Readjustments to trade and investment dependency on China in global supply chains
The spectacular rise of China as one of the world’s leading exporters poses a risk to global supply chains where it is the dominant producer of vital goods, e.g. advanced battery cells. Disruptions to international trade flows by the global pandemic and climate crisis have exposed the urgent problems of the world’s overdependence on Chinese production and investment in certain sectors. As several countries respond with a shift towards a new protectionism, it is crucial for policymakers to consider potential risks and opportunities as well as the future role of the World Trade Organisation (WTO).
Dr Camilla Jensen is leading a comparative study of the approaches taken by the US, EU and other countries in reducing their trade and investment dependency on China. The team of researchers are producing three self-contained reports that separately deal with the details and rationale of protectionist and diversification policies towards China; the evidence of their impact on trading and investment patterns with China; their compliance with WTO obligations.
The project therefore aims to provide a detailed analysis of the current trends in international trade policies towards China and their effects, as well as their potential implications for the international trading system.
-The researchers will conduct wide-ranging desk-based research of existing literature and data. They will also contact experts in academia, international organisations and the Foreign, Commonwealth and Development Office (FCDO) of the UK Government to build a detailed timeline and descriptive analysis of US, EU, Japanese and other trade policies towards China.
-The project will also involve direct analysis of trade data relating to China to evidence the effects of international trade policies towards China.
-A comparison of trade policy timelines with the WTO’s complaint database as well as retaliatory Chinese policies will enable identification of an escalation of ‘trade war’ scenarios.
Impact and Outreach
Civil servants in the FCDO will directly benefit in their work on Chinese trade policy and the UK’s engagement with China. UK firms and workers involved in trade with China and the Indo-Pacific will also benefit from more informed policymaking.
Funding is provided by the FCDO. Other researchers on the team include Michael Gasiorek, Yohannes Ayele and Qingxiu Bu.