Geraci attended China Financial Summit 2017 conference, today in Beijing. In his speech, he said Foreign investors are a little reluctant to invest in the Chinese market especially A-Shares for many reasons. Geraci also believes that Chinese interest rates are not high enough to compensate for risk. Moreover, he thinks it is more difficult for China to export its infrastructure model to foreign countries because foreign governments have no control over infrastructure development.
Geraci was a guest speaker at CGTN dialogue to comments on the issue.
G7 did not achieve its main goal because it was squeezed in between the Silk road summit in Beijing and forthcoming G20 meeting in Germany, and of course it was of the interest of Germany to make sure that the G7 held in Italy was not going to be successful so that Germany could get all the credit for any international agreement during her G20.
Today, in a short commentary written for Radiocor/IlSole24Ore, I discuss the issue of migrant flow into Europ and its impact on the economy of the host country. Everyone asks the question “Do migrants bring positive or negative benefits to the receiving country?”. The short answer is it depends on a number of variables and generalisation across the globe would be mis-leading. However, narrowing the focus on the Mediterrenan migrant flow into Italy, one can almost certainly affirm that in the short term, the impact is negative and that in the long term it is, at best unclear. The impact may potentially be positive only under a strict set of assumptions, that need to be carefully analysied before making irreversible decisions.
In one of my Op-Eds written for Radiocor- IlSole24Ore, Moody’s fa i conti e si allinea alla realtà dei fatti， I talked about Moody’s choice to align itself with the reality when China’s sovereign debt was downgraded from A1 to Aa3. China’s state bonds market is, currently, a non-market: the trading volume is low and the main players are state banks that buy bonds issued by the government and, almost always, they keep them in the portfolio until they expire.
Prof Bagnai makes some important points in his article written for IlSole24Ore. The one that I find most interesting is that many economists and politicians, today, when discussing about the future of the Euro, hold the view that There Is No Alternative and that history is linear and we can only go forward. Those who maintain this view are probably not well informed or, worse, say so to hide what they really think. I would just add that Dornbursch, my economic Professor at MIT, used to tell me that disaster takes longer to materialize than we expect, but then it happens suddenly.
Last Friday, the Pangoal Institution and TWAI organized the conference “The Belt and Road Initiative and China-EU Economic and Trade Ties.” Guests included Former Prime Minister of Italy, Former President of the European Commission Romano Prodi, President of the Pangoal Institution Yi Peng, Professor from Peking University Enrico Fardella, Former Deputy Administrator of State Administration of Taxation Xu Shanda, Professor of Applied Economics, University of Ferrara Giorgio Prodi and Head of China Economic Policy Program Michele Geraci. We discussed future cooperation between China and EU under One Belt and one Road.
Minister of Industry and Information Technology, Miao Wei, during the National People Congress said that China welcomes foreign companies to compete openly with domestic companies within the framework of CM2025. He said the market is going to play a significant role in company selection and resources allocation. All companies will be treated equally. “Adhere to the government-led, market oriented” is the principle of CM 2025 initiative. Foreign direct investment in the manufacturing industry has peaked in 2011 at 50%, and since then declined to reach 43% in 2015. Worth noticing is how the proportion of foreign direct investment in the service industry has grown substantially over the last five years.
The European Chamber in China has just released a report commenting the “Made in China 2025” plan pursued by the Chinese Government. The report indicates the current challenges for CM 2025. One is the lack of skilled labors. The second challenge is overcapacity as a result of government subsidy over the past years. The third one is the challenge to international markets. I think another reason of worry is that most of the MA activity carried out by Chinese companies overseas, has actually been driven by the government encouragement. Therefore, it further represents market distortions.