October 17, 2012

Outsourcing to China: Yea or Nay?

Outsourcing to — and investing in — China is a hot topic in the US presidential debates. Here's what the research says.

Betsy Wiesendanger
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Outsourcing to China has been a contentious topic during the US presidential debates. But beyond the campaign rhetoric lies a deeply complex, constantly shifting phenomenon. Academic researchers have for years been examining the forces that propel outsourcing to — and investment in — China, and they’ve looked at how it has reverberated across other economies. Some highlights:

  • Are China’s export statistics exaggerated? Chazen Faculty Director Shang-Jin Wei thinks so. Download his testimony before a US congressional commission (438 kb).
  • The decision to outsource to China isn’t everything it’s cracked up to be. In fact, some US companies are bringing production back to domestic factories, a process known as “backsourcing.”
  • The money flow isn’t one-way: China is investing overseas too.
  • View a webcast of a panel discussion on the “Economic and Political Impact of China’s Overseas Direct Investment” that includes Ilan Alon, director of The China Center, Rollins College;
    Greg Mills, director, Brenthurst Foundation; Daniel Rosen
    adjunct associate professor of international and public affairs, Columbia University; and Doug Ritchie,
    Chief Executive , Energy, Rio Tinto.

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