Foreign China Research Articles

Strategic Asset Allocation for China's Foreign Reserves: A Copula Approach

AbstractIn this paper, we study strategic asset allocation for China's foreign reserves using a risk‐based approach. Four aspects of the risk management are investigated: an investment universe, dependence structure, allocation strategies under risk minimization and trade‐off between risks and returns. A regime‐switching copula model is developed to investigate the dynamic dependence between assets. One regime emphasizes a short‐term safe asset and the other regime emphasizes a long‐term safe asset. The optimal allocation is derived following two strategies: risk minimization and trade‐off between risks and returns in utility maximization with disappointment avoidance. If the central bank focuses solely on risk minimization, the asymmetries in the asset return dependence encourage the flight to safety. However, if higher risks are allowed in exchange for higher returns, even the exchange is very conservative, and the asymmetries would discourage the flight to safety. Therefore, we suggest that China should mitigate its flight to safety after 2008 and increase holdings of short‐term bank deposits, long‐term treasury bonds and euro bonds.

China's Foreign Aid

China's Foreign Aid

The valuation of equity warrants under the fractional Vasicek process of the short-term interest rate

Motivated by the empirical evidence of long range dependence in short-term interest rates and considering the long maturities of equity warrants, we propose the fractional Vasicek model to describe the dynamics of the short rate in the pricing environment of equity warrants. Using the partial differential equation approach, we present a valuation model for equity warrants under the assumption that the short rate follows the fractional Vasicek process. After identifying the pricing model for equity warrants, we provide the parameter estimation procedure for the proposed pricing model. Since obtaining the values of equity warrants from the proposed model needs to solve a nonlinear equation, we employ a hybrid intelligent algorithm to get around this optimization problem. Furthermore, to illustrate the practicality of our proposed model, we conduct an empirical study to ascertain the performance of our proposed model using the data from China’s warrant market and the China Foreign Exchange Trade System. The comparison of traditional models (such as the Black–Scholes model, the Noreen–Wolfson model, the Lauterbach–Schultz model, and the Ukhov model) with our proposed model is also presented. The empirical results show that the mean absolute percentage error of our pricing model is 10.30%. By contrast, the Black–Scholes model, the Noreen–Wolfson model, the Lauterbach–Schultz model, and the Ukhov model applied to the same warrant produce mean absolute errors of 35.26%, 37.67%, 33.40%, 32.81%, respectively. Thus the long memory property in stochastic interest rates cannot be ignored in determining the valuation of equity warrants.

Xi Jinping's Operational Code Beliefs and China's Foreign Policy

What will China’s foreign policy be under Xi Jinping, the new Chinese leader in Beijing? Will Xi follow Hu Jintao—his predecessor—or change the course of China’s foreign policy orientation in the next decade? Engaging in the current debates over rising China’s foreign policy and its implications for regional security, we suggest ‘bringing the leaders back in’ for a study of China’s foreign policy under Xi. We apply operational code analysis, a political psychology approach, to examine the differences and similarities of Xi and Hu’s belief systems. We suggest that Xi shares Hu’s philosophical and instrumental beliefs, which implies more continuities than changes in China’s foreign policy under Xi. In addition, Hu and Xi share similar cooperative worldviews, but the latter’s strategy tends to be more assertive. This suggests that although Xi is a status quo leader, optimistic about the existing international system, he may adopt an assertive foreign policy to achieve his strategic goals if external pressure grows too great. Other states, especially the United States, need to review and revise their foreign policy on China should they have adopted, or intend to adopt, a containment policy towards the PRC, because although a rising China may not be a threat, an angry China indeed will be.

China's Foreign Policy Outlook in the Xi Jinping Era: An Analysis on the Work Report of the CCP 18th Party Congress

China's Foreign Policy Outlook in the Xi Jinping Era: An Analysis on the Work Report of the CCP 18th Party Congress

China's Foreign Policy: Responding to the US Pivot to Asia and Managing Differences with its Neighbours

China devoted much effort to manage its relations with Asia-Pacific countries in 2012 due to the US pivot to the region. China views the military-centric focus of the US pivot as directed at China and as emboldening regional countries to be more assertive in their territorial claims vis-à-vis China. In 2013, the Chinese leadership will likely strike a balance between seeking a stable external environment and standing firm on issues concerning China's national interests.

Impacts of China's Foreign Direct Investment in Sub-Saharan Africa

Impacts of China's Foreign Direct Investment in Sub-Saharan Africa

病胡苦疾 – 中古入華胡人的疾患與治療

病胡苦疾 – 中古入華胡人的疾患與治療

Recent Trends and Implications of China Company Law and Foreign Investment Law - Focusing on Some Recently Promulgated Judical Interpretations

Recent Trends and Implications of China Company Law and Foreign Investment Law - Focusing on Some Recently Promulgated Judical Interpretations

The Empirical Analysis on Environmental Effects Caused by China Foreign Trade

Since reform and opening up, as an important factor of economic growth, trade has promoted the development of China’s economy sharply, at the same time, it brought about the destruction of the ecological environment which is the focus of academic debate. There is still not any definite conclusion about the impact of trade on the environment. In this paper, by establishing a measurement model, we calculate the environmental effects of trade from scale, technology and structure three aspects, conclusion shows that the structure effect and technology effect of liberalization of trade will improve the level of China’s environment, but the scale effect of trade while promoting economic expansion will cause environmental damage

Chinese Perceptions of the U.S.: An Exploration of China's Foreign Policy Motivations. By Biwu Zhang. Lanham, Md.: Lexington Books, 2012. xvi, 266 pp. $70.00 (cloth).

Chinese Perceptions of the U.S.: An Exploration of China's Foreign Policy Motivations. By Biwu Zhang. Lanham, Md.: Lexington Books, 2012. xvi, 266 pp. $70.00 (cloth).

Xi Jinping and China's Foreign Relations: Its Policies toward the US and North Korea

Xi Jinping and China's Foreign Relations: Its Policies toward the US and North Korea

Past and Present in China's Foreign Policy: From “Tribute System” to “Peaceful Rise.” Edited by John E. WillsJr. Portland, ME: Merwin Asia.2011. xx, 130 pp. $35.00 (paper).

Past and Present in China's Foreign Policy: From “Tribute System” to “Peaceful Rise.” Edited by John E. WillsJr. Portland, ME: Merwin Asia.2011. xx, 130 pp. $35.00 (paper).

Past and Present in China's Foreign Policy: From “Tribute System” to “Peaceful Rise”, edited with an introduction by John E. Wills, Jr. Portland: MerwinAsia, 2011. xxii + 133 pp. US$35.00 (paperback).

Previous articleNext article No AccessReviewsPast and Present in China's Foreign Policy: From “Tribute System” to “Peaceful Rise”, edited with an introduction by John E. Wills, Jr. Portland: MerwinAsia, 2011. xxii + 133 pp. US$35.00 (paperback).Bryce KositzBryce KositzThe Australian National University Search for more articles by this author PDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The China Journal Volume 68July 2012 Published on behalf of the Australian Centre on China in the World at the Australian National University Article DOIhttps://doi.org/10.1086/666555 Views: 70Total views on this site Copyright 2012 by The Australian National University. All rights reserved. For permission to reuse, please contact [email protected]PDF download Crossref reports no articles citing this article.

Chinese perceptions of the U.S: an exploration of China's foreign policy motivations

Foreword Chapter 1. What are China's Foreign Policy Motivations? Chapter 2. Image Study as an Approach to Explore China's Motivations toward the U.S. Chapter 3. Chinese Perceptions of Threat from the U.S. Chapter 4. Chinese Perceptions of Opportunity from the U.S. Chapter 5. Chinese Perceptions of American Power Chapter 6. Chinese Perceptions of American Economy Chapter 7. Chinese Perceptions of American Politics Chapter 8. Conclusion

Chinese Education in Diplomacy

Since 1964 when the China Foreign Affairs University offered a course entitled of PRC Foreign Relations, education diplomacy started to take shape in Chinese universities and achieved several accomplishments in many aspects. Over the years, significant improvements have been witnessed not only in developing a Chinese-style curriculum system and compiling numerous textbook references, but also in designing syllabi and improving teaching methods. This progress has contributed to the education of several generations of professional diplomats. However, as China rises rapidly to prominence in the international arena, the demand for highly professional diplomats is becoming increasingly stronger. It is therefore pertinent to ask: to what extent does education in diplomacy at current Chinese universities meet this demand? Although there have been critical investigations made into Chinese diplomatic studies, there appears to be no analysis of Chinese education in diplomacy. Therefore, this article aims to fill this gap. Research into Chinese education in diplomacy is supported by three types of data sources. The first comprises textbooks used widely in Chinese universities. These books are widely used in Chinese diplomatic education: (a) Contemporary China Foreign Relations: Theory and Practice by Yang Gongsu and Zhang Zhirong of the School of International Studies at Peking University. This book has been used as a textbook at the School of International Studies for many years. (b) Introduction to Chinese Diplomacy by Li Baojun of Renmin University. (c) Contemporary Foreign Affairs of China by Yan Shengyi of Fudan University. (d) History of Contemporary Chinese Diplomacy by Xie Yixian of China Foreign Affairs University. (e) Diplomatic Thought in the People's Republic of China by Ye Zicheng of Peking University. The second data source is a collection of syllabi employed in Western diplomatic education. These provide a comparison between Western and Chinese diplomatic education: a) Chinese Foreign Policy 1949-2005 by Alastair Iain Johnston of Harvard University; b) International Relations Theory and the Study of Chinese Foreign Policy by Thomas J. Christensen of Princeton University; c) Chinese Foreign Policy: International Relations and Strategy by Fravel M. Taylor of the Massachusetts Institute of Technology, and the syllabus of China and the World; and d) National Unification and International Integration--China Faces the Future by Allen Carlson of Cornell University. The third data source comes from the author's decade-long teaching experience in the Department of International Relations at Jilin University, as well as feedback from the students. A content analysis of textbook and syllabi was carried out to examine the goals, contents and pedagogy of Chinese education in diplomacy. SHORTCOMINGS IN THE CURRICULUM CONTENT In any discipline, including diplomacy, the first question an educator should ask is what kind of knowledge and skills he or she intends to impart to the students. This article proposes the following five aspects to be addressed in the curriculum content. First, the teaching focus, which can also serve as the objective of comparative studies in the field, should be on Chinese foreign policy and diplomatic relations. Second, teaching should be strongly oriented towards a strong engagement in both China's international status and international trends, thereby building the capability of students to work in alignment with national strategy and develop an acute sensitivity to changes in the international environment. Third, teaching should not only focus on diplomatic theories, but also on the realities of diplomacy. Fourth, the history of Chinese diplomacy and that of Chinese diplomatic thinking needs to be emphasised in the teaching. Fifth, training in research methods is essential for conducting basic research, especially for graduate students. …

China's Foreign Policy: Coping with Shifting Geopolitics and Maintaining Stable External Relations

China's foremost foreign policy challenge in 2011 was to grapple with an increased American presence in the Asia-Pacific which has affected the dynamics of big power relations in the region. China, nevertheless, did not overreact but sought stable ties with major powers and friendly cooperation with its neighbours. It also tempered expectations of its role in the eurozone debt situation. With an impending leadership succession in 2012, China will place a premium on maintaining a stable external environment.

China – Africa Foreign Trade Policies: the Impact of China's Foreign Direct Investment (FDI) Flow on Employment of Ghana

Ghana has identified foreign direct investment as a key way to transform its economic growth. China looks on to offer Ghana a new model for development alternative to the western style that depends on commercial relations and fair market. It prioritizes stability over democracy by way of providing alternative development model through promoting product differentiation and competing in different market mechanism. The main question of this research project is “What is the impact of China Foreign Direct Investment (FDI) flows on the Ghanaian employment sector?” This study would get rid of the wrong impression people have diabolically registered on their minds about Chinese investments. It is imperative that the study would assist students, economists, investors, business leaders and other government officials to understand the significance of FDI and its realization of a sustainable societal development. It will be able to strengthen existing factual and evaluative statements about the impact of Chinese FDI. This research will be limited to the employment activities Chinese investments have impacted in the economy of Ghana. This research is set to determine the quality of goods and services rendered to the various economic sectors of Ghana; the role of Chinese FDI in Ghanaian economy and other financial flows such as loans, development assistance between China and Ghana. This study makes use of the statistical descriptive method which supports the analysis of the influence of FDI inflow in a quantitative way. Results from the study shows that, about 80% or more of investments from China has been mostly concentrated in the Manufacturing, Building & Construction and General Trade sectors of the economy of Ghana for the past five (5) years. This study will be complimented by empirical findings in later sections.

Trend Prediction of FDI Based on the Intervention Model and ARIMA-GARCH-M Model

For providing the government with effective monitoring of the trends of the economic variables in the future and good reference for developing a reasonable policy, in this paper, we establish a time series model on China's Foreign Direct Investment (FDI) by using wavelet analysis and intervention analysis and time series analysis and predict the trend of FDI in the next several years. This model eliminates the interference of noise for predicting by using wavelet analysis, and describes the autocorrelation and time-varying volatility of the financial time series by using ARIMA- GARCH-M model. The simulation results show that this model explains the dynamic structure of China's FDI trends well.

The Academic Career and Economic Thought of Yifeng Wu

As a Marxist economist, Yifeng Wu is a distinguished Rank-A Professor at Renmin University of China (RUC). In his lifetime, Professor Wu has assumed many prominent academic and professional positions. For example, he has been elected the President and Honorary President of China Foreign Economics Research Association, Vice President of the National Marxist Economics History, and Chief Expert in Western Economics Research Group in the grand project of the Marxist Theoretical Research and Construction. Due to the acknowledgment of his academic achievement, he also sits as a part-time professor or guest researcher in many famous universities and research institutes across China. His academic contributions spread into a wide range of fields, such as theoretical sources of Marxism, Marxist economics, contemporary Western economics, neo-liberalism, comparative analysis of theoretical economics, and major issues of both domestic and international economies. His academic works and publications have made significant contributions to every field that he has studied.Due to his lifetime of distinguished contributions and high recognition, Professor Wu has won numerous titles and awards, such as the National Award for Outstanding Teaching Achievement, National Award of the Excellent Chinese Publications, Yuzhang Wu Award for outstanding achievement in scientific research, the top prize in the Outstanding Achievement of National Humanities and Social Science Research, the first prize of Outstanding Social Science Research Achievement of Beijing, the Beijing Higher Education Quality Books Award, the first prize of the Beijing Municipal Education Teaching Achievement Award, the first prize of outstanding achievements in scientific research of RUC. He is also a senior translator appointed by the National Association of Translators, and was awarded the National Outstanding Teacher title.BiographyWu was born on April 21, 1932, in a family of poverty in a village named Jishui in Gaoyou County, Jiangsu Province. With few resources to support his education during his childhood, Wu only managed a few years of study at subsidized schools, and formally attended a primary school for just half a year. Between 1947 and 1950, he studied at Jieshou Rural Normal School first, and then at Yangzhou Normal School. From 1950 to 1955, he engaged in adult education. During this period, he studied Knowledge in Economic Construction, which also developed his strong interest in the field of economics. In 1955, Wu was enrolled by Renmin University of China, majoring in Political Economy at the Department of Economics. After graduation in 1959, he stayed at RUC and taught History of Economic Thought. During this period of time, Professor Hongye Gao, who earned his PhD in Economics in the United States in 1956, returned to China. The two were assigned to the same teaching department. From then on, they benefited each other by learning from each other in research and teaching. Their long-term cooperation, which lasted nearly half a century, has become a beautiful story in the academic circle of China.During the Cultural Revolution, the normal teaching and research work was stopped at Renmin University of China (RUC). Wu was forced to labor in rural villages in a campaign called Reformation of intellectuals. When RUC resumed its normal operations in 1978, Wu returned and started to teach in this university again. In addition to the teaching of History of Economics Thought, he began to teach courses in Western Economics and Mathematical Economics.From 1989 to 1990, Professor Wu, as an invited senior visiting scholar, visited several US universities in Los Angles, Boston, and New York, and updated himself with the latest developments in Western economics as an academic discipline. In 1995, he was invited by the Russian Academy of Sciences to engage in academic exchanges in Moscow and St. Petersburg. After returning home, he published the report The Russian and Chinese Economies from the Perspectives of Russian Economists, with an attempt to call upon China to learn the lessons from the painful experiences of Russia, and to warn against falling into the trap of privatization and liberalization advocated by neo-liberalism. …