DEPOCEN Working Paper Series
Nilanjan Banik, 2012. "China's new found love: The GMS"
The objective of this paper is to understand 'why' the Chinese firms are investing outside China, and 'how' China stands to gain from this decision. For our analysis, we consider the case of China's trade, and investment relation in the Greater Mekong Sub-region (GMS). We find that a reason for the Chinese firms to invest in the GMS has to do with higher domestic input cost, as well as, to evade protectionist measures in the US and the EU. As to, 'how' China stands to gain, it is largely explained through elements of complementarities in trading and investment relationship.
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