China's Changing Integration in the Global Economy

China has firmly installed itself as a key player in the world trade and investment arena. Not even four decades since its opening up, it has surpassed Germany and the United States to become the world’s largest exporter. Adding to this, it has recently become the world’s largest recipient of foreign direct investment (FDI) as well as the largest source of outward FDI (if Hong Kong is included). Originally, the key driver of China’s growing clout in international economy has been its export-led growth strategy. From the onset of its open-door policy in the early eighties, China has made attraction of export-oriented FDI a key element of its development path. Abundant supplies of low-cost labor and artificially cheap inputs to production, as well as an undervalued currency, contributed to China’s attraction of FDI and its comparative advantage in low-skilled exports. Decades of rapid economic growth, however, are now threatening to undermine China’s export-led growth. Rising labor costs (especially in the coastal area), tightening regulations and currency appreciation have gradually eroded China’s comparative advantage in low-skilled exports. As a consequence, China has spent significant resources trying to rebalance its economy by moving from an export-led growth strategy to a consumption-led growth model and by pushing the companies to upgrade their activities up a global value chain.

The new trends beg a serious question how China’s Great Rebalancing Act affects the country’s integration in the world economy. Is China’s growing middle class changing the type of FDI that it is able to attract? Is China’s export sector moving up the value chain and specializing in higher-skilled activities such as innovation? What explains the massive rise of Chinese outward FDI? And how does all this matter for China’s economic performance?

This special issue aims to provide insights into these questions by exploring and explaining new trends in China’s exports, FDI inflows and outflows. We welcome both theoretical and empirical contributions adopting different perspectives, and focusing on different levels of analysis and research methodologies. Particularly, we welcome empirical papers that make use of original data and that can explain their findings non-technically and for wider audiences. Possible research questions that would suit to this special issue include but are not limited to the following: What is the impact of inward FDI on investment, innovation and industrial sophistication in China? What is the impact of outward FDI on China’s economic integration and development? How do China’s shift towards services and the emergency of the middle class affect FDI flows and global economy?

The submission deadline for this special issue is 31 August 2016. Potential author(s) are encouraged to send us a proposal or abstract for pre-review by 31 May 2016 to the Managing (Guest) Editor(s) at tncr.special@gmail.com with an email subject “China CER Special”.