Beijing International Assignment

Autumn 2009

CONTACT
Faculty
Emre Ozdenoren and Richard Portes
Room: P322

Room: P318

Administrators
Anne Sandford and Becky Coggins
AIMS, OBJECTIVES, ISSUES

The recent growth of Chinese economy remains a unique and remarkable economic story of our generation. The goal of this trip, among others, is to get a better understanding of the growing Chinese economy, the opportunities and challenges that it presents. Thee are major macroeconomic issues regarding, for example, monetary policy, exchange-rate policy, consumption and savings, and growth strategy; and microeconomic issues such as foreign trade, innovation, entrepreneurship, state v. private sector, competition policy, and regulation. All these have been accentuated by the global crisis and the Chinese response. The political context, too, is highly relevant and very complex.

FORMAT

During the international assignment you will visit companies in Beijing such as Lenovo, Tiandi Energy, Viatech, CAMCO, and others. You will also visit financial institutions such as People’s Bank of China, HSBC, and Bank of China. You will get a chance to meet experts on the Chinese economy at Beijing University as well as MBA students from Beijing University. Last but not least you will get the opportunity to learn about the Chinese culture.

There are two briefing sessions. One session will be led by Emre Ozdenoren on Friday 27 November, 1130 - 1245, LT4. This session will provide a microeconomic perspective on the Chinese economy. The second session, on Friday 4 December, 1845-2100, LT4, will include information on the logistics for thetrip, a session onMacro Economics led by Richard Portes and a China Culture briefing with a guest speaker.

Your grade in this course will be based on a group project (see below). On Thursday 17 December there will be a mandatory working group dinner at the Hyatt.

RECOMMENDED READINGS

There is one textbook (Capitalism with Chinese Characteristics (2008) by Yasheng Huang) and several articles for background reading - these are not compulsory but you may wish to read a selection prior to the trip. Articles are listed below. The textbook will be provided at the briefing sessions.

1) Nicholas Lardy, Financial Repression in China, Peterson Institute Policy Briefing PB 08-8, September 2008 – An excellent short piece on Chinese financial sector, with some macro implications.

2) Nicholas Lardy, ‘Sustaining Economic Growth in China’, Ch. 6 of China's Rise: Challenges and Opportunities -- C. Fred Bergsten, Charles Freeman, Nicholas R. Lardy, Derek J. Mitchell. Peter G. Peterson Institute for International Economics, 2008 - Authoritative treatment of Chinese growth path (mainly macro, but some sectoral stuff).

3) ‘How much of China’s exports is really made in China?’, R. Koopman, Z Wang, S-J Wei, VoxEU 8 August 2008 - Very short piece on value added in Chinese exports.

4) ‘China’s savings rate’, Goldman Sachs Economic Paper 191, October 2009 - Substantial piece, macro – RP not entirely in agreement, but worth reading.

5) ‘Quarterly update’, World Bank Beijing, November 2009 – An extended summary of current state of Chinese economy, covering macro and micro.

6) N. Roubini, ‘Why China should abandon its dollar peg’, January 2007 - For the rest of the world – especially the US – this is the big issue with China.

7)‘Democracy with Chinese characteristics’, Ch. 3 of China's Rise: Challenges and Opportunities -- C. Fred Bergsten, Charles Freeman, Nicholas R. Lardy, Derek J. Mitchell. Peter G. Peterson Institute for International Economics, 2008 - The political background.

8) J. Pisani-Ferry and A. Sapir, ‘Eight potential roadblocks to smooth EU-China relations’ - A European perspective.

9) M. Pettis, ‘Can China adjust to the US adjustment?’, December 2008 - Author is a Western academic teaching in China. The issue is ‘global imbalances’.

10) B. Setser, ‘China’s $1.5 Trillion Bet: Understanding China’s External Portfolio’, Council on Foreign Relations, May 2009 - Want to know where all those dollar holdings are?

ASSESSMENT

You will be split into ten groups and each group will receive a group project. You will be assessed based on this group project. The purpose of this assignment is to get a better understanding of the Chinese economy and the Chinese market. The projects are based on issues that firms and policy-makers in China face today.

The report should not exceed 1500 words, with a displayed word count. Please count also words in text boxes, tables or other inserted objects. The body of the report should give a detailed credit to the sources of information used. In addition, at the end of the report you should include an appendix with a reference list of all the sources (bibliographic, electronic, or other) used to prepare the report. This reference list is beyond the 1500 word limit. Please do not include additional appendices. The word limit is deliberately tight and should not reduce effort! It is intended to impose discipline – you must be concise and to the point, without (for example) any general introduction. It will have to be a group effort – with seven or eight in a group, you will not be able just to divide it up with each person writing 200 words and a simple assembly of those contributions.

Both members of faculty will mark every Group Report. The academic content of the report should be guided by the grading criteria set out below, firstly as a list of distinct criteria and secondly as a suggested set of gradations of quality within the criteria. The apportioning of the marks between the criteria is shown:

1. / Problem Definition
(10) / The report addresses a question of significance to the business and frames the question in a way that analysis, proposition and testing are needed to provide a solution.
2. / Use of reference frameworks and academic disciplines
(20) / The reference frame for analysing the question and shaping the solution draws directly on the learning from your Programme.
3. / Linking knowledge and practice
(25) / The report demonstrates the links between knowledge and logical deductive processes, their application to the question, and the data available or obtained.
4. / Answering the question
(30) / The report provides conclusions from the analysis. They should draw on appropriate theory and should be convincing as a well thought out report.
5. / Presentation
(15) / The report is well presented and structured.

Late submission

If a group has no extenuating circumstances but chooses to submit late, they will receive the following penalties:

Zero to two working days late – 5 point reduction

Three to five working days late – 8 point reduction

Six to nine working days late – 10 point reduction

More than nine working days late - Fail

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