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China’s public international investment: A strategic-trade-policy perspective

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  • Konrad, Kai A.

Abstract

Initiatives such as the Belt and Road initiative reduce trade costs, increase export firms’ profits and stimulate their activities in R&D contests. The resulting strategic-trade policy equilibria tend to be asymmetric. One country earns leadership in the markets for exports to the rest of the world. Factors that are conducive for a country to gain the role of major innovator and exporter nation are: (1) whether a nation follows a ‘national champions’ policy compared to a rigorous national anti-trust policy, (2) whether a nation has a large pre-existing export sector, (3) whether the government places a high welfare weight on the profits of the firms in its country, and (4) whether the government has low opportunity costs of such investment policies. Piecemeal evidence suggests that, compared to the US, China has the advantages in all these four dimensions.

Suggested Citation

  • Konrad, Kai A., 2024. "China’s public international investment: A strategic-trade-policy perspective," Economic Modelling, Elsevier, vol. 139(C).
    • Handle: RePEc:eee:ecmode:v:139:y:2024:i:c:s0264999324001378
    DOI: 10.1016/j.econmod.2024.106781
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    More about this item

    Keywords

    Strategic trade policy; Geopolitics; International infrastructure investment; Innovation contests; Global patent races; China-US conflict;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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