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How much can foreign multinationals affect the Chinese economy? A dynamic general equilibrium analysis of Japanese FDI LATORRE, María C. HOSOE, Nobuhiro https://www.grips.ac.jp/list/jp/facultyinfo/hosoe_nobuhiro/ We analyze the impacts of a sharp fall of Japanese foreign direct investment (FDI) to China that occurred after the worldwide financial crisis in 2009. The study is conducted by means of a three-region (Japan, China, and the rest of the world (ROW)) recursive dynamic computable general equilibrium (CGE) model with multinational enterprises (MNEs) driven by FDI. Our simulation experiment showed that the FDI fall would cause price rises of Japanese affiliates’ goods and a depreciation of the renminbi. These two forces with the FDI fall would heavily reduce exports and production of Japanese MNE affiliates, while increasing those in Chinese manufacturing. This, however, does not mean that China would be a gainer, because it would experience a contraction in its service sector. Its losses in its service sector would exceed the gains in the manufacturing sectors. Therefore, overall China would lose due to the FDI fall. JEL Classification Codes: C68, F21, F23, F17 経済学 / Economics GRIPS Policy Research Center 2014-09-18 eng technical report AM https://doi.org/10.24545/00001152 https://grips.repo.nii.ac.jp/records/1152 10.24545/00001152 https://ideas.repec.org/p/ngi/dpaper/14-16.html https://ideas.repec.org/p/ngi/dpaper/14-16.html GRIPS Discussion Papers DP14-16 https://grips.repo.nii.ac.jp/record/1152/files/DP14-16.pdf application/pdf 602.7 kB