK). “Investment Screening in Germany: Facts & Figures. All figures as per 30 January 2024” https://www.bmwk.de/Redaktion/EN/Publikationen/Aussenwirtschaft/investment-screening-in-germany-facts-figures.pdf?blob=publicationFile&v=2. Accessed: May 23, 2024.
13.
Pirelli (2023). Press Release. June 18, 2023. https://press.pirelli.com/press-release-18-june-2023/. Accessed: May 23, 2024.
14.
European Parliament (2018). Briefing EU Legislation in Progress. “EU framework for FDI screening.” January 2018. https://www.europarl.europa.eu/EPRS/EPRS-Briefing-614667-EU-framework-FDI-screening-FINAL.pdf. Accessed: May 23, 2024.
15.
JD Supra (2023). “Ireland Introduces Foreign Investment Screening Regime.” December 1, 2023. https://www.jdsupra.com/legalnews/ireland-introduces-foreign-investment-5346967/. Accessed: May 23, 2024.
16.
CIRCABC. https://circabc.europa.eu/ui/group/aac710a0-4eb3-493e-a12a-e988b442a72a/library/f5091d46-475f-45d0-9813-7d2a7537bc1f/details?download=true. Accessed: May 23, 2024.
17.
Crowell & Moring LLP. “A New European Commission Proposal on Foreign Direct Investment Screening: Towards Greater Harmonization?” https://www.crowell.com/en/insights/client-alerts/a-new-european-commission-proposal-on-foreign-direct-investment-screening-towards-greater-harmonization#:~:text=Currently%2C%2024%20out%20of%2027,into%20force%20during%20 Q2%202024. Accessed: May 23, 2024.
18.
Journal of Chinese Academy of Science Issue 3 (2024). https://mp.weixin.qq.com/s/EXCvMG67t-n tkddujGOA. Accessed: May 23, 2024.