NATIONAL LAW SCHOOL OF INDIA UNIVERSITY

ECONOMICS II

THE ROLE OF THE GOVERNMENT IN THE CHINESE ECONOMY

Jay Bhaskar Sharma

I.D. – 2474

I Year, II Trimester (B.A.LLB)

Submitted on – December 7th, 2018

1
 TABLE OF CONTENTS

Introduction......................................................................................................................................3

Macroeconomic Conditions in China..............................................................................................4

China’s Currency Manipulation......................................................................................................7

Government Policies Favoring Domestic Market.........................................................................11

Infant Industry Policy………………………………………………………………………….11

Mixed Ownership Reform.........................................................................................................13

The Anti-Monopoly Law of China............................................................................................13

Catalogue guiding foreign investment.......................................................................................14

Conclusion.....................................................................................................................................16

Bibliography..................................................................................................................................17

2
 INTRODUCTION

Two centuries ago, in 1820, China and India were the most productive country in the world
accounting for half of the global economy. Now, China is the world’s second largest economy in
nominal terms.1 It is not a new thing to hear that Chinese government regularly interferes in the
functioning of its economy and dictate the trading terms according to its wish. Therefore,
assessing and analyzing the Chinese government’s economic policy, its objectives, effects and
risks is directly relevant to global economic affairs.

China has made the world envy it for so many years with its fascinating growth unmatched and
unparalleled by any other big economy. In 2017, the Chinese economy accelerated for the first
time since 2010.2 To effectively achieve the objective of this paper, it is divided in the following
manner.

The initial part deals with the macroeconomic conditions in China and identifies the problems
the Chinese economy is going through. This is done using GDP growth rate, debt to GDP ratio,
balance of trade, and US-China trade war. Later on, the currency manipulation scheme of china
is discussed and the policies used by the government to regulate the trade in the country, such as
mixed ownership reform, anti-monopoly law.

1
The Globalist, ‘China vs. The US: The GDP Race’ (The Globalist, 13 April 2018)
https://www.theglobalist.com/china-united-states-gdp-economy/ accessed 5 December 2018.
2
Capital Linguists, ‘The Current State of the Chinese Economy’ (Capital linguists) https://capitallinguists.com/the-
current-state-of-the-chinese-economy/ accessed 4 December 2018.

3
 Macroeconomic Conditions in China

Currently, the Chinese economy’s growth is slowing down. 3 It has gone down from 10.636% in
2010 to 6.4% in 2016. It is only in the last year that the GDP growth has moved up. One of the
main reasons for this slowdown is china’s large debt, 17.66 trillion yuan ($2.58 trillion). 4 China
is straddled with a debt to GDP ratio of 257%.5 In the meantime, credit expansion is also
decelerating.6 During this course, China’s export industry is also hit by US sanctions which is
causing a negative impact on the economy. The central bank is maintaining the credit policy of
the country in a snaky manner for the past few years so as to keep the debt limited and avoid
sharp economic slowdown.7

GDP Growth Rate in China

12
10.64
9.65
10 9.4 9.54

7.86 7.76
8 7.3
6.9 6.7 6.9

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GDP Linear (GDP)

Figure 1: Source – World Bank National Accounts Data, and OECD National Accounts Data Files.

3
Ira Kalish, ‘China’s economy cools as US trade tension heats up’ (Deloitte Insights, 10 July 2018)
https://www2.deloitte.com/insights/us/en/economy/asia-pacific/china-economic-outlook.html#endnote-sup-3
accessed 6 December 2018.
4
PTI, ‘China’s debt rises to USD 2.58 trillion’ (Economic times, 23 September 2018)
https://economictimes.indiatimes.com/news/international/business/chinas-debt-rises-to-usd-2-58-
trillion/articleshow/65923608.cms accessed 6 December 2018.
5
S.R., ‘Why China’s economy is slowing’ (The economist, 11 March 2015) https://www.economist.com/the-
economist-explains/2015/03/11/why-chinas-economy-is-slowing accessed 3 December 2018.
6
PBOC, ‘Report on aggregate financing to the real economy (flow) in May 2018’ (The People's Bank of China)
http://www.pbc.gov.cn/english/130721/3559373/index.html accessed 2 December 2018.
7
Ira Kalish, ‘China’s economy cools as US trade tension heats up’ (Deloitte Insights, 10 July 2018)
https://www2.deloitte.com/insights/us/en/economy/asia-pacific/china-economic-outlook.html#endnote-sup-3
accessed 6 December 2018.

4
Both USA and China are frequently indulging in trade wars and it can cause impact on cross
pacific trade. The consequences can be, increased prices → reduction in real income →
slowdown in consumer and business spending → reduced investment → diminished cross-border
investment → disruption in global supply chain → spillover effect8 on other nations.

The two major concerns of US is, one, the uncompensated transfer of intellectual property by
China from US companies to Chinese companies, and second, the trade surplus with the United
States.9 Although there is a trade surplus, still China’s aggregate current account surplus has been
declining because of a reduced surplus in goods and a widening deficit in services.10

Figure 2: Source – General Administration of Customs

China’s trade surplus is also narrowing, it has come down to USD 34.01 billion in October 2018
from $36.89 billion in October 2017. China’s surplus with its largest trading partner US has also
reduced to $31.78 billion. From 1981 to 2018, the balance of trade in China has been an average
of $94.11 billion.11

8
Andrew Beattie, ‘Spillover Effect’ (Investopedia, 21 March 2018) https://www.investopedia.com/terms/s/spillover-
effect.asp accessed 5 December 2018.
9
Gabriel Wildau and Shawn Donnan, ‘US demands China cut trade deficit by $200 bn’ (Financial Times, 4 May
2018) https://www.ft.com/content/d0eb3e4a-4f77-11e8-a7a9-37318e776bab accessed 3 December 2018.
10
Rida, ‘China October Trade Surplus Smaller than Expected’ (Trading Economics, 8 November 2018)
https://tradingeconomics.com/china/balance-of-trade accessed 7 December 2018.
11
Ibid.

5
S&P Global has estimates that the local governments in china are carrying the load of debt as
high as $6 trillion under the books.12 Also, China’s expense on building infrastructure such as
highways or public facilities has fallen very low, by 3.3%.13

External Debt
2000
1770
1800 1710
1600 1472
1416
1400 1326
(in billion USD)

1200 1138
1044
1000
800 734.47

600
447.66
380.17
400
200
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Axis Title

Debt Linear (Debt)

Figure 3: Source – World Bank, International Debt Statistics.

The central bank of the nation, the People’s Bank of China has taken steps to put $175 billion
into the economy, especially to help small and medium businesses. The main problem that china
is having is less expenditure by the consumers. Also its stock market has fallen by 15% this
year.14

12
Alexandra Stevenson, “China’s Growth Hits Slowest Pace in a Decade” (The New York Times, 18 October 2018)
https://www.nytimes.com/2018/10/18/business/china-economy-third-quarter.html accessed 6 December 2018.
13
“National bureau of statistics China” http://www.stats.gov.cn/english/
14
Alexandra Stevenson, “China to Pump $175 Billion Into Its Economy as Slowdown and Trade War Loom” (The
New York Times, 7 October 2018) < https://www.nytimes.com/2018/10/07/business/china-lending-trade-war.html>
accessed 6 December 2018.

6
 China’s Currency Manipulation

After years of economic growth, China’s renminbi currency, also called the “yuan”, has been
added to the list of elite global currencies by the International Monetary fund. However, despite
this designation, china has been known to practice currency manipulation in an effort to
influence the value of the yuan. How does china manipulate its currency? Basically, currency
manipulation is the way in which countries attempt to avoid the negative market effects of
having a strong currency. China does not use “floating exchange rate” system wherein market
forces decide the rate, rather it pegs the yuan to the U.S. dollar using a “reference rate” 15 set by
the People’s Bank of China.

The value of a currency is essential dependent on how much or how little it is used, which in turn
is dependent on how strong a country’s trade balance is. When china has a trade surplus, people
in other countries have to buy Chinese currency in order to buy Chinese goods. With an increase
in demand, the price or “value” of the currency goes up. However, as currencies get stronger, it
becomes more expensive to purchase goods. Other, cheaper currencies become more
advantageous to spend. In a way, currency itself can be viewed as a product, whose price is
based on demand. As china has seen rapid and intense economic growth, they’ve attempted to
stem the inevitable devaluation of their currency as their trade surplus grows. This is done
through currency manipulation, which is when one currency is used to buy huge amounts of
foreign currency. That makes it possible to prevent the currency from gaining too much value,
while also bolstering other currencies as well, and keeping them from becoming too
competitively cheap. As a result of this, the net aggregate demand for domestically produced
goods increase.

15
Omkar Godbole, ‘PBOC set the Yuan reference rate at 6.8792’ (FXSTREET, 28 September 2018)
https://www.fxstreet.com/news/pboc-set-the-yuan-reference-rate-at-68792-201809280116 accessed 7 December
2018.

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 Figure 4: Devaluation causes net exports to rise which leads to the increase in both GDP and price level.

How does this work in action? According to Economic Policy institute, China spent half a trillion
dollars in 2013 alone purchasing foreign currencies. 16 This was likely to prevent the value of the
yuan from making manufacturing in china less profitable, while attempting to cheapen the US
dollar. In august 2015, they devalued their currency by nearly 2% against the US dollar, 17 forcing
China’s trade balance to favor exports over imports. It also shook global markets and was the
country’s biggest one day drop in twenty years. But now the US Treasury Department in its
report18 on foreign exchange rate practices has not accused china of manipulating currency. But
surprisingly it has kept china on the monitoring list of manipulators. 19 Moreover, as china’s

16
Robert E. Scott, ‘Exchange rate policies, not high wages, are why US lags China and Germany in export
performance’ (Economic Policy Institute, 2 December 2015) https://www.epi.org/publication/exchange-rate-
policies/ accessed 6 December 2018.
17
Enoch Yiu, ‘Yuan stabilises but doubts over how long the calm can last’ (South China Morning Post, 19 February
2016) https://www.scmp.com/business/money/money-news/article/1914081/yuan-stabilises-doubts-over-how-long-
calm-can-last accessed 6 December 2018.
18
‘Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States’ (October 2018)
https://home.treasury.gov/system/files/206/2018-10-17-%28Fall-2018-FX%20Report%29.pdf accessed 7 December
2018.
19
Ismail Shakil, ‘China not a currency manipulator according to US Treasury’s internal findings’ (Reuters, 12
October 2018) https://in.reuters.com/article/us-usa-trump-china-yuan/china-not-a-currency-manipulator-according-
to-u-s-treasurys-internal-findings-media-reports-idINKCN1MM02E accessed 6 December 2018.

8
exports are hurting the workers in US, it has imposed tariffs on more than $200 billion in
Chinese imports.20

Figure 5: Dollar Yuan Exchange Rate.

The renmibi has fallen 6% against dollar this year. 21A substantial upward revision of currency
can impact exports and economic growth, which in turn could cause political instability. 22 This
currency policy of china prevents the growth of domestic consumer market in the country
because the low rate of yuan encourages over-investment in china’s export manufacturing, also
the undervalued currency makes imports more expensive. It also gives cheap and plentiful access
to the Chinese goods, which also lowers the expenses and the cost of living. On the other hand,
China can use the dollar surplus to purchase the US treasuries. It would also help the US
government to meet its budget deficit.
20
Jason Lange, “U.S. government refrains from calling China a currency manipulator” (Reuters, 18 October 2018)
https://in.reuters.com/article/us-usa-trade-currency/u-s-government-refrains-from-calling-china-a-currency-
manipulator-idINKCN1MR31U accessed 6 December 2018.
21
Alan Rappeport, ‘Treasury Opts Against Labelling China a Currency Manipulator’ (The New York Times, 17
October 2018) https://www.nytimes.com/2018/10/17/business/china-currency-manipulation.html accessed 6
December 2018.
22
In case of Japan, between 1985 and 1995, a deflationary period was caused due to 200% appreciation in the yen
against US Dollar.

9
 Government Policies Favoring Domestic Market

There are many ways in which countries favor their domestic market players, the World Trade
Organization specifies for its members to report it regarding the imposition of subsidies which
they use to support their own industries. These can be in various forms, for instance, giving them
loan below market rate, special policies for regulations, by providing inputs at lower prices,
concession in electricity charges etc. China, being a habitual offender, does not adhere to WTO
guidelines and keeps using the regulations without complying with the rules.23

One such policy of china favoring domestic industries is Infant Industry Strategy.24 In 2010,
UnionPay, a bank card company which had only 0.5% share in the world market, established its
monopoly in Chinese market with 6.3 billion cards in china. China mandated all the yuan-
denominated payment cards to work with UnionPay. The government ordered all the enterprises
to accept its card, limiting the access of other international brands to foreign currencies.

China’s success on international level is not only due to opening up its economy but doing it
selectively and using the government regulations and finance to help domestic organisations.
Also, in terms of foreign investment in the country, china allowed foreign firms to partner with
Chinese firms as equity joint ventures. In this way, the government exercised control over the
firms and took their advantage by using them for Chinese state-owned enterprises.25

Other such policy is the 50:50 rule wherein a foreign automobile firm was not allowed to fully
own business in china but only up to 50 percent share and it was made mandatory for them to
collaborate with Chinese firms. Later on, it has been taken down. A survey by the EU chamber
of commerce showed 54 percent of the EU companies operating in china felt maltreated in the
country than Chinese firms.26

23
Sherman Katz, ‘Why the WTO should constrain the power of china’s state-owned enterprises’ (Harvard Business
Review, 11 December 2017) https://hbr.org/2017/12/why-the-wto-should-constrain-the-power-of-chinas-state-
owned-enterprises accessed 5 December 2018.
24
Aris Teon, “China’s Economy, Unfair Trade, And the Role of Government” (2018) TGCJ https://china-
journal.org/2018/03/15/chinas-economy-unfair-trade-and-the-role-of-government/ accessed 5 December 2018.
25
Ibid.
26
‘EU firms want better access to china market’ (Made for minds, 19 September 2018) https://www.dw.com/en/eu-
firms-want-better-access-to-china-market/a-40572492 accessed 4 December 2018.

10
The Chinese socialist market economy other than supporting domestic players, also favours its
own State-owned enterprises (SOEs). The government exercises its control over significant
natural resources, industries and land. These enterprises are exempted from the Anti-Monopoly
Law which widens their gap with other private firms. The state has absolute power, it can do
anything with businesses. For example, it withdrew licences of around 100 joint ventures in 1996
for unspecified reasons.27

In current situation, innovation has become an important determinant to be in competition at the

global market and not only low cost manufacturing. Chinese government play a major role in
technological development. It has increased the total investment in R&D from 0.9% in 2000 to
2.0% in 2015 and has a target of reaching 2.5% by 2020. But china’s own policies have become
an impediment in its growth. First, political connections play a major role in allocation of
resources by the government; Second, as compared to the OECD countries, it spends relatively
low (4%) of total investment on basic research innovating new technology and is involved in
renewing the existing technology; Third, it places greater emphasis on quantity over quality;
Fourth, the “Great Firewall of China” prevents its researchers to access global databases like
google scholar; Fifth, foreign companies transfer technology under pressure to gain access to the
Chinese market but are at a disadvantageous position in its courts regarding IP based
judgements. The conclusion of the government’s intervention is, first, government policies are
important but does not always give the intended outcome; Second, the conflict between “political
ideology and innovation imperatives” are difficult to avoid.28

Mixed Ownership Reform

Emerged in 2015, it aimed at bringing private-sector investment and management into state-
owned companies. The reason is to make the stodgy enterprises dynamic. How it works is, a unit

27
Tim Ambler, Doing Business in China (first published 2000, 4th edn. Routledge 2017).
28
Anil Gupta and Haiyan Wang, “How China’s Government Helps – and Hinders – Innovation” (Harvard Business
Review, 16 November 2016) https://hbr.org/2016/11/how-chinas-government-helps-and-hinders-innovation
accessed 5 December 2018.

11
is selected by each company to participate in the process and a stake in that unit is sold to the
new private sector enterprises. The problem with the old model was that most of the stake was
owned by the government. The reason for it was the belief in a positive political-economy
feedback loop, the support provided by state created favourable conditions for rapid economic
growth. The government looked at individuals buying share as only financial investors and they
were given no power in company’s management or planning. But under mixed ownership
reform, investors are considered partners who can profit through their equity stake if the
partnership succeeds.29

China became a member of the world trade organization in 2001. Yet the government permits
competition in telecommunication value-added services (VAS) only among domestic companies,
such as Alibaba. Today, yahoo, google and other organizations from abroad are restricted to
minority partakes in administration sections. All telecommunications specialist providers are
required to pursue restriction laws, self-police their substance and work on the systems possessed
and overseen by the administration.

The Anti-Monopoly Law of China introduced by the Chinese government to stop the
malpractices previously going on in the country. The Law basically rests on three pillars, one is
that it regulates merger control, it requires prior government approval before companies from
abroad can make investment related to the “national security” of the nation. It has also prohibited
“monopoly agreements” which are made by big competing companies in order to benefit
themselves and alter prices. Another is the abuse of dominant market position, which prevents
businesses from charging “unfairly high prices” or selling below the cost price or using
unreasonable conditions during sales.30 Although it has made a law but its interpretation depends
solely on the state. When it charged Qualcomm with $975 million fine for violation of anti-
monopoly law. China applies its own interpretation on whether any entity violates the rule or not.

Catalogue guiding foreign investment (CGFT) sets parameters for the entrance of foreign
investment into three categories: encouraged (items are open to foreign investment and generally
receive preferential treatment, including tax incentives or simplified approval process or face

29
Yang Ge, “5 Things to Know about China’s Mixed Ownership Reform” (Caixin. 28 August 2017)
https://www.caixinglobal.com/2017-08-28/101136807.html accessed 6 December 2018.
30
‘China’s Anti-Monopoly Law’ (Mayer Brown) https://www.mayerbrown.com/experience/chinas-anti-monopoly-
law/ accessed 7 December 2018.

12
restrictions on the scope or ownership of operations, restricted and prohibited (foreign
investment not allowed).

China opened its foreign direct investment through various legislations. 31 The major motive
incorporated in many of the legislations was that “the business established within China’s
territory must be able to promote the development of China’s economy and for the benefit of
socialist modernization” which also meant that “rejection of the entities in case of non-
conformity with the national interest of the country”. 32 The increased investment activity in china
frequently causes Credit Booms. For instance, as of end 2016, total social financing exceeded
200 percent of GDP. The credit-to-GDP gap is a measure of financial vulnerability. IMF
identified “instrumental variables” approach.33 Credit used to support output growth in China. In
2001-08, GDP increased by 2 percent in response to a 10% point change in the ratio of credit to
initial GDP. Then, during 2010-15, the effect of credit on output growth fell almost to zero. This
might be the consequence of the economy becoming saturated with credit, with new credit being
allocated inefficiently, for example to overheated housing markets, inefficient state-owned
enterprises, or local government financing vehicles. It shows credit cannot effectively support
further growth of the Chinese economy.

After understanding that China intervenes so much in its economy, the question arises here is
whether this kind of government regulation affects investment efficiency or not. We will take
the example of Chinese SOEs and non-SOEs. Assume that Chinese government intervenes in
SOEs to help accomplish social and political goals such as employment, fiscal health, regional
development, social stability, etc., which alters firms’ investment behaviour and leads to
investment inefficiency. Since the legislature guarantees the control of SOEs through the
arrangement of best administrators, SOEs with politically associated officials are bound to be
interceded and to take part in speculation that does not expect to amplify firm esteem but rather
to accomplish goals favoured by the legislature. In contrast, non SOEs have a simpler goal
structure of value maximization, and they will seek political connections only if these ties bring
31
“Law of the People’s Republic of China on Chinese joint ventures (1970), Regulations for the Implementation of
the Law on Sino-foreign Equity Joint Ventures (1983).”
32
Aris Teon, “China’s Economy, Unfair Trade, And the Role of Government” (The Greater China Journal, 15
March 2018) https://china-journal.org/2018/03/15/chinas-economy-unfair-trade-and-the-role-of-government/
accessed 7 December 2018.
33
Sophia Chen and Lev Ratnovski, ‘Credit and Fiscal Multipliers in China’ (IMF, 12 December 2017)
https://www.imf.org/en/Publications/WP/Issues/2017/12/12/Credit-and-Fiscal-Multipliers-in-China-45460 accessed
7 December 2018.

13
economic benefits. Considering the powerless legitimate and monetary framework in China, we
expect that political associations may even improve speculation effectiveness in non-SOEs on
account of better venture openings offered by the legislature.34 However, the relation between
political connections and investment efficiency can be insignificant for non-SOEs if they are
motivated to seek political connections to enhance their relatively weaker position as compared
with other firms. That is, in equilibrium, the benefits of associations balance the pre-connection
disadvantages and we may not straightforwardly observe a positive relationship between political
connections and investment effectiveness.

34
Shimin Chen and Zheng Sun, ‘Government intervention and investment efficiency’ (2011) JCF 259-271
https://s3.amazonaws.com/academia.edu.documents/44133630/chen2011b.pdf?
AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1544206645&Signature=lVsDnd99ZiGvr
%2Fw88Udb3YIpIMw%3D&response-content-disposition=inline%3B%20filename
%3DGovernment_intervention_and_investment_e.pdf accessed 1 December 2018.

14
 CONCLUSION
Going by the macroeconomic conditions in China in recent times, it can be said that the Chinese
economy is going through a downturn phase with increased debt to GDP ratio, reduced trade
surplus, and real GDP rate falling.

Due to the current situation, to counter the fluctuations that has arose due to reduced growth,
China has opted for many positive measures to get back on the track of growth. The government
is moving towards greater liberalization of the economy and doing away with the conventional
policies which hampered the expansion of the economy. At a point in time, China was alleged of
intervening in the exchange rate of yuan which used to help it a lot over other countries,
especially US. But now, the US Treasury department’s denial of the same has posed a hope to
have a balanced trade with china. It may also help in avoiding the current trade war going on
between the US and china.

As both these economies are very large, any problem in them will affect the whole world.
China’s joining of World Trade Organization has made many significant changes in its treatment
of foreign businesses in the country. At the end, Xi Jinping’s becoming the president for life may
cause various changes in the economic and political scenario of the country.

15
 BIBLIOGRAPHY

Articles

1. Alexandra Stevenson, ‘China to Pump $175 Billion into Its Economy as Slowdown and
Trade War Loom’ (The New York Times, 7 October 2018) <
https://www.nytimes.com/2018/10/07/business/china-lending-trade-war.html> accessed 6
December 2018.

2. Alexandra Stevenson, ‘China’s Growth Hits Slowest Pace in a Decade’ (The New York
Times, 18 October 2018) https://www.nytimes.com/2018/10/18/business/china-economy-
third-quarter.html accessed 6 December 2018.

3. Andrew Beattie, ‘Spillover Effect’ (Investopedia, 21 March 2018)

https://www.investopedia.com/terms/s/spillover-effect.asp accessed 5 December 2018.

4. Anil Gupta and Haiyan Wang, ‘How China’s Government Helps – and Hinders –
Innovation’ (Harvard Business Review, 16 November 2016)
https://hbr.org/2016/11/how-chinas-government-helps-and-hinders-innovation accessed 5
December 2018.

5. Aris Teon, ‘China’s Economy, Unfair Trade, And the Role of Government’ (The Greater
China Journal, 15 March 2018) https://china-journal.org/2018/03/15/chinas-economy-
unfair-trade-and-the-role-of-government/ accessed 7 December 2018.

6. Capital Linguists, ‘The Current State of the Chinese Economy’ (Capital linguists)
https://capitallinguists.com/the-current-state-of-the-chinese-economy/ accessed 4
December 2018.

16
7. China’s Anti-Monopoly Law’ (Mayer Brown)
https://www.mayerbrown.com/experience/chinas-anti-monopoly-law/ accessed 7
December 2018.

8. Enoch Yiu, ‘Yuan stabilises but doubts over how long the calm can last’ (South China
Morning Post, 19 February 2016) https://www.scmp.com/business/money/money-
news/article/1914081/yuan-stabilises-doubts-over-how-long-calm-can-last accessed 6
December 2018.

9. EU firms want better access to china market’ (Made for minds, 19 September 2018)
https://www.dw.com/en/eu-firms-want-better-access-to-china-market/a-40572492
accessed 4 December 2018.

10. Gabriel Wildau and Shawn Donnan, ‘US demands China cut trade deficit by $200 bn’
(Financial Times, 4 May 2018) https://www.ft.com/content/d0eb3e4a-4f77-11e8-a7a9-
37318e776bab accessed 3 December 2018.

11. Ira Kalish, ‘China’s economy cools as US trade tension heats up’ (Deloitte Insights, 10
July 2018) https://www2.deloitte.com/insights/us/en/economy/asia-pacific/china-
economic-outlook.html#endnote-sup-3 accessed 6 December 2018.

12. Ismail Shakil, ‘China not a currency manipulator according to US Treasury’s internal
findings’ (Reuters, 12 October 2018) https://in.reuters.com/article/us-usa-trump-china-
yuan/china-not-a-currency-manipulator-according-to-u-s-treasurys-internal-findings-
media-reports-idINKCN1MM02E accessed 6 December 2018.

13. Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United
States (October 2018) https://home.treasury.gov/system/files/206/2018-10-17-%28Fall-
2018-FX%20Report%29.pdf accessed 7 December 2018.

17
14. Omkar Godbole, ‘PBOC set the Yuan reference rate at 6.8792’ (FXSTREET, 28
September 2018) https://www.fxstreet.com/news/pboc-set-the-yuan-reference-rate-at-
68792-201809280116 accessed 7 December 2018.

15. PTI, ‘China’s debt rises to USD 2.58 trillion’ (Economic times, 23 September 2018)
https://economictimes.indiatimes.com/news/international/business/chinas-debt-rises-to-
usd-2-58-trillion/articleshow/65923608.cms accessed 6 December 2018.

16. Rida, ‘China October Trade Surplus Smaller than Expected’ (Trading Economics, 8
November 2018) https://tradingeconomics.com/china/balance-of-trade accessed 7
December 2018.

17. Robert E. Scott, ‘Exchange rate policies, not high wages, are why US lags China and
Germany in export performance’ (Economic Policy Institute, 2 December 2015)
https://www.epi.org/publication/exchange-rate-policies/ accessed 6 December 2018.

18. S.R., ‘Why China’s economy is slowing’ (The economist, 11 March 2015)
https://www.economist.com/the-economist-explains/2015/03/11/why-chinas-economy-is-
slowing accessed 3 December 2018.

19. Sherman Katz, ‘Why the WTO should constrain the power of china’s state-owned
enterprises’ (Harvard Business Review, 11 December 2017) https://hbr.org/2017/12/why-
the-wto-should-constrain-the-power-of-chinas-state-owned-enterprises accessed 5
December 2018.

20. Shimin Chen and Zheng Sun, ‘Government intervention and investment efficiency’
(2011) JCF
https://s3.amazonaws.com/academia.edu.documents/44133630/chen2011b.pdf?
AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1544206645&Signature=l
VsDnd99ZiGvr%2Fw88Udb3YIpIMw%3D&response-content-disposition=inline%3B

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 %20filename%3DGovernment_intervention_and_investment_e.pdf accessed 1 December
2018.

21. Sophia Chen and Lev Ratnovski, ‘Credit and Fiscal Multipliers in China’ (IMF, 12
December 2017) https://www.imf.org/en/Publications/WP/Issues/2017/12/12/Credit-and-
Fiscal-Multipliers-in-China-45460 accessed 7 December 2018.

22. The Globalist, ‘China vs. The US: The GDP Race’ (The Globalist, 13 April 2018)
https://www.theglobalist.com/china-united-states-gdp-economy/ accessed 5 December
2018.
23. Yang Ge, ‘5 Things to Know about China’s Mixed Ownership Reform’ (Caixin. 28
August 2017) https://www.caixinglobal.com/2017-08-28/101136807.html accessed 6
December 2018.

Books

1. Tim Ambler, Doing Business in China (first published 2000, 4th edn. Routledge 2017).

Reports

1. National bureau of statistics China http://www.stats.gov.cn/english/

2. PBOC, ‘Report on aggregate financing to the real economy (flow) in May 2018’ (The
People's Bank of China) http://www.pbc.gov.cn/english/130721/3559373/index.html
accessed 2 December 2018.

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