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Day 2 13:30 Panel 15

The Economy

Frankopan Hall

Jiang Ziying; Jacob Schumacher; Cao Shengxi/Sheng Xuanyi

Jiang Ziying,

Peking University, Year 3 PhD student in Political Economy

This paper aims to explore the role of international collaboration in the catching-up process of a science-based industry for a developing country like China. Previous literature of catching-up studies focuses on traditional manufacturing industries and proposes the capability construction trajectory “from imitation to innovation” for firms in developing countries. However, in a science-based sector such as the pharmaceutical industry, production knowledge and R&D knowledge are highly incompatible, which may create obstacles for capability construction for firms in developing countries if they mainly rely on their experience accumulation in production. Therefore, among the major sources of knowledge acquisition including in-house accumulation, collaboration with domestic S&T institutes and cooperation with foreign partners, this paper aims to investigate which source can play a significant role in the growth of innovative capacities.
This paper takes the Chinese pharmaceutical industry as an example, in which the Chinese government has already provided huge subsidies to promote innovation. Following literature on the relation between knowledge diversity and innovativeness, this paper identifies the related technological diversification (RTD), which is measured by the ATC (Anatomical Therapeutic Chemical) coding system, as an indicator for innovativeness. And as a new attempt to measure innovativeness, it will enrich our understanding of technological development and innovative capability building. This paper mainly employs a quantitative method and uses 2003-2015 panel data of new drug registered with the CFDA (China Food and Drug Administration) as the study sample. This paper reveals the status quo of China’s pharmaceutical industry that production is overdeveloped while R&D is insufficient, and shows that international cooperation is the most effective way to accumulate R&D knowledge and achieve innovation.

Jacob Schumacher,

Said Business School, University of Oxford, Teaching Fellow in Finance

We argue that China has the opportunity to take a global role in defining the regulatory approach to FinTech and RegTech. This is because China will likely develop relevant regulatory tools and expertise faster than other jurisdictions. The reasons for this rapid development include: 1) a faster and larger scale deployment of FinTech and RegTech products and industries in the immediate future 2) recent experiences addressing risk events and business changes to traditional financial firms and 3) a reformed regulatory and legal infrastructure that gives regulators the ability to respond quickly and efficiently. We believe that China's approach to regulating these industries will be highly influential internationally as other jurisdictions begin to formulate their own approach. Consequently, we emphasise the need for China to engage internationally with policy makers and researchers as a way to build international trust and cooperation. We also suggest that coordinated research projects evaluating the efficacy of FinTech and RegTech regulations to seriously consider China as an important case study.

Cao Shengxi,

Tsinghua University, PhD Candidate in Economic Policy

Sheng Xuanyi,

University of Oxford, DPhil Student in Geographical Economics

 

Competitor or Complement? China’s Role in the Provision of International Public Financial Goods

 

The 2008 financial crisis revealed the negative impact due to the lack of public financial goods. The questions remain as what factors led to the insufficiency of the emergent liquidity supply, what the potential risks for the financial market currently and how the global financial governance system can be improved to deal with the global financial issues effectively. This article first analyses the dilemma in the provision of public goods theoretically, upon which, it points out the characteristics of international public financial goods. The joint products, the power structure and corner flexibility constitute the international financial architecture.

 

Furthermore, the assessment of the governance of the global financial system before 2008 shows it lacks efficacy, leading to fluctuations in the global financial market. While China and other developing countries in G20 play increasingly important roles in the global financial governance, the world has witnessed changes in the Financial Stability Board, International Monetary Fund, World Bank and the regional financial arrangements. The crisis-dealing arrangements have been strengthened via relevant reforms whereas the long-term mechanism tends to be fragmented. The author argues that, to tackle this problem, a more inclusive and thus effective global financial governance system needs to be established. China's proposal for the shared future of mankind can serve as a global cooperation platform rather than an alternative regime.

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