PUBLICATIONS BY Derek Scissors, Ph.D.
Commentary
Research
2009 Commentary
August 11, 2009
Chinese Foreign Investment: How Much and Where?
By Derek Scissors
Available data provide only a partial answer to the question of exactly how much China is spending overseas. We know that China's acquisition of overseas assets using accumulated foreign currency, though extremely large, is far from the largest in the world.
June 15, 2009
Drowning in Cash, Chinese Foreign Investment: Who, What and Why--Part 1 of 3
By Derek Scissors
China made headlines by becoming the largest foreign holder of US Treasury bonds at the end of September 2008, and it was already the largest foreign holder of other US public debt. In the last few years, the People’s Republic of China (PRC) has invested over USD 100 billion in Africa, the Middle East and elsewhere. The current financial crisis further highlights the role of Chinese bond investment in the US economy and prompts questions about whether Chinese investment in equities or other assets would be helpful as well. Some in the US Congress are concerned that China will stop buying American bonds. At the same time, there is alarm over the extension of Chinese investment beyond bonds in the US and around the globe.
May 04, 2009
Liberalization in Reverse
By Derek Scissors
The year 2008 marked the 30th anniversary of the beginning of market reforms in China -- and perhaps the third anniversary of their ending. Since the present Chinese leadership took power, market-oriented liberalization has been minor. And as such policies have wound down, they have been supplanted by renewed state intervention: price controls, the reversal of privatization, the rollback of measures encouraging competition, and new barriers to investment.
April 29, 2009
Deng Undone
By Derek Scissors
The global crisis has prompted a great deal of talk about China. Most of it, however, starts from a faulty premise: that the People's Republic is still moving toward a market economy. In fact, late 2008 marked the 30th anniversary of the beginning of market reforms — and perhaps the third anniversary of their ending.
April 20, 2009
China's Stimulus: More of the Same, and Not That Much More
By Derek Scissors
OK, it's only most of what you know that's wrong -- but that's as far as I'm going. A few investors and writers (including some on Fool.com) assess the stimulus as likely to lead to a People's Republic of China (PRC) that is stronger than ever. Fool advisor Tim Hanson went so far as to say that it could "change the world."
March 16, 2009
China is a banker over a barrel
By Derek Scissors
Trade, human rights, North Korea, naval standoffs ... America and China have plenty to talk about.
2008 Commentary
November 26, 2008
China: Not Quite a 'Lifeline'
By Derek Scissors
Fareed Zakaria 's Nov. 24 op-ed, "Lifeline from Beijing," included a number of popular misconceptions. To dispel the first: China did not become our largest foreign creditor in September; it became the largest holder of Treasury bonds. China has been the largest holder of U.S. public debt for several years. In September, it merely switched from agency debt to Treasurys.
2009 Research
November 12, 2009
President Obama Has a Full Plate in First Visit to China
By Derek Scissors, Ph.D
(WebMemo #2696)
President Obama's visit to China comes during a period of substantial and possibly growing economic tension.
November 09, 2009
Taiwan's Economy Needs More Than Cooperation with China
By Derek Scissors, Ph.D.
(WebMemo #2691)
More open Taiwanese trade and investment with China fits the principles of American foreign policy. The U.S. should assist Taiwan in this effort, starting with U.S.-Taiwan trade and investment.
November 02, 2009
Ten Things about China and Climate Change
By Derek Scissors, Ph.D.
(Special Report #68)
With Copenhagen conference looming, the U.S. must be realistic about carbon emissions and China.
August 13, 2009
India's Future in the Balance
By Michelle Kaffenberger and Derek Scissors, Ph.D.
(WebMemo #2586)
The Indian federal legislature has approved a bill mandating free public education for all citizens.
July 20, 2009
U.S.-China Trade: Do's and Don'ts for Congress
By Derek Scissors, Ph.D.
(Backgrounder #2299)
Congress is correct to criticize the PRC as a nonmarket economy, but its proposed remedies are often misguided. Blocking Chinese imports would merely force production to relocate to other low-cost national producers. The best U.S. policy would be to cut and simplify corporate taxes and push the PRC to reduce support of its enterprises, especially subsidized financing and protection from competition.
July 16, 2009
China Refuses to Adjust Its Economy
By Derek Scissors, Ph.D.
(WebMemo #2546)
For those worried that China is rising to replace a declining America, take heart: If the U.S. is headed in the wrong economic direction, the PRC is moving in that same direction--only faster.
July 13, 2009
India Heads in the Wrong Direction with New Budget
By Derek Scissors, Ph.D.
(WebMemo #2541)
The Indian government budget for the next fiscal year puts political gain over long-term economic progress.
May 28, 2009
Japan's Economic Failure and America's Economic Risk
By Derek Scissors, Ph.D.
(WebMemo #2459)
The Japanese economic policy of the past two decades provides a critical example to an America caught in a financial crisis.
May 26, 2009
China Global Investment Tracker
By Derek Scissors, Ph.D.
(White Paper #9999)
The China Global Investment Tracker created by The Heritage Foundation is the only available comprehensive dataset relating to large Chinese foreign investments and construction contracts in all areas of the world. Details are available on all attempted transactions over $100 million in a variety of industries, including energy, transportation and banking.
May 22, 2009
Japan's Economic Weakness: A Security Problem for America
By Bruce Klingner and Derek Scissors, Ph.D.
(WebMemo #2456)
Japan's dismal economic performance is constraining American efforts to induce Tokyo to adopt a larger security role.
May 15, 2009
U.S.-India Relations: Ensuring Indian Prosperity in the Coming Demographic Boom
By Derek Scissors, Ph.D., and Michelle Kaffenberger
(Backgrounder #2274)
The U.S. has not played an important role in Indian economic development, but could help to identify crucial areas for economic liberalization and establish channels for private education financing. Demographic and economic conditions make primary and secondary education vital to India's future. With the public education system in tatters, the government needs to allow private education to contribute far more.
May 15, 2009
Executive Summary: U.S.-India Relations: Ensuring Indian Prosperity in the Coming Demographic Boom
By Derek Scissors, Ph.D., and Michelle Kaffenberger
(Executive Summary #2274)
Executive Summary: The U.S. has not played an important role in Indian economic development, but could help to identify crucial areas for economic liberalization and establish channels for private education financing. Demographic and economic conditions make primary and secondary education vital to India's future. With the public education system in tatters, the government needs to allow private education to contribute far more.
April 01, 2009
A U.S.-China G-2: Today It's Closer to a G-0
By Derek Scissors, Ph.D.
(WebMemo #2374)
The G-20 convenes again this week, once more generating high hopes that progress can be made in addressing the economic crisis. Observers have focused on the U.S. and the PRC as the world’s largest and most extensive economic relationship, a G-2.
March 05, 2009
China Will Follow the U.S.: A Climate Change Fable
By Derek Scissors, Ph.D.
(WebMemo #2327)
President Obama's emphasis on climate change has notable implications for U.S.-China relations.
March 03, 2009
Testimony before the U.S.-China Economic and Security Review Commission on China’s Role in the Origins of and Responses to the Global Recession
By Derek Scissors
(Testimony #9999)
Addressing the effect of the current economic crisis on the U.S.-China economic relationship presumes an understanding of the crisis and the relationship. This is plainly a matter for debate but, for the purposes of my testimony, the single biggest contributor to the crisis is an overly loose American monetary policy which began in late 2002.
February 23, 2009
Two Lost Decades? Why Japan’s Economy Is Still Stumbling and How the U.S. Can Stay Upright
By Derek Scissors, Ph.D. and J. D. Foster, Ph.D.
(WebMemo #2307)
A weak Japanese economy is again making Americans nervous. The U.S. risks its own prolonged period of weakness if it fails to correct the policies that have contributed to excessive trade deficits and reliance on foreign saving.
February 13, 2009
Secretary Clinton's Asia Trip: Imbalances in the U.S.–China Economic Relationship
By Derek Scissors, Ph.D.
(WebMemo #2292)
There is new and important context to Secretary Clinton's trip to Asia next week. New data make it clear that the huge imbalances in the U.S.-China economic relationship are likely to persist; they may even expand.
February 04, 2009
Chinese Foreign Investment: Insist on Transparency
By Derek Scissors, Ph.D.,
(Backgrounder #2237)
China holds more than $1 trillion in American bonds. According to the new Heritage Foundation database on recent Chinese foreign non-bond investment, China has invested more than $15 billion in the U.S. in addition to bonds. China’s SAFE is the largest foreign investor in the U.S., but has refused to make its activities more transparent. An American priority should be to enhance transparency in SAFE’s spending.
February 04, 2009
Executive Summary: Chinese Foreign Investment: Insist on Transparency
By Derek Scissors, Ph.D.,
(Executive Summary #2237)
China holds more than $1 trillion in American bonds. According to the new Heritage Foundation database on recent Chinese foreign non-bond investment, China has invested more than $15 billion in the U.S. in addition to bonds. China’s SAFE is the largest foreign investor in the U.S., but has refused to make its activities more transparent. An American priority should be to enhance transparency in SAFE’s spending.
January 27, 2009
The U.S.–China Economic Relationship: In Need of Counseling, Not Divorce
By Derek Scissors, Ph.D.
(WebMemo #2249)
The process of demonizing the U.S.-China economic relationship has begun.
January 23, 2009
Key Questions for Ron Kirk, Nominee for United States Trade Representative
By Daniella Markheim and Derek Scissors, Ph.D.
(WebMemo #2239)
In order to determine where the next U.S. Trade Representative stands on crucial issues, these questions should be put to the nominee during his confirmation hearing.
January 22, 2009
The Truth About China's Growth
By Derek Scissors, Ph.D.
(WebMemo #2238)
China just announced its economic results for 2008. The only thing certain about these figures is that they are wrong.
2008 Research
December 12, 2008
The Coming U.S.–China Trade Conflict
By Derek Scissors, Ph.D.
(WebMemo #2172)
A storm is brewing and the media and public are starting to hear the first rumbles of thunder. The American economic slump is running into the Chinese economic slump, creating the conditions for a face-off between Beijing and the U.S. Congress, possibly leading to destabilization of the world's most important bilateral economic relationship. If a clash is to be averted, the U.S. must find a way to make the Strategic Economic Dialogue and other discussions with China more productive while channeling trade complaints into more frequent use of the WTO and WTO-compliant enforcement mechanisms. Otherwise, first American, then global, protectionism could spiral out of control.
November 19, 2008
China Gets Greener? Power and Growth Data Cannot Be Trusted
By Derek Scissors, Ph.D.
(WebMemo #2136)
In October, China's power consumption declined for the first time this decade. The data supporting such a conclusion are slippery, to say the least. Consequently, there are compelling reasons to be skeptical of both the power consumption numbers and, perhaps more important, GDP.
November 10, 2008
China's Stimulus Plan: Repackaged and Misdirected
By Derek Scissors, Ph.D
(WebMemo #2128)
On November 9, China launched a widely anticipated stimulus program comprising no less than 16 percent of China’s annual GDP, or $586 billion. This percentage is an eye popping figure, which is exactly the intended effect. In substance, the program is largely a repackaging of previous measures designed to immediately bolster domestic confidence and spin Chinese participation in the upcoming G-20 global financial meetings.
October 21, 2008
U.S.—China Economic Dialogue: In Need of Tough Love
By Derek Scissors, Ph.D.
(Backgrounder #2200)
The importance and multifaceted nature of the U.S.–China economic relationship call for an overarching institutional mechanism, such as the Strategic Economic Dialogue (SED). China’s market reforms stopped about three years ago. American engagement that presumes ongoing market reform in China is flawed. It must focus on a narrow range of meaningful reform that is feasible in the current context.
October 21, 2008
Executive Summary: U.S.—China Economic Dialogue: In Need of Tough Love
By Derek Scissors, Ph.D.
(Executive Summary #2200)
The importance and multifaceted nature of the U.S.–China economic relationship call for an overarching institutional mechanism, such as the Strategic Economic Dialogue (SED). China’s market reforms stopped about three years ago. American engagement that presumes ongoing market reform in China is flawed. It must focus on a narrow range of meaningful reform that is feasible in the current context.
September 26, 2008
Chinese Investment (Mostly) Welcome
By Derek Scissors Ph.D.
(WebMemo #2081)
If transparency can be achieved, China’s outward investment could be a large net positive for business, reintroducing capital otherwise tucked away. Without transparency, the world will continue to be suspicious of China’s intentions and headlines exposing political or other dubious motives will generate increasing levels of political heat.
August 29, 2008
Industry v. Environment: China May Choke on Its Own Growth
By Derek Scissors, Ph.D.
(WebMemo #2039)
The People’s Republic of China (PRC) must improve its environment in order to sustain growth. The Chinese economy is far more efficient than it was 30 years ago, but its much-heralded expansion has placed unprecedented strain on natural resources and is now beginning to menace public health. Regardless of whether its economic size ever rivals or surpasses that of the U.S., China may very well match the now extinct USSR’s astounding levels of environmental degradation, inefficient indigenous industry, and eventual economic stagnation.
August 21, 2008
People, Growth, And Reform: China's Uncertain Future
By Derek Scissors, Ph.D.
(WebMemo #2032)
With the wrong policies, the much-heralded era of Chinese economic leadership could stop almost before it starts.
August 14, 2008
Weighing Chinese Manufacturing Strength
By Derek Scissors, Ph.D.
(WebMemo #2023)
On August 10, The Financial Times reported a forecast by Global Insight projecting that the People's Republic of China would surpass the U.S. in 2009 in manufacturing. In real, inflation-adjusted terms, this is jumping the gun. Even so, given current trends, it is not a question of if China surpasses the U.S. in manufacturing; it's really a matter of when. But the when is far enough away that we have time to better understand what it means for America.
November 20, 2009
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