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| 1 |
ID:
135979
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| Summary/Abstract |
This paper focuses on a conventional debate regarding whether Chinese outward direct investors tend to invest in countries with high political risk. Using 2003–2011 data from the World Bank, the Heritage Foundation and the KOF Swiss Economic Institute, we investigate China's political risk distribution and political risk index (PRI). Our results indicate that China's political risk index was ranked 48th among 153 economies in 2011, in the lower risk level of the PRI spectrum. In an international comparison of political risk distribution, the proportion of Chinese outward direct investment (ODI) among countries with high political risk is less than the world average. The Chinese ODI political risk index has significantly improved and remains lower than the world average. To improve Chinese ODI PRI, the Chinese Government should continue to implement differentiation strategies and to offer official development assistance to improve the investment environment in developing countries and reduce political risk.
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| 2 |
ID:
114792
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| Publication |
2012.
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| Summary/Abstract |
Using principal component analyses, this paper constructs two internationalization indices for the renminbi (RMB) and 32 other major currencies. We find that the RMB's currency internationalization degree index (CIDI) is still low, and far behind the 4 most important international currencies. In 2009, it was ranked 18th among all important international currencies. However, in terms of the currency internationalization prospect index (CIPI), the RMB has remained the world's fifth highest since 2006. Although it is still far behind the US dollar and the euro, surpassing the ranking of the yen and the pound is possible in the near future. The dramatic difference in the ranking between the CIDI and the CIPI is a result of China's tight capital account control, the usage continuity of international currency due to network externalities, and the narrow foreign exchange and imperfect financial markets. Hence, to a large degree, the RMB's potential as an international currency depends on China's capital account liberalization.
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