Globalisation

Post n°187
Published on 11/18/2020

By Peter Gubert and Patrick Branthomme

The technology balance of payments (TBP) provides a framework for analysing international technology transfers. After displaying a surplus in 2018, France's TBP stood at equilibrium at the end of 2019. The European Union's TBP shows a surplus comparable to that of the United States.

Chart 1: France: TBP at equilibrium in 2019 after a slight surplus in 2018 (EUR billion)/balance excluding insurance and tourism).
Chart 1: France: TBP at equilibrium in 2019 after a slight surplus in 2018 (EUR billion/balance excluding insurance and tourism). Source: Banque de France
Post n°180
Published on 09/16/2020

By Vivien Levy-Garboua, François Mouriaux, Tatiana Mosquera Yon and Mylène Sabatini

Since the 2008 financial crisis, captive financial institutions (special-purpose financial holding companies), subsidiaries of non-financial corporations (NFCs), have helped to drive growth in the financial sector, causing it to outstrip GDP growth. This trend reflects the increasingly complex and international organisational structures adopted by NFCs, but does not appear to have been accompanied by growth in risky financial transactions by these entities.

Chart 1a. Foreign direct investment by country, liabilities, % of GDP
Chart 1a. Foreign direct investment by country, liabilities, % of GDP Source: ECB
Post n°177
Published on 08/13/2020

The health crisis has severely impacted global trade and revived debates about the location of production. The widespread onshoring of manufacturing activities would mean abandoning the gains from international specialisation, but without necessarily making value chains more resilient. Given that French companies mainly source their inputs from Europe, a coordinated, EU-wide industrial strategy seems more appropriate.

Chart 1: Percentage change in volumes of manufacturing output and external trade between January-April 2019 and January-April 2020
Chart 1: Percentage change in volumes of manufacturing output and external trade between January-April 2019 and January-April 2020 Source: CPB World Trade Monitor. Authors' calculations.
Post n°163
Published on 05/27/2020

A pandemic is the type of challenges that can only be overcome by global action. Despite a pre-crisis context fraught with geopolitical and trade tensions, this necessary international coordination has been achieved in the economic field. However, the post-crisis phase will exacerbate conflicts of interest and constitute a "stress test" for multilateralism.

Chart 1. Measures taken by governments in response to the Covid 19 crisis (as a % of G20+ countries)
Chart 1. Measures taken by governments in response to the Covid 19 crisis (as a % of G20+ countries) Source: IMF, April 2020.
Post n°142
Published on 11/12/2019

By Bruno Cabrillac and Baptiste Meunier

The net international investment positions (NIIP) of the G20 countries have diverged since 1990. While this divergence results partly from persistent imbalances in goods and services, NIIPs have their own dynamics: the portfolio generates income and capital gains or losses. These dynamics have had a stabilising effect at the cost of financial risks for some debtors, i.e. the United States, and an excessive accumulation of safe assets by some creditors.

Chart 1 – Financial effects and real factors
Chart 1 – Financial effects and real factors Sources: Lane and Milesi-Ferretti (2017), authors’ calculations
Post n°140
Published on 10/29/2019

By Florian Lalanne and Irena Peresa

Responding to China’s greater capital account openness, major investment indices have started incorporating renminbi-denominated securities. This is expected to support portfolio inflows into China and increase the correlation between domestic asset prices and external factors. The consequences for other emerging markets are uncertain.

Composition of the MSCI Emerging markets index (%).
Chart 1: Composition of the MSCI Emerging markets index (%). Source: MSCI. Note: The index is composed of equity securities. China A-shares are renminbi-denominated equities traded in Shanghai and Shenzhen, while China offshore shares are mainly traded in Hong Kong.
Post n°137
Published on 10/15/2019

By Patrick Branthomme and Laurent Paul

Launched in September 2013 by the Chinese authorities, the “new silk road” project aims to better connect Asia and Europe. The latter must defend its economic interests and the multilateral framework to the best of its ability. To this end, it will be able to draw on the recent progress of the G20, which has established principles for the transparency of financing, the quality of infrastructure and compliance with environmental and corporate social responsibility standards.

Image: land and sea trade corridors of the “new silk road”
Image: land and sea trade corridors of the “new silk road” Source: Hong Kong Trade Development Council (HKTDC) Research
Post n°134
Published on 09/30/2019

By Sanvi Avouyi-Dovi, Pierre Bui-Quang et Pierre Sicsic

The primary income surplus has been growing for several years. Since 2010, the increase of around EUR 10 billion in the income of French residents working abroad has been higher than that of direct investment (DI) income. The improvement in the income balance is now driven by employee compensation.

Chart 1: A significant improvement in the balance of compensation of cross-border commuters since 2010
Chart 1: A significant improvement in the balance of compensation of cross-border commuters since 2010 Source: Banque de France’s Annual Report on the Balance of Payments. Note: primary income surplus expressed in billions of euro (EUR bn). PI: Portfolio investment; OI: Other investment
Post n°118
Published on 06/07/2019

By Liang Bai (University of Edinburgh) and Sebastian Stumpner (Banque de France)

In recent years, the share of US expenditure on imports from China has increased rapidly. Using detailed consumption data from US households for the period 2004-15, we estimate that, due to Chinese penetration, prices of consumer tradable goods have grown by roughly 0.2 percentage point less per year. Other things being equal, this translates into a reduction in the cost of living of roughly USD 200 per household in 2015.

China has become the largest exporter of goods to the United States.
Chart 1: China has become the largest exporter of goods to the United States. Source: Authors’ calculations based on data from CEPII and the Bureau of Economic Analysis (BEA).
Post n°115
Published on 05/23/2019

By Guillaume Gaulier (Banque de France), Aude Sztulman (Paris-Dauphine University) and Deniz Ünal (CEPII)

The weakening of global value chain dynamics is considered as one of the causes of the slowdown in world trade since the 2008 crisis. However, measured as the share of trade in parts and components in the volume of world trade, and given the evolution of the business cycle, the development of international value chains continued after the crisis.

Chart 1: Share of Parts & Components (P&C) in manufacturing world trade in volume
Chart 1: Share of Parts & Components (P&C) in manufacturing world trade in volume Source: Authors' calculations based on CEPII WTFC data (about 5,000 products for the bilateral trade of over 200 countries) and IMF data (world output gap).

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