Economic Change and Restructuring

, Volume 46, Issue 1, pp 25–43 | Cite as

From foreign trade to international investment: a new step in China’s integration with the world economy

  • Françoise LemoineEmail author


China’s economic strategy is facing new challenges arising from the changes in the world economy as well as in its domestic conditions. Given the sluggish global economy and the rise of protectionist policies, China cannot expect external demand to contribute to its economic growth as much as in the past. On the domestic side, the working age population has ceased to increase and will soon diminish; rising domestic costs will force Chinese exporters to shift from price competitiveness to quality upgrading and to build new comparative advantages. An important dimension of China’s new strategy will be the expansion of its direct investment abroad. China which has already become the leading world exporter and has been up to now a major recipient of foreign direct investment is likely to turn out to be a major international investor. China has accumulated large foreign assets which mainly consist of foreign government debt securities and is now aiming at diversifying its external assets through promoting Chinese firms’ investment abroad.


China International trade  FDI Technology transfer 


  1. Bensidoun I, Françoise L, Ünal-Kesenci D (2009) The integration of China and India into the world economy: a comparison. Econ J Comp Econ 6(1)Google Scholar
  2. Cai F (2012) The coming demographic impact on China’s growth: the age factor in the middle-income trap”. Asian Economic Papers 11(1):2012CrossRefGoogle Scholar
  3. Cheng, K. Leonard and Zihui Ma (2007): “China’s Outward FDI: Past and future”, school of economics, working paper no. 200706001EGoogle Scholar
  4. Deutsche bank research (2011) “China’s financial integration into the world economy”. November 23, 2011Google Scholar
  5. Gaulier G, Françoise L, Ünal D (2011) “China’s Foreign trade in the perspective of a more balanced economic growth”, CEPII working paper 2011–03Google Scholar
  6. Hanemann T, Rosen DH (2012) China invests in Europe. Patterns, impacts and policy implications. rhodium groupGoogle Scholar
  7. Hu AGZ, Jefferson G, Xuaojing G, Jinchang Q (2003) R&D and technology transfer: Firm-level evidence from Chinese industry, The William Davidson institute working paper No 582Google Scholar
  8. Huang Y (2012) “The changing face of Chinese investment”, East Asian Forum, 4(2) April-June 2012Google Scholar
  9. IMF (2012) PRC Staff report for the 2012 article IV consultation, July 6/2012Google Scholar
  10. Lardy N (2012) Sustaining China’s economic growth after the global financial crisis. Peterson Institute for International Economics, Washington, D.CGoogle Scholar
  11. Lemoine F (2010) Past successes and new challenges: China’s foreign trade at a turning point. China World Econ 18(3):1–23CrossRefGoogle Scholar
  12. Lemoine F, Ünal-Kesenci D (2004) Assembly trade and technology transfer: the case of China. World Dev 32(5):829–850CrossRefGoogle Scholar
  13. Lu M, Chen Z, Sachs J and Wing Thye Woo (2012) New economicgrowth engine for China: escaping the middle-income trap by not doing more of the same, World Scientific Press and the Imperial College Press. 2012Google Scholar
  14. Poncet S, Jarreau J (2012) Export sophistication and economic performance: evidence from Chinese provinces. J Dev Econ 97:281–292CrossRefGoogle Scholar
  15. Rodrik D (2006) What’s so special about China’s exports? China & World Economy, 14 (5): 1–19, Institute of world economics and politics, Chinese academy of social sciencesGoogle Scholar
  16. Rosen D and Hanemann T H (2011) : An American open door? Maximizing the benefits of Chinese Foreign direct investment”. Center on U.S.-China relations and Kissinger institute on China and the United States. Special report. MayGoogle Scholar
  17. Subramanian A (2011) ECLIPSE. Living in the Shadow of China’s Economic Dominance. Peterson Institute for International Economics, Washington, D.CGoogle Scholar
  18. UNCTAD (2012): World investment reportGoogle Scholar
  19. Wakasugi R, Ito B, Tomiura E (2008) Offshoring and trade in East Asia: a statistical analysis. Asian Econ Pap 7(3):101–124CrossRefGoogle Scholar
  20. World Bank (2012): China 2030. Building a Modern, Harmonious, and Creative High-Income Society, The World Bank, 2012Google Scholar
  21. Yang Y (2011) The relationship between Chinas export-led growth and its double transition of demographic change and industrialization. Asian Econ Pap 10(2):52–76CrossRefGoogle Scholar
  22. Yu Y (2012) “The Correction of China’s twin surpluses” in Lu Ming et al (2012)Google Scholar

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.CEPIIParisFrance

Personalised recommendations