Perceived as an illegitimate way to consolidate power within the international system, China adamantly insisted that the intention of the CIC was purely profit maximization of forex holdings The bottom line is that China is becoming more politically important in the international system through her economic policies.
The great question remains: China has emerged asa major global economic power. Because of the protests against CIC investing in American institutions at its conception insuch blatant action on the part of CIC would be untactful. I believe a softer coercion is more likely. CIC only works to promulgate this image as an investment body of endless reserves.
This does not mean that China will not look to its SWF or simply to its vast forex reserves for policy coercion in the future. The Chinese government views a growing economy as vital to maintaining social stability. To tie all this together, it is helpful to think back to the proposals for CIC before it was formed.
China has credited herself as being the stopgap between economic failure and the U. Since then the American government has turned to China as a potential stable investor, most notably in U.
Influencing American foreign policy by reminding the U. In the CRS report for Congress published on August 15th,it was argued that Chinese soft power was augmented by her investment in Morgan Stanley when the stock was plummeting In total, it is unlikely, but not completely determinable, that CIC is a foreign policy tool.
It is estimated that to date million people in China have been raised out of extreme poverty. This shed a heroic light on CIC and China as an investing agency in general. She currently maintains a strong interest in Chinese-US security relations. However, the emergence of China as a major economic superpower has raised concern among many U.
Cite References Print One might also expect CIC to acquire strategic holdings if it were purposed to be a foreign policy tool.
The argument asserts that through a bottom up mechanism, China will gain control of these companies, and by extension the U. China has recognized her growing economic prosperity as a platform to command greater political power and to realize a greater number of her international desires.
Some claim that China uses unfair trade practices such as an undervalued currency and subsidies given to domestic producers to flood U.
He imagined the entity would be led by the IMF and would revoke the U. American policy, however, has remained steadfast towards Chinese interests, and so it seems unlikely that CIC is using its powers in this way, or if it is, they are quite ineffective. Felicity has been involved with CIAR since the fall issue when she first started to become engaged in international politics.
It makes sense that China would invest in equities and natural resources because these types of firms tend to have the highest and quickest paying returns.
The third reason CIC should not be classified as a foreign policy tool is because she has overtly declined voting stakes in her investments. Winston Wenyan reported that the fund was "not really looking for voting rights or control but [was] trying to take advantage of surging asset values in China and depressed valuations here in the U.
However, China faces a number of major economic challenges which could dampen future growth, including distortive economic policies that have resulted in over-reliance on fixed investment and exports for economic growth rather than on consumer demandgovernment support for state-owned firms, a weak banking sy stem, widening income gaps, growing pollution, and the relative lack of the rule of law in China.
This represents an effort on the part of China to distance herself from direct interaction with the corporation in which it seeks holdings. These operations have helped some U.
It comprises institutional ar- rangements patched together in ad hoc improvisations to address the needs and demands arising from rapid market-oriented economic growth. It was not until after the financial crisis that such articulations like the one cited above by Gao were uttered. But arguing that these leaders are competent is not proof enough to dispel this theory.
Second, one will note the numerous holdings that are actually purchased through a third body. The arguments of Kirchner, Drezner and Cognato dispel this thought. He also envisioned special drawing rights for states with large investments.
As the concentration of power in the world system comes to center more on economic growth, the perception that such growth emanates from China is exceedingly important, and positions her more centrally as a source of power within the system.
Morrison, Specialist in Asian Trade and Finance. This proposal demonstrates several Chinese objectives:Economic Issues Wayne M. Morrison Specialist in Asian Trade and Finance Marc Labonte Specialist in Macroeconomic Policy December 7, Congressional Research Service ultimedescente.com RS China’s Currency: A Summary of the Economic Issues Congressional Research Service A Summary of the Economic Issues.
China the rise of an economic giant 1. CRS Report for Congress Prepared for Members and Committees of Congress China’s Economic Rise: History, Trends, Challenges, and Implications for the United States Wayne M.
Morrison Specialist in Asian Trade and Finance December 17, Congressional Research Service ultimedescente.com. 1 While Morrison places it second, a recent Organisation for Economic Co-operation and Development (‘OECD’) report places it fourth. Wayne Morrison, China’s Economic Conditions, CRS Report for.
This report provides background on China's economic rise; describes its current economic structure; identifies the challenges China faces to maintain economic growth; and discusses the challenges, opportunities, and implications of China's economic rise for the United States.
Wayne M. Morrison, China's Economic Rise: History, Trends, Challenges and Implications for the United States, CRS Report for Congress RL (Washington, DC: Congressional Research Service, ). 9 Wang, “Democratic Transitions,” China’s Currency: Economic Issues and Options for U.S.
Trade Policy Summary The continued rise in China’s trade surplus with the United States and the A Summary of the Economic Issues, by Wayne Morrison and Marc Labonte.Download