The role of Japanese FDI in China

María Latorre () and Nobuhiro Hosoe

Journal of Policy Modeling, 2016, vol. 38, issue 2, 226-241

Abstract: We quantify the impacts of a sharp fall of Japanese foreign direct investment (FDI) to China that occurred after the worldwide financial crisis in 2009 using a three-region (Japan, China, and the rest of the world) recursive dynamic computable general equilibrium model with multinational enterprises (MNEs). The FDI fall would reduce exports and production of Japanese MNE affiliates in China and depreciate the Renminbi. This latter effect would favor Chinese manufacturing, but China, would not be a gainer, because it would experience a contraction in its service sector, which would exceed the gains in manufacturing.

JEL-codes: C68 F17 F21 F23 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:38:y:2016:i:2:p:226-241

DOI: 10.1016/j.jpolmod.2016.02.003

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