3. Electronic Theses and Dissertations (ETDs) - All submissions
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Item An opportunity cost Analysis of the Africa-One China Nexus, 2001-2016(2018) Ndzendze, BhasoUnlike in previous timeframes, between 2000 and 2016 no African state switched its recognition from the People’s Republic of China (PRC) to the Republic of China/Taiwan (ROC); but six switched in the opposite direction. Why was this the case? This thesis investigated the extent to which there was an opportunity cost for those African states (Liberia, Chad, Senegal, Gambia, Malawi, and São Tomé and Príncipe) in recognising the ROC as the “one China” over the People’s Republic of China in the period between 2001 and their respective year of switching, which in turn could explain the direction of the switches. In this thesis, opportunity cost, through time series and multiple comparative trade analyses, was operationalised as a relative economic loss (as measured through relative trade volumes, investment and aid) incurred that could have otherwise been avoided or compensated for by recognising the PRC over the ROC as the One China. The thesis found that in the timeframe studied, on average after three years, five out of six African countries (with the exception of São Tomé and Príncipe) that had previously recognised the ROC saw exponentially increased trade volumes with the PRC once they affected a switch in recognition from the ROC to the PRC (some saw this sooner). This is due to a number of factors; recognising the PRC is concomitant with entering into politically-enhanced bilateral economic relations at the behest of the PRC, at once a centralised state heavily involved in outward investments (thought the CDB and the EximBank) and the world’s second-largest economy. Those states which still recognise the ROC (presently only Burkina Faso and Swaziland) can be said to still do so in large part due to the fact that there has been a continual culling of allies and therefore a decrease in an “aid burden” on the comparatively economically stagnant ROC, since these six states have switched their recognition as well as being the recipients of “special attention” from the ROC government, not otherwise granted to the former allies. Thus while there can be said to be an opportunity cost, it can also be said to be bidirectional; without the one China problem, there would be, all other things being equal, no entities which would be highly motivated to dole out costly aid (at an opportunity cost) in the process of “dollar diplomacy”, especially since Taiwanese aid to its allies has been found in the thesis to increase, at least immediately, after an ally has switched towards the PRC. In other words, the enhanced trade and aid-giving are a means to an end rather than ends in themselves – were the one China issue resolved, there would be marginally fewer motivations for their continuation outside of commercial aims. This was seen, for example, during the 2008-2015 “diplomatic truce,” during which the PRC and the ROC experienced a thaw in their relations and temporarily seemed to be approaching rapprochement, as indicated by the signing of the PRC-ROC Economic Cooperation Framework Agreement, and at the same time did not attempt to lure each other’s allies with prospectively higher financial gains for so doing. In that sense, the opportunity cost is clearly there for both the PRC and the ROC as well as for African states as a result. This falls within, as well as practically vindicates, structural realist theorists such as Evera (1999) and Mearsheimer (2001) who assert that states, big and small, are rational agents (seeking to minimise costs and expand benefits), as well as relative gains-increasing actors.Item To what extent has China’s FDI in the Zambian copper mining industry contributed to the development of mining towns in the country?: a comparative case study(2018) Chisiza, Matebe MaryThis paper explores how Chinese Foreign Direct Investment (FDI) into the Zambian copper mining industry has impacted development in mining towns, specifically in Chambishi, Kalulushi and Luanshya. Chinese FDI in Zambia began around the early 2000s and has maintained a heavy presence over the years, for the purpose of measuring its impact the paper will be working around the timeline from 2005-2015, and because development has various definitions depending on the source, I will focus on some of the most agreed upon parameters of development: infrastructure (roads and bridges), social development (formal employment creation, recreational centres, technology and skills transfer, and state revenue) and human development (education, welfare). The study also explores FDI from other firms in the country and whether the lack of corporate social responsibilities laws in Zambia, contributes to development or the lack thereof. The purpose of the study is to assess whether Chinese FDI in the copper mining industry is having a positive impact in the towns where it most concentrated and if this benefits majority of the town’s residents. The study employed a mixed design of qualitative and quantitative, where survey questionnaires were used to gather the data and the data analysed assisted in answering the initial hypothesis: Chinese FDI has had a positive impact on development.Item Market intergration and currency risk pricing in chinese mainland and equity market: evidence from Shanghai-Hong Kong stock connect(2018) Lei, WeiThis paper investigates the two topics of market integration and currency risk pricing in the Chinese mainland equity market. It also examines the impact of liberalization policies, including currency reform and Shanghai-Hong Kong Stock Connect on the two topics. This paper employs both an unconditional multi-beta pricing model under the International Arbitrage Pricing Theory framework, and a conditional pricing model using the multivariate GARCH-in-Mean setup. Using both monthly data and weekly data covering the period through January 2001 to September 2017, I find both world market risk and Chinese local market risk are positively priced in the Chinese mainland equity market, providing evidence of partial integration. A weak upward trend is detected for the low correlation between the Chinese mainland equity market and the world market. Currency risk is found to be negatively priced with a time-varying price. While world market risk and currency risk constitute essential components of the long-run total risk premium in the Chinese mainland equity market, local risks remain the dominant source in determining the short-run variations in the total risk premium. A structural shift in risk pricing is detected after the currency reform for both world market risk and currency risk, making the positive price of world market risk more positive and the negative price of currency risk even more negative. Although foreign participation has increased rapidly after Shanghai-Hong Kong Stock Connect, there are no significant changes observed in the pricing process. These findings suggest that international investors can still enjoy diversification benefit from the Chinese mainland equity market because of the low level of correlation and partial integration, but they must pay enough attention to the local source of risks and currency risk, and follow closely further liberalization policies.Item The effect of foreign exchange volatility on trade: evidence from China(2016) Wang, QiDoes the volatility of the Renminbi (RMB) have any significant impact on China’s trade? This fundamental question has garnered considerable debate in both the academic and financial circles. The recent “currency wars” amongst larger economies has further fueled the question. Using a number of econometric methods, this research dissects the heart of the effect of the volatility of exchange rate on trade. The research makes crucial findings to provide an affirmative response to the central question posed. In line with most theoretical and empirical studies, the study found that volatility of exchange rate has a positive impact on trade by boosting exports and reducing imports. The appreciation of the RMB has tended to lead to a decrease in China’s global competitiveness, and often suppresses growth. The research provides an important insight on how Chinese monetary authorities can maintain the managed pegged currency system while simultaneously expanding economic growth. Key words: Exchange rate volatility; trade balance; imports; exports; causality; appreciation; depreciation.