China-US Trade War and Trade Talk by Miaojie Yu

Author:Miaojie Yu
Language: eng
Format: epub
ISBN: 9789811537851
Publisher: Springer Singapore

1 Literature Review

A large body of literature of international economics focuses on the fundamental factors that drive FDI behavior. Melitz (2003) developed a theoretical model of monopolistic competition with heterogeneous firms to explain the decision of FDI, which becomes the cornerstone of the literature examining the role of heterogeneity in FDI. Helpman et al. (2004) generalized Melitz (2003) to explain horizontal FDI. Melitz’s (2003) framework has been used in explaining different issues, including trade liberalization, technology adoption (Bustos 2005), complex integration strategies (Yeaple 2003), variable markups (Ottaviano et al. 2002) and so on.

The empirical literature on FDI examines the internal and external factors that determine the FDI by multinational enterprises. Firm characteristics are used to explain FDI activities (Morck and Yeung 1992; Navaretti and Venables 2004). External factors are also examined by different researchers, including the effects of exchange rates (Froot and Stein 1991; Campa 1993; Blonigen 1997; Lipsey 2001), taxes (Hartman 1984, 1985; Swenson 1994; De Mooji and Ederveen 2003), institutions (Wei 2000a, b), trade protection (Gtubert and Mutti 1991; Kogut and Chang 1996) and so on.

Many empirical researches are about the effects of FDI on the performants of Chinese firms, including researches on the effects on different industries (Zhang and Zheng 1999; Cheung 2010), different source countries (Jiang and Zhang 2011; Shiau et al. 2013), location choices (Sharma et al. 2014), inward FDI (Liu et al. 2014) and outward FDI (Buckley et al. 2007; Deng 2013). Based on data of 220 cities in China from 2003 to 2009, using threshold panel regression estimation, Li and Liu (2012) find significant threshold effects of FDI on China’s environment. Their tests from income threshold show that, in the middle-income stage, FDI generates degradation of local environment quality.

Although there are a large number of researches on FDI in general, the literature specifically about BIT is relatively limited. Cui (2013) introduces the content of the 2012 version of the U.S. BIT template and gives suggestions on China’s strategy in U.S.–China BIT negotiation. Huang and Zhou (2013) discuss China’s new strategy of open-up to the world, including making progress in China–U.S. BIT negotiations. Liang and Yan (2013) point out the core issues of the China–U.S. BIT negotiations and difficulties of the negotiations due to the institutional factors. Pan and Tang (2013) introduce the national security investigation mechanism of the U.S. Government. Wang (2013) examines the new version of the U.S. BIT template and discusses the difference between the two sides. Yao (2013) discusses the risks of China–U.S. BIT for China in the long run, including the internationalization of the domestic policy and the liberalization of the capital account.

On the U.S. side, Bergsten (2005) argues that, to respond to the challenges and threats in the world, the USA should alter its priorities in the Doha Round to an important degree by placing even greater emphasis on reduction of agricultural subsidies and extensive liberalization of service markets. The Peterson Institute for International Economics and the China Development Research Foundation (2015) has a discussion on the U.S.–China BIT, including the U.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.