Chinese Economy and Central Asia

Bayari, Celal (2015): Chinese Economy and Central Asia. Published in: A. T. Business Management Review , Vol. 11, No. 3 (3 December 2015): pp. 1-14.

Abstract

Chinese economic growth has accompanied the rise and development of the Chinese economic model with its own types of multinational enterprises, and state-owned enterprises. Major stock market plunges in 2015 have taken away the focus from the model and the manufacturing base that upholds it. Analyses of the system of the Chinese state, its enterprises and the private sector need to continue to understand the future of this economy and its implications for the rest of the world. Central Asian energy markets, which China has entered a decade ago, are important in this context, as their future behaviour will have consequences for the EU, North American and Australian markets. The Chinese state is the owner of the largest banks and sovereign wealth funds in the world. When China lost its energy independence in 1993, it began to rely on Central Asian energy markets and increasingly placed more emphasis on the region as a hub for its economic expansion, and as a strategic location and export market. The region, neighboring Xinjiang Uyghur Autonomous Region, is one of the foci of organizations such as the Shanghai Cooperation Organisation (SCO), and projects such as the Silk Road Economic Belt (SREB). Chinese trade and foreign direct investment (FDI) in the region involve plans to build economic and other links from Xinjiang Uyghur Autonomous Region across Central Asia. This paper argues that Central Asia faces some challenges due to its landlocked status, and industrial structure and markets, despite its energy and mineral resources, some of which is yet to be developed.

• Item Type: MPRA Paper
• Language: English
• Keywords: China, Central Asia, natural gas, crude oil, trade and FDI
• Subjects: F - International Economics > F1 - Trade; F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F19 - Other; F - International Economics > F5 - International Relations, National Security, and International Political Economy; F - International Economics > F5 - International Relations, National Security, and International Political Economy > F50 - General; P - Economic Systems > P5 - Comparative Economic Systems; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q32 - Exhaustible Resources and Economic Development; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q35 - Hydrocarbon Resources; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q37 - Issues in International Trade; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q40 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q47 - Energy Forecasting; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy

References

Abad, Gracia, The Beijing Consensus in the Shadow of the Global Financial Crisis. UNISCI Discussion Papers, (no. 24 2010).

Acemoglu, Daron and James A. Robinson, “State Capitalism Winning?” The Clash of Capitalisms, 31 December (2012).

Aliber, Robert, “A Theory of Direct Foreign Investment,” pp. 127-140 in John H. Dunning (ed), The Theory of Transnational Corporations, London: Routledge, 1993.

Alon, Titan and Galina Hale and Joao Santos, “What is China’s Capital Seeking in a Global Environment?” FRBSF Economic Letter, 22 March (2010).

Athreye, Suma and Sandeep Kapur, “Introduction: The internalization of Chinese and Indian firms-trends, motivations and strategy.” Industrial and Corporate Change, vol. 18, no. 2 (2009), pp. 209-221.

Barcena, Alicia, Antonio Prado, Osvaldo Rosales, and Ricardo Pérez. People’s Republic of China and Latin America and the Caribbean. Economic Commission for Latin America and the Caribbean, Santiago: United Nations, 2011.

Bayari, Celal. “Australian Trade and FDI Relations with Japan: Reflecting on the Past Seven Decades.” International Language and Culture, no. 16 (2012a), pp. 145-188.

Bayari, Celal. Australian Economy and Neo-Liberalism: Manufacturing, Trade and Bilateral Links with Japan in the Post-Keynesian Age. Zurich: LIT Verlag, 2012b.

Blank, Stephen. “Russian Policy and Central Asian Energy, Economics and Security.” Demokratizatsiya, (1995), pp. 187-208.

Bradsher, Keith. Chinese Interests Look to Malaysia.” (19 November 2014), The New York Times, p.1.

British Petroleum. BP Statistical Review of World Energy. Natural Gas. June 2014a.

British Petroleum. BP Statistical Review of World Energy. Oil. June 2014b.

Büge, Max, Matias Egeland, Przemyslaw Kowalski, Monika Sztajerowska. “State owned enterprises in the global economy: Reason for concern?” VOX CEPR's Policy Portal, 2 May (2013).

Çagatay, Ergün (ed). The Turkic Speaking World. 2000 Years of Art and Culture from Inner Asia to the Balkans. Munich: Prestel Verlag, 2006.

Chari, Anusha and Nandini Gupta. “Incumbents and Protectionism: The Political Economy of Foreign Entry Liberalization.” Journal of Financial Economics, vol. 88 (2008), pp. 633-656.

Chen, James. “The Emergence of China in the Middle East.” Strategic Forum, (December 2011).

Cheung, Yin-Wong and Xing Wang Qian. “Empirics of China’s Outward Direct Investment.” Pacific Economic Review, vol. 14, no.3 (2009), pp. 312-341.

Clarke, Michael. “China’s Integration of Xinjiang with Central Asia: Securing a “Silk Road” to Great Power Status?” China and Eurasia Forum Quarterly, vol. 6, no. 2 (2008), pp. 89-111.

Clarke, Michael. “China's Strategy in “Greater Central Asia”: Is Afghanistan the Missing Link.” Asian Affairs: An American Review, vol. 40, no.1 (2013), pp. 1-19.

Coburn, Leonard L. “Russian Oil. A Long Term View.” International Association for Energy Economics, (Third Quarter 2010a), pp. 23-24.

Coburn, Leonard L. “Central Asia: Pipelines Are the New Silk Road.” International Association for Energy Economics, (Fourth Quarter, 2010b), pp. 19-21.

Cornell, Svante E. and Michael Jonsson. “The Nexus of Crime and Conflict,” pp. 1-22 in Cornell, Svante E. and Michael Jonsson (eds) The Political Economy of Conflict in Eurasia Organized Crime and Armed Conflict in the Postcommunist World. Philadelphia: University of Pennsylvania Press, 2014.

Cumings, Bruce. “Japan and Northeast Asia in the Twenty-first Century,’ pp. 136-168 in Peter J. Katzenstein and Takashi Shiraishi (eds) Network Power, Japan and Asia. Ithaca and London: Cornell University Press, 1997.

Dalton, Matthew. “EU Finds China Gives Aid to Huawei, ZTE.” The Wall Street Journal, (3 February 2011).

Dirlik, Arif. “Beijing Consensus: Beijing "Gongshi." Who Recognizes Whom and to What End?” University of Oregon Position Paper, 2006.

Dirlik, Arif and Roxann Prazniak. “Social Justice, Democracy and the Politics of Development: The People’s Republic of China in Global Perspective.” International Journal of China Studies, vol. 3, no.3 (2012), pp. 285-313.

Du, Ruoxi. Central Asian Energy: A Point of Contention or Collaboration in Russia China Relations. The Foreign Military Studies Office and The Center for Russian, East European & Eurasian Studies: The University of Kansas, 2011.

Dunning, John. H. Explaining International Production. London: Unwin Hyman, 1988.

Dunning, John H. The Globalization of Business. London: Routledge, 1993.

Dunning, John H. “Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism.” Journal of International Business Studies, Third Quarter (1995), pp. 461: 491. Dunning, John H. Alliance Capitalism and Global Business. London: Routledge, 1997.

Dunning, John H. “Transnational corporations: an overview of relations with national governments.” New Political Economy, vol. 3 (1998), pp. 280-284.

Dunning, John H. “The eclectic paradigm as an envelope for economic and business theories of MNEs activity.” International Business Review, vol. 9 (2000), pp. 163-190.

Dunning, John H. “Towards a new paradigm of development: implications for the determinant of international business.” Transnational Corporations, vol. 15, no. 1 (2006), pp. 173-227.

Dunning, John H., Kim Chang-Su and Jyh-Der Lin. “Incorporating trade into the investment development path.” Oxford Development Studies, vol. 29, no.2 (2001), pp. 45-54.

Dunning, John H., C. Kim and D. Park. “Old Wine in New Bottles.” Oxford University SLPTMD Working Paper Series. no. 11 (2008), pp. 1-33.

Dunning, John. H. and Sarianna M. Lundan. Multinational Enterprises and the Global Economy. Cheltenham: Edward Elgar, 2008.

Energy Information Administration. China. (Washington DC: February 2014a).

Energy Information Administration. Turkmenistan. July. (Washington DC: July 2014b).

Energy Information Administration. Uzbekistan. (Washington DC: January 2012).

Feddersen, Gustavo H. and Giovana E. Zuccatto, “Infrastructure in Central Asia. Energy and Transportation Controversies,” UFRGS United Nations Journal, vol. 1 (2013), pp. 159-181.

Feigenbaum, Evan A. “Central Asian Contingencies,” pp. 60-70 in Paul B. Stares, Scott A. Snyder, Joshua Kurlantzick, Daniel Markey, and Evan A. Feigenbaum. Managing Instability on China’s Periphery (New York: Council on Foreign Relations, 2011).

Frye, Richard Nelson. The Heritage of Central Asia from Antiquity to the Turkish Expansion. Princeton: Marcus Wiener Publishers, 1996.

Goh, Brenda. “After building China's railways, giant CRCC flexes muscles abroad.” Reuters, 4 December 2014.

Gorman, Siobhan. “China Firms Under Fire Lawmakers Press Huawei, ZTE Amid Probe About Possible Threats to Security.” The Wall Street Journal, (12 June 2012).

Gowa, Joanne. “Rational hegemons, excludable goods, and small groups.” World Politics, vol. 41, no. 3, 1989, pp. 307-324.

Grieco, Joseph. “Understanding the Problem of International Cooperation: The Limits of Neoliberal Institutionalism, and the Future of Realist Theory,” pp. 301-338 in David A. Baldwin (ed) Neorealism and Neoliberalism, New York: Columbia University Press, 1993.

Haley, Usha C. V. and George T. Haley. Subsidies to Chinese Industry: State Capitalism, Business Strategy, and Trade Policy. Oxford: Oxford University Press, 2013.

Hawes, Colin. The Chinese Transformation of Corporate Culture. London: Routledge, 2012.

Hsu, S. Philip, Yu-shan Wu, and Suisheng Zhao. In Search of China's Development Model: Beyond the Beijing Consensus. London: Routledge, 2011.

Ikenberry, G, John, David A. Lake and Michael Mastanduno. “Introduction: approaches to explaining American foreign economic policy’ International Organisation, vol. 42, no.1 (1988), pp. 1-14.

IMF. World Economic Outlook. Legacies, Clouds, Uncertainties. Washington DC, October 2014a.

IMF. Regional Economic Outlook. Middle East and Central Asia. Washington DC, October 2014b.

Keohane, Robert O. After Hegemony: Cooperation and Discord in the World Political Economy. Princeton; NJ: Princeton University Press, 1984.

Kierzkowski, Henry and Lurong Chen. “Outsourcing and Trade Imbalances: The United States-China Case.” Pacific Economic Review, vol. 15, no. 1(2010), pp. 56-70.

Kim, Alexander. “Political Scandal in Uzbekistan Harms Investment Climate.” Eurasia Daily Monitor Volume, vol. 11, no. 21 (February 3 2014).

Kindleberger, Charles P. The World in Depression. Berkeley: University of California Press, 1973.

Kojima, Kiyoshi. “Macroeconomic versus international business approach to foreign direct investment.” Hitotsubashi Journal of Economics, vol. 23 (1982), pp. 1-19.

Krasner, Stephen D. “Global Communications and National Power: Life on the Pareto Frontier.” World Politics, vol. 43 (1991), pp. 336-366.

Lake, David A. Power, Protection, and Free Trade. Ithaca: Cornell University Press, 1988. Lelyveld, Michael. “Russia-China Rivalry in Energy-Rich Central Asia Denied.” Radio Free Asia, (30 September 2013).

Mariani, Bernardo. China’s Role and Interests in Central Asia. (London: Saferworld, 2013), p. 10.

Mathews, John A. “Energizing industrial development.” Transnational Corporations, vol. 17, no. 3 (2008), pp. 59-83.

McGregor, Richard. The Party. New York: Harper Perennial, 2012.

McKeown, Timothy. “Hegemonic stability theory and the 19th century tariffs in Europe.” International Organization, vol. 37, no.1 (1983), pp. 73-91.

McMillan, Ann. “Effects of interdependency in the Xinjiang-Central Asian region.” Griffith University, Mimeo, 2004, pp. 1-11.

Montlake, Simon. “Crossed Lines: ZTE Gets Tangled in U.S.-China Telecom-Gear “Cold War.” Forbes, 29 December (2012).

Moulder, Frances. Japan, China and the Modern World Economy: Toward a Reinterpretation of East Asian Development ca. 1600 to ca. 1918. New York: Cambridge University Press, 1977.

Muncaster, Phil. “State handout won't play well abroad as SEC clamps down on Chinese firms.” The Register, 5 December (2012).

Nichol, Jim. Central Asia: Regional Developments and Implications for U.S. Interests. Washington DC, Congressional Research Service, (March 2014).

North, Douglass C. Understanding the Process of Economic Change. Forum Series on the Role of Institutions in Promoting Economic Growth, Washington DC: Mercatus Center at George Mason University, 2003.

OECD. “Total Official Development Flows by Country and Region (ODF).” Paris, 2014.

Oil and Gas Journal. “Turkmen plant to yield gasoline from gas.” (August 26 2014). Pannier, Bruce. “Is Turkmenistan Losing Iran As A Gas Customer?” Radio Free Europe. (14 August 2014).

Park, Gene. Spending Without Taxation: FILP and the Politics of Public Finance in Japan. Stanford: Stanford University Press, 2011.

Prazniak, Roxann. “Tabriz on the Silk Roads: Thirteenth Century Eurasian Cultural Connections.” Asian Review of World Histories, vol. 1, no. 2 (2013), pp. 169-188.

Ramo, Joshua Cooper. Beijing Consensus. London: The Foreign Policy Centre, 2004. Rebol, Max. “Why the Beijing Consensus is a Non-Consensus: Implications for Contemporary China Africa Relations.” Culture Mandala: Bulletin of the Centre for East West Cultural & Economic Studies, vol. 9, no.1 (2010), pp. 7-20.

Pannier, Bruce. “Is Turkmenistan Losing Iran As A Gas Customer?” Radio Free Europe. 14 August 2014.

Rickleton, Chris. “Is Turkmenistan’s Gas Flowing Toward a One-Country Policy?” Eurasianet.org, (18 August 2014a).

Rickleton, Chris “China’s energy footprint in Central Asia.” China Dialogue, (27 July 2014b).

Ruseckas, Laurent. “State of the Field Report. Energy and Politics in Central Asia and the Caucasus,” Access Asia Review, vol. 1, no. 2. (1998), pp. 41-84.

Sauvant, Karl P. “New Sources of FDI: The BRICS.” Journal of World Investment and Trade, vol 6., no. 5 (2005), pp. 639-709.

Schaller, Michael. American Occupation of Japan. New York: Oxford University Press, 1985.

Schmidt, Michael S., Keith Bradsher and Christine Hauser. “U.S. Panel Cites Risks in Chinese Equipment.” The New York Times, (8 October 2012).

Scobell, Andrew, Ely Ratner and Michael Beckley. China’s Strategy Toward South and Central Asia. Santa Monica: Rand Corporation, 2014.

Snidal, Duncan. “The limits of hegemonic stability theory.” International Organization, vol. 39, no. 4 (1985), pp. 579-614.

Souleimanov, Emil, Kamil Pikal and Josef Kraus. “The Rise of Nationalism among Iranian Azerbaijanis,” Meria, (March 20 2013).

Stares, Paul B., Scott A. Snyder, Joshua Kurlantzick, Daniel Markey, and Evan A. Feigenbaum. Managing Instability on China’s Periphery. New York: Council on Foreign Relations, 2011.

Starr, S. Frederick, Bulat Sultanov, S. Enders Wimbush, Fatima Kukeyeva, Svante E. Cornell, Askar Nursha. Looking Forward: Kazakhstan and the United States. (Central Asia-Caucasus Institute and Silk Road Studies Program, Johns Hopkins University, 2014.

State Administration of Foreign Exchange. “The Time-Series Data of China’s Foreign Exchange Reserves.” (20 October 2014).

Sutter, Robert G. Chinese Foreign Relations: Power and Policy since the Cold War. Lanham, MD: Rowman & Littlefield, 2008. Szamosszegi, Andrew and Cole Kyle. An Analysis of State-owned Enterprises and State Capitalism in China, Washington DC: U.S.-China Economic and Security Review Commission, (26 October 2011).

Tsuru, Shigeru. Japan's Capitalism. Cambridge: Cambridge University Press, 1993. UN. World Population 2012, Department of Economic and Social Affairs, Population Division, New York: United Nations: 2014.

UNCTAD. “Recent Trends in the World Economy,’ pp. 1-14 in Trade and Development Report 2014. (New York and Geneva: United Nations, 2014a).

UNCTAD. “Global Investment Trends,” pp. 2-34 in World Investment Report 2014. (New York and Geneva: United Nations, 2014b).

UNCTAD. “Regional Investment Trends,’ pp. 36-104 in World Investment Report 2014. (New York and Geneva: United Nations, 2014c).

UNCTAD FDI/TNC database. “Web table 3 FDI inward stock, by region and economy 1990-2013”. www.unctad.org/fdistatistics. (2014).

UNIDO. Industrial Development Report 2013. Sustaining Employment Growth: The Role of Manufacturing and Structural Change. (Vienna: United Nations Industrial Development Organization, 2014).

Urio, Paolo. China, the West and the Myth of New Public Management: Neoliberalism and its Discontents. London: Routledge, 2012.

Waltz, Kenneth. Theory of International Politics. Reading, MA: Addison-Wesley, 1979. Wooldridge, Adrian. “The visible hand.” The Economist. (21 January 2012).

Xing, Li and Timothy M. Shaw. “The Political Economy of Chinese State Capitalism.” The Journal of China and International Relations, vol. 1, no. 1 (2013), p. 88-113.

Xu, Yi-chong and Gawdat Bahgat. The Political Economy of Sovereign Wealth Funds. New York: Palgrave Macmillan, 2011.

Ziegler, Charles E. and Rajan Menon. “Russia, China, and the United States are Neomercantilism and Great-Power Energy Competition in Central Asia and the Caspian.” Strategic Studies Quarterly, (Summer 2014), pp. 17-41.