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602. Pension Reform in China
- Author:
- Felix Salditt, Peter Whiteford, and Willem Adema
- Publication Date:
- 06-2007
- Content Type:
- Working Paper
- Institution:
- The Organisation for Economic Co-operation and Development
- Abstract:
- China is currently in the process of developing the largest pension system in the world, and it is doing this at a time of unparalleled economic and demographic transition. The central government has followed a step-by-step approach to develop a system that can accommodate a rapidly aging society within a rapidly growing, but still largely underdeveloped economy. This paper analyses how far the process of creating a national old age insurance system had proceeded by the end of 2006. It provides a detailed description of this system and an assessment of to what degree it has so far achieved ?its primary goal of social security for more people?
- Topic:
- Economics, Reform, Welfare, and Pension
- Political Geography:
- China and Asia
603. China's Quest for Alternative to Neo-liberalism: Market Reform, Economic Growth, and Labour
- Author:
- Dic Lo
- Publication Date:
- 11-2007
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- Since the turn of the century, China's state and society have focused their efforts on “constructing a harmonious society”. Viewed from the perspective of globalization, these efforts represent a quest for a model of development that deviates fundamentally from neo-liberalism. In particular, state policies and institutional reforms in recent years have tended to target at labor compensation-enhancing economic growth, rather than growth based on “cheap labor”. This paper seeks to clarify the nature of the emerging Chinese economic development model, and, on that basis, to analyze its efficiency and welfare attributes. In conjunction with an analysis of China's economic growth path, which seems to have undergone a transition from labor-intensive growth to capital-deepening growth, it is argued that the new development model does represent a more feasible and desirable pursuit than neo-liberalism. The paper concludes with a discussion on the impact of this new Chinese development model on the future direction of globalization.
- Topic:
- Development, Economics, Globalization, and Markets
- Political Geography:
- China and Asia
604. Infrastructure as Economic Density
- Author:
- Sangaralingam Ramesh
- Publication Date:
- 12-2007
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- Income disparities are rising in China as a consequence of the economic reforms post 1979 which virtually gave unchallenged economic growth and prosperity to the coastal regions whose economic growth increased over the last 30 years at the expense of the interior hinterland. Institutions in China have seen the answer to restoring a rural-urban income balance by redistributing people from the interior regions of China to the prosperous coastal regions. This can be seen as a supply side reaction to the income disparity problem, which will inevitably impose the kinds of social costs, which concentrations of populations normally bring. This paper offers insights into other methods of transforming the urban-rural income disparity problem in China, the economic implications of infrastructure investment, the relevance of Krugmans 'New Economic Geography' to the transformative Economics which China has experienced over the last 30 years; and the close relationship between how Krugman's agglomeration economies arise and the development of SEZ's and HTDZ's in China.
- Topic:
- Development, Economics, and Industrial Policy
- Political Geography:
- China and Asia
605. Growing Links in Energy and Geopolitics: China and the Middle East
- Author:
- Mehmet Ogutcu and Xin Ma
- Publication Date:
- 07-2007
- Content Type:
- Journal Article
- Journal:
- Insight Turkey
- Institution:
- SETA Foundation for Political, Economic and Social Research
- Abstract:
- This paper attempts to analyze the expanding energy linkages between China, one of the most dynamic major consumers, the Middle East, a leading petroleum producer, and the CIS, a core non-OPEC emerging producer, not only because they are well established oil exporting regions, but also because of their geopolitical relevance to China as key players in a possible energy corridor linking China with the Gulf at some point in the future. The paper concludes that the economics and geopolitics of energy supply for China dictate different approaches to each of these regions, with the CIS territory ensuring that its energy to be transported across the ocean where China could be vulnerable to potential maritime disruption in the event of serious international disputes, and with the Gulf offering more flexible commercial arrangements.
- Topic:
- Economics
- Political Geography:
- China and Middle East
606. Income Distribution: Effects on Growth and Development
- Author:
- Nancy Birdsall
- Publication Date:
- 04-2007
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- I review the literature on the effects of inequality on growth and development in the developing world. Two stylized facts emerge from empirical studies: inequality is more likely to harm growth in countries at low levels of income (below about $3200 per capita in 2000 dollars); and it is at high levels of inequality (at or above a Gini coefficien t of .45) that a negative association emerges. Between 15 and 40 percent of the developing world's population lives in countries with these characteristics, depending on the inclusion of China, whose level of inequality has recently been measured at almost .45. Theory and evidence suggest that high inequality affects growth: (1) through interaction with incomplete and underdeveloped markets for capital and information; (2) by discouraging the evolution of the economic and political institutions associated with accountable government (which in turn enable a market environment conducive to investment and growth); and (3) by undermining the civic and social life that sustains effective collective decision-making.
- Topic:
- Civil Society, Economics, Emerging Markets, and Markets
- Political Geography:
- China
607. Managing Pest Resistance in Fragmented Farms: An Analysis of the Risk of Bt Cotton in China and its Zero Refuge Strategy and Beyond
- Author:
- Fangbin Qiao, Jim Wilen, and Jikun Huang
- Publication Date:
- 02-2007
- Content Type:
- Working Paper
- Institution:
- Walter H. Shorenstein Asia-Pacific Research Center
- Abstract:
- The goal of this study is to discuss why China and perhaps other developing countries may not need a refuge policy for Bacillus thuringiensis (Bt) cotton. We describe in detail the different elements that a nation—especially a developing one—should be considering when deciding if a refuge policy is needed. Drawing on a review of scientific data, economic analysis of other cases and a simulation exercise using a bio-economic model that we have produced to examine this question, we show that in the case of Bt cotton in China, the approach of not requiring special cotton refuges is defensible.
- Topic:
- Agriculture and Economics
- Political Geography:
- China and Asia
608. Irrigation Water Pricing Policy in China
- Author:
- Jikun Huang, Qiuqiong Huang, Richard Howitt, and Jinxia Wang
- Publication Date:
- 02-2007
- Content Type:
- Working Paper
- Institution:
- Walter H. Shorenstein Asia-Pacific Research Center
- Abstract:
- As water becomes scarcer in northern China, designing policies that can induce water users to save water has become one of the most important tasks facing China's leader. Past water policies may not be a solution for the water scarcity problem in the long run. This paper looks at a new water policy: increasing water prices so as to provide water users with direct incentives to save water. Using a methodology that allows us to incorporate the resource constraints, we are able to recover the true price of water with a set of plot level data. Our results show that farmers are quite responsive if the correct price signal is used, unlike estimates of price elasticities that are based on traditional methods. Our estimation results show that water is severely under priced in our sample areas in China. As a result, water users are not likely to respond to increases in water prices. Thus as the first step to establishing an effective water pricing policy, policy makers must increase water price to the level of VMP so that water price reflects the true value of water, the correct price signal. Increases in water prices once they are set at the level of VMP, however, can lead to significant water savings. However, our analysis also shows that higher water prices also affect other aspects of the rural sector. Higher irrigation costs will lower the production of all crops, in general, and that of grain crops, in particular. Furthermore, when facing higher irrigation costs, households suffer income losses. Crop income distribution also worsens with increases in water prices.
- Topic:
- Agriculture, Economics, and Environment
- Political Geography:
- China and Asia
609. India and its Neighbours: Do Economic Interests Have the Potential to Build Peace?
- Author:
- Charu Lata Hogg
- Publication Date:
- 11-2007
- Content Type:
- Working Paper
- Institution:
- Chatham House
- Abstract:
- Until a decade ago, India was regarded largely as a poor developing country with low visibility on the global political and economic front. A multitude of factors, most prominently its emerging global economic strength, have led India not only to redefine its self-image but also to adopt a new political role both internationally and within its immediate neighbourhood.
- Topic:
- Economics, International Political Economy, International Trade and Finance, and Regional Cooperation
- Political Geography:
- China, South Asia, India, and Asia
610. Entrepreneurship and Political Guanxi Networks in China's Private Sector
- Author:
- Christopher A. McNally, Hong Guo, and Guangwei Hu
- Publication Date:
- 08-2007
- Content Type:
- Working Paper
- Institution:
- East-West Center
- Abstract:
- Since the mid-1990s the Chinese government has rapidly liberalized the environment facing domestic private firms. As a consequence, many private firms have clarified their ownership relations and acquired stronger organizational boundaries. However, despite this formalization of private sector institutions, informal guanxi networks remain a key component in firm success. Most significant among these guanxi networks are political networks that connect private entrepreneurs with actors in China's political sphere.
- Topic:
- Economics, International Trade and Finance, and Markets
- Political Geography:
- China and Israel
611. "BRIC countries are opaque"
- Author:
- George Vojta
- Publication Date:
- 06-2007
- Content Type:
- Working Paper
- Institution:
- Media Tenor International
- Abstract:
- Media Tenor: Even within the BRIC States one cannot say that all three are on the Media Agenda, not mention developing countries. What could be the reason for this salience? Vojta: My sense is that the four BRIC countries are rising in media visibility as they become more significant players in the global system. Very shortly these four countries will surpass the G7countries in annual absolute growth results.
- Topic:
- Development, Economics, International Trade and Finance, and Infrastructure
- Political Geography:
- Russia, China, South Asia, and Latin America
612. China's Foreign Policy Comes of Age
- Author:
- Michael Yahuda
- Publication Date:
- 09-2007
- Content Type:
- Journal Article
- Journal:
- The International Spectator
- Institution:
- Istituto Affari Internazionali
- Abstract:
- China's continuing rise has brought it to a new stage in its engagement with the outside world. China's growing economic and diplomatic weight has made it an influential player in all parts of the world and it is seeking to consolidate its image as a responsible major player within its own region and in the wider world. The Olympic Games to be held in Beijing next year will offer a major opportunity to show that China has come of age as a modern power. China is reaching a point where the extent and depth of its international interests are not only increasing its stake in the global system, but are also allowing it to begin to make its mark as a potential rule-maker in world affairs. This is particularly noticeable in Africa, where it is successfully challenging the approach of international organisations and Western governments which have made aid and certain other economic exchanges and arms sales conditional on improving the governance of relevant states. China's ''model of development'', which combines rapid economic growth with authoritarian rule, is gaining approval by certain third world governments as a viable alternative to the so-called ''Washington consensus'', which emphasises liberal economics and democratic politics.
- Topic:
- Economics
- Political Geography:
- China, Washington, and Beijing
613. China's Energy Policy: from Self-sufficiency to Energy Efficiency
- Author:
- François Godement
- Publication Date:
- 09-2007
- Content Type:
- Journal Article
- Journal:
- The International Spectator
- Institution:
- Istituto Affari Internazionali
- Abstract:
- China's energy policy is traditionally based on self-sufficiency. While energy bottlenecks have often been cited as a limitation to China's economic growth, China has been successful at producing energy using its domestic coal - albeit putting a strain on transport and producing a high degree of pollution. Aggressively after 2001, China has started to search for external resources, both to supply its voracious appetite for oil and to insure its economy against possible geopolitical disruptions - including the threat of sanctions. This has given Chinese companies a life of their own, making them large international actors. Today, China is both saddled with new responsibilities for the developing countries in which it owns sizeable exploitation rights, and influenced by a new thinking on energy security, based on the idea of improving energy efficiency before developing resources. This offers opportunities for the West - and Japan - in cooperating with China, a huge energy importing country, to lessen the dominance of producers, create business opportunities for energy efficiency equipment, and also to cap CO2 and other emissions.
- Topic:
- Economics
- Political Geography:
- Japan and China
614. The European Union and China
- Author:
- Roberto Menotti
- Publication Date:
- 04-2007
- Content Type:
- Working Paper
- Institution:
- Lowy Institute for International Policy
- Abstract:
- The EU is a newcomer to East Asian affairs, but its stake in the region is growing rapidly in light of China's economic clout. The European approach to China's rise differs profoundly from that of the US, due to geopolitical realities and a general belief in the benign effects of economic interdependence.
- Topic:
- Foreign Policy and Economics
- Political Geography:
- China, East Asia, and Asia
615. China and Economic Integration in East Asia: Implications for the United States
- Author:
- C. Fred Bergsten
- Publication Date:
- 03-2007
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- East Asia is clearly, if gradually and unevenly, moving toward regional economic integration. Market forces are leading the process, as firms construct production chains across the area that exploit the comparative advantage of its individual countries. Governments are now moving to build on those forces, and consolidate them, through a series of formal agreements to intensify their economic relationships and start creating an East Asian Community.
- Topic:
- Development and Economics
- Political Geography:
- United States, China, Israel, East Asia, and Asia
616. Exit Polls: Refugee Assessments of North Korea's Transition
- Author:
- Stephan Haggard, Marcus Noland, and Yoonok Chang
- Publication Date:
- 12-2007
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Results from a survey of more than 1,300 North Korean refugees in China provide insight into changing economic conditions in North Korea. There is modest evidence of slightly more positive assessments among those who exited the country following the initiation of reforms in 2002. Education breeds skepticism; higher levels of education were associated with more negative perceptions of economic conditions and reform efforts. Other demographic markers such as gender or provincial origin are not robustly correlated with attitudes. Instead, personal experiences appear to be central: A significant number of the respondents were unaware of the humanitarian aid program and the ones who knew of it almost universally did not believe that they were beneficiaries. This group's evaluation of the regime, its intentions, and accomplishments is overwhelmingly negative—even more so than those of respondents who report having had experienced incarceration in political detention facilities—and attests to the powerful role that the famine experience continues to play in the political economy of the country.
- Topic:
- Development, Economics, and Politics
- Political Geography:
- China, North Korea, and Korea
617. Congress, Treasury, and the Accountability of Exchange Rate Policy: How the 1988 Trade Act Should Be Reformed
- Author:
- Randall Henning
- Publication Date:
- 09-2007
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The controversy within the United States over Chinese exchange rate policy has generated a series of legislative proposals to restrict the discretion of the Treasury Department in determining currency manipulation and to reform the department's accountability to Congress. This paper reviews Treasury's reports to Congress on exchange rate policy—introduced by the 1988 Trade Act—and Congress's treatment of them. It finds that the accountability process has often not worked well in practice: The reports provide only a partial basis for effective congressional oversight. For its part, Congress held hearings on less than half of the reports and overlooked some important substantive issues. Several recommendations can improve guidance to the Treasury, standards for assessment, and congressional oversight. These include (1) refining the criteria used to determine currency manipulation and writing them into law, (2) explicitly harnessing US decisions on manipulation to the International Monetary Fund's rules on exchange rates, (3) clarifying the general objectives of US exchange rate policy, (4) reaffirming the mandate to seek international macroeconomic and currency cooperation, (5) requiring Treasury to lead an executivewide policy review, and (6) institutionalizing multicommittee oversight of exchange rate policy by Congress. Legislators should strengthen reporting and oversight of broader exchange rate policy in addition to strengthening the provisions targeting manipulation.
- Topic:
- Economics, Foreign Exchange, and International Trade and Finance
- Political Geography:
- United States and China
618. A (Lack of) Progress Report on China's Exchange Rate Policies
- Author:
- Morris Goldstein
- Publication Date:
- 06-2007
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This working paper assesses the progress made in improving China's exchange rate policies over the past five years (that is, since 2002). I first discuss four indicators of progress on China's external imbalance and its exchange rate policies—namely, the change in (and level of) China's global current account position, movements in the real effective exchange rate of the renminbi (RMB), the role of market forces in the determination of the RMB, and China's compliance with its obligations on exchange rate policy as a member of the International Monetary Fund (IMF). I then discuss why the lack of progress in improving China's exchange rate policies matters for the economies of the China and the United States and for the international monetary and trading system. I also argue that several popular arguments and excuses for why more cannot be accomplished on removing the large undervaluation of the RMB are unpersuasive. Finally, I consider what can and should be done by China, the United States, and the IMF to accelerate progress over the next year or two.
- Topic:
- Development, Economics, and Foreign Exchange
- Political Geography:
- United States, China, and Asia
619. Strategic Partnership or Strategic Competition
- Author:
- Bonnie Glaser and James Nolt
- Publication Date:
- 12-2006
- Content Type:
- Policy Brief
- Institution:
- Foreign Policy In Focus
- Abstract:
- As part of our China Focus, we asked two leading scholars to reflect on the tensions and possibilities in U.S.-China relations. Bonnie Glaser is a senior associate at the Center for Strategic and International Studies. James Nolt is a senior fellow at the World Policy Institute. We asked them first about the potential for a strategic security partnership between the United States and China, then about their economic relationship.
- Topic:
- Security, Economics, and International Cooperation
- Political Geography:
- United States, China, and Asia
620. China's Economic Growth, 1978-2005: Structural Change and Institutional Attributes
- Author:
- Dic Lo and LI Guicai
- Publication Date:
- 11-2006
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- China's sustained rapid economic growth over the era of its systemic reform is of general importance for late development under globalization. This paper seeks to construct an explanation of the experience, which centers around the notion of an evolving "regime of accumulation", or development path, that emboddies an uneasy mix of the attributes of allocative and productive efficiency. In this light, the analytical findings of the paper give rise to two main propositions. First, in contrast to the general direction of market reform in the institutional dimension, China's actual path of industrialization and economic growth has rather tended to contradict the principle of comparative advantage - it has been in the direction of capital deepening, especially since the early 1990s. Second, China's reformed economic institutions have encompassed both market-conforming and market-supplanting elements, represented by non-state-owned enterprises and state-owned enterprises, respectively, with the former accounting for the improvement in allocative efficiency while the latter accounting for the improvement in productive efficiency. The paper concludes with a discussion on the social implications of the findings and propositions.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- China
621. Making Sense of China's Economic Transformation
- Author:
- Dic Lo
- Publication Date:
- 03-2006
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- China's sustained rapid economic growth over the post-1978 reform era, which is also the era of globalisation, is of worldwide importance. This growth experience has been based mainly on China's internal dynamics. In the first half of the era, economic growth was propelled by improvement in both allocative efficiency and productive efficiency. From the early 1990s until the present time, however, economic growth has been increasingly based on dynamic increasing returns associated with a growth path that is characterised by capital deepening. In both periods, the growth paths and their associated long-term-oriented institutions contradict principles of the free market economy - i.e., doctrines of globalisation. In the form of an analytical overview, this article seeks to explain and interpret the historical background, logic of evolution, and developmental and social implications of China's economic transformation. The analytics draws on a range of relevant economic theories including Marxian theory of economic growth, Post-Keynesian theory of demand determination, and Neo-Schumpeterian theory of innovation. It is posited that these alternative theoretical perspectives offer better insights than mainstream neoclassical economics in explaining and interpreting China's economic transformation.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- China
622. Flying Geese or Sitting Ducks: China's Impact on the Trading Fortunes of other Asian Economies
- Author:
- Alan J. Ahearne, John G. Fernald, John W. Schindler, and Prakash Loungani
- Publication Date:
- 12-2006
- Content Type:
- Working Paper
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- This paper updates our earlier work (Ahearne, Fernald, Loungani and Schindler, 2003) on whether China, with its huge pool of labor and an allegedly undervalued exchange rate, is hurting the export performance of other emerging market economies in Asia. We continue to find that while exchange rates matter for export performance, the income growth of trading partners matters far more. This suggests the potential for exports of all Asian economies to grow in harmony as long as global growth is strong. We also examine changes in export shares of Asian economies to the U.S. market and find evidence that dramatic changes in shares are taking place. Many of these changes are consistent with a 'flying geese' pattern in which China moves into the product space vacated by the Asian NIEs or with greater integration of trade across Asia in the production of final goods. Nevertheless, China's dramatic gains in recent years do increase the pressure on Asian economies, particularly in ASEAN and South Asia, to seek areas of comparative advantage.
- Topic:
- Development, Economics, Foreign Exchange, International Trade and Finance, and Markets
- Political Geography:
- China, South Asia, and Asia
623. What's So Special About China's Exports?
- Author:
- Dani Rodrik
- Publication Date:
- 01-2006
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- The phenomenal performance of China constitutes the great economic miracle of the last quarter century. China's economy has expanded by leaps and bounds, at historically unprecedented rates that few economists would have found plausible or feasible ex ante. More importantly, this growth has lifted hundreds of millions of people from deep poverty and has helped improve health, education, and other social standards. China has accomplished all this using its own brand of experimental gradualism--increasingly relying on markets and on price signals, yet until very recently doing so within the boundaries of a highly unorthodox set of institutions.
- Topic:
- International Relations, Foreign Policy, and Economics
- Political Geography:
- China and Asia
624. OECD and the WTO (Policy Brief compilation)
- Publication Date:
- 03-2006
- Content Type:
- Policy Brief
- Institution:
- The Organisation for Economic Co-operation and Development
- Abstract:
- Fears that “globalisation” implies increasing job losses and lower wages are an important source of popular ambivalence towards the increasingly open character of OECD economies. Although such concerns are not new, recent developments appear to have heightened workers' apprehensions that rising trade competition threatens their jobs, wages and employment conditions, particularly in the higher-wage OECD countries. Increased international sourcing of production activities – including the “offshoring” of some white-collar jobs in information technology (IT) and business services – has led some commentators to conclude that a large share of high-wage OECD workers will soon be in direct competition with workers in countries where wages are far lower. EU enlargement and the increasing integration of large, labour-surplus economies such as India and China into the world trading system also reinforce anxieties about “delocalisation” and “a race to the bottom”.
- Topic:
- Development, Economics, International Organization, and International Trade and Finance
- Political Geography:
- China
625. APEC and the search for relevance: 2007 and beyond
- Author:
- John Ravenhill, Lorraine Elliott, Helen E.S. Nesadurai, and Nick Bisley
- Publication Date:
- 11-2006
- Content Type:
- Working Paper
- Institution:
- Australian National University Department of International Relations
- Abstract:
- In September 2007, Australia will host the annual Economic Leaders' Meeting of the Asia–Pacific Economic Cooperation (APEC) forum. This will be the culmination of over 100 days of ministerial, official and business group meetings, working groups and dialogues that will be held in various Australian cities from January to August. Fifteen federal government departments will be involved along with a range of other interested actors, predominantly in the private sector. The Australian government will spend considerable sums of money on the leaders' meeting itself, not least to ensure the security of those attending. This will include, if all goes according to plan, the heads of government of 21 countries—member economies in APEC-speak—including the United States, Russia, Japan and China. Security may well be the least of the government's worries. Few would argue that APEC is 'going strong' as a regional economic forum and recent reviews have suggested that at best it faces an uncertain future and that at worst it could be in a state of terminal decline. The forum is argued to have lost its relevance and to have generally been unsuccessful in attaining any of its more ambitious goals such as regional trade liberalisation.
- Topic:
- Security, Development, Economics, and International Trade and Finance
- Political Geography:
- Russia, United States, Japan, China, Australia, and Australia/Pacific
626. Is China an economic threat to Southeast Asia?
- Author:
- John Ravenhill
- Publication Date:
- 05-2006
- Content Type:
- Working Paper
- Institution:
- Australian National University Department of International Relations
- Abstract:
- China's entry into the World Trade Organization (WTO) caused widespread concern that it would gain market share at the expense of other economies in East Asia, especially the lower-income ASEAN economies. Economic modelling done by the World Bank and others appeared to substantiate these fears; the conclusions of these studies caused further consternation among politicians and academic commentators in Southeast Asia who believed that China's success in the 1990s in attracting foreign direct investment had come at ASEAN's expense.
- Topic:
- Development, Economics, and World Bank
- Political Geography:
- China, Asia, and Southeast Asia
627. The Emergence of a New 'Socialist' Market Labour Regime in China
- Author:
- Gunter Schucher and Jutta Hebel
- Publication Date:
- 12-2006
- Content Type:
- Working Paper
- Institution:
- German Institute of Global and Area Studies
- Abstract:
- China's transition to a market economy has been a process of basic institutional changes and institution building. The institutional change from a socialist labour regime (SLR) as one of the backbones upholding the traditional leninist system to a new 'socialist' market labour regime (SMLR) became particularly important for the success of economic and political reforms. This analysis is based on the analytical framework of regimes and makes use of the idea of path dependence. An ensemble of institutions, mutually interconnected and influencing each other, forms the regime and shapes its trajectory. Six institutions are identified to constitute the employment regime: (1) the system of social control, (2) the production system, (3) the system of industrial relations, (4) the welfare system, (5) the family order, and (6) the educational system. The SMLR is still characterised by its socialist past and differs from other varieties of transformation labour regimes and bears little resemblance to labour regimes in Western market economies.
- Topic:
- Development, Economics, and Markets
- Political Geography:
- China and Asia
628. Untangling China's Quest for Oil through State-backed Financial Deals
- Author:
- Erica Downs and Peter C. Evans
- Publication Date:
- 05-2006
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- The efforts of China's national oil companies to secure upstream oil assets abroad have attracted attention from U.S. officials and policymakers. Congress has taken notice, as indicated by the request of the Chairman of the U.S. House of Representatives Resources Committee Richard W. Pombo—triggered by the bid made by China National Offshore Oil Corporation Ltd. for Unocal in 2005—for a study by the Department of Energy of the economic and national security implications of China's energy demand. The report, released in February 2006, concludes that the foreign investments of China's national oil companies do not pose an economic challenge to the U.S. However, one issue the report mentions only in passing that merits further attention is how the Chinese government's financial support for some of these investments can undermine an open and competitive world oil market.
- Topic:
- Security, Economics, and Energy Policy
- Political Geography:
- United States, China, and Asia
629. China's Social Unrest: The Story Behind the Stories
- Author:
- Albert Kiedel
- Publication Date:
- 09-2006
- Content Type:
- Policy Brief
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- China is confronting widespread violent and even deadly social unrest, raising Communist Party alarms about national security. Some observers speculate that unrest could undermine China's national leadership, as it did in the Ukraine and the Philippines. Some U.S. policy makers might welcome unrest in China as a path to democracy and “freedom.” But rather than an opportunity to transform China's political order, China's social unrest should be understood as the unavoidable side effects—worsened by local corruption—of successful market reforms and expanded economic and social choice. Managing this unrest humanely requires accelerated reform of legal and social institutions with special attention to corruption. More violence would generate more suffering, potentially destabilizing East Asia and harming U.S. interests. The United States should encourage China to strengthen its social reconciliation capabilities, without making electoral political reform a prerequisite for intensifying engagement across the board.
- Topic:
- Civil Society, Development, and Economics
- Political Geography:
- United States, China, Ukraine, East Asia, and Asia
630. The Economics of Young Democracies: Policies and Performance
- Author:
- Nathan Converse and Ethan Kapstein
- Publication Date:
- 03-2006
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- Since the “third wave” of democratization began in 1974, nearly 100 states have adopted democratic forms of government, including, of course, most of the former Soviet bloc nations. Policy-makers in the west have expressed the hope that this democratic wave will extend even further, to the Middle East and onward to China. But the durability of this new democratic age remains an open question. By some accounts, at least half of the world's young democracies—often referred to in the academic literature as being “unconsolidated” or “fragile”—are still struggling to develop their political institutions, and several have reverted back to authoritarian rule. Among the countries in the early stages of democratic institution building are states vital to U.S. national security interests, including Afghanistan and Iraq.
- Topic:
- Democratization, Development, Economics, and Government
- Political Geography:
- Afghanistan, China, and Iraq
631. Poverty Reduction in China: Trends and Causes
- Author:
- Guanghua Wan and Yin Zhang
- Publication Date:
- 12-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Applying the Shapley decomposition to unit-record household survey data, this paper investigates the trends and causes of poverty in China in the 1990s. The changes in poverty trends are attributed to two proximate causes; income growth and shifts in relative income distribution. The Foster-Greer-Thorbecke measures are computed and decomposed, with different datasets and alternative assumptions about poverty lines and equivalence. Among the robust results are: (i) both income growth and favourable distributional changes can explain China's remarkable achievement in combating poverty in rural areas in the first half of the 1990s; (2) in the second half of the 1990s, both rural and urban China suffered from rapidly rising inequality and stagnant income growth, leading to a slow-down in poverty reduction, even reversal of poverty trend.
- Topic:
- Development, Economics, and Poverty
- Political Geography:
- China and Asia
632. Regional Inequality, Industry Agglomeration and Foreign Trade: The Case of China
- Author:
- Yin Ge
- Publication Date:
- 09-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- How do foreign trade and foreign direct investment affect regional inequality? Foreign trade and investment may affect internal economic geography, and the resulting industry agglomeration may contribute to regional inequality. This paper provides empirical evidence supporting this linkage. The results indicate that the increasing regional inequality in China has been accompanied by an increase in the degree of regional specialization and industry agglomeration. Foreign trade and foreign investment are closely related to industry agglomeration in China. Industries dependent on foreign trade and FDI are more likely to locate in regions with easy access to foreign markets, and exporting industries have a higher degree of agglomeration.
- Topic:
- Economics, Industrial Policy, and International Trade and Finance
- Political Geography:
- China and Asia
633. Financial Development and Income Inequality in Rural China 1991-2000
- Author:
- Zhicheng Liang
- Publication Date:
- 09-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Financial development can exert a significant influence on the distribution of income. In this paper, using Chinese provincial data over the period of 1991-2000 and applying the generalized method of moment (GMM) techniques, we investigate the relationship between finance and inequality in rural China by testing alternative existing theories concerning the finance-inequality nexus. A negative and linear relationship between finance and inequality is found in our estimations. The empirical results show that financial development significantly reduces income inequality in post-reform rural China.
- Topic:
- Demographics, Development, and Economics
- Political Geography:
- China and Asia
634. Fiscal Decentralization and Political Centralization in China: Implications for Growth and Inequality
- Author:
- Xiaobo Zhang
- Publication Date:
- 09-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- China's current fiscal system is largely decentralized while its governance structure is rather centralized with strong top-down mandates and a homogenous governance structure. Due to large differences in initial economic structures and revenue bases, the implicit tax rate and fiscal burdens to support the functioning of local government vary significantly across jurisdictions. Regions initially endowed with a broader nonfarm tax base do not need to rely heavily on preexisting or new firms to finance public goods provision, thereby creating a healthy investment environment for the nonfarm sector to grow. In contrast, regions with agriculture as the major economic activity have little resources left for public investment after paying the expenses of bureaucracy. Consequently, differences in economic structures and fiscal burdens may translate into a widening regional gap.
- Topic:
- Development, Economics, and Politics
- Political Geography:
- China and Asia
635. Financial Development, Growth, and Regional Disparity in Post-Reform China
- Author:
- Zhicheng Liang
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Deepening financial development and rapid economic growth in China have been accompanied by widening income disparity between the coastal and inland regions. In this paper, by employing panel dataset for 29 Chinese provinces over the period of 1990-2001 and applying the generalized method of moment (GMM) techniques, we examine the impacts of financial development on China's growth performance. Our empirical results show that financial development significantly promotes economic growth in coastal regions but not in the inland regions; the weak finance-growth nexus in inland provinces may aggravate China's regional disparities.
- Topic:
- Conflict Resolution, Development, and Economics
- Political Geography:
- China and Asia
636. Spatial Convergence in China: 1952-99
- Author:
- Geoffrey J.D. Hewings, Dong Guo, and Patricio Aroca
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The purpose of this paper is to examine the convergence process in China by taking into account the spatial interaction between factors. The paper shows that there has been a dramatic increase in the spatial dependence of China's per capita GDP in the last 20 years. The consequence of space plays an important role, which is reflected in the influence of a neighbour's condition on the mobility of a province's income distribution from one category to another. The dynamics of the process showed evidence that China's distribution has gone from one of convergence to stratification, and from stratification to polarization.
- Topic:
- Demographics, Development, and Economics
- Political Geography:
- China and Asia
637. Financial Sector Development and Growth: The Chinese Experience
- Author:
- Mingming Zhou and Iftekhar Hasan
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper documents the financial and institutional developments of China during the past two decades, when China was successfully transformed from a rigid centralplanning economy to a dynamic market economy following its unique path. We empirically examine the relationship between financial development and economic growth in China by employing a panel sample covering 31 Chinese provinces during the important transition period 1986-2002. Our evidence suggests that the development of financial markets, institutions, and instruments have been robustly associated with economic growth in China.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- China and Asia
638. Development of Financial Intermediation and the Dynamics of Rural-Urban Inequality: China, 1978-98
- Author:
- Qi Zhang, Mingxing Liu, and Yiu Por Chen
- Publication Date:
- 06-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Using China as a test case, this paper empirically investigates how the development of financial intermediation affects rural-urban income disparity (RUID). Using 20-year province level panel data, we find that the level of financial development is positively correlated with RUID. Examining two subperiods, 1978-88 and 1989-98, we test several competing hypotheses that may affect RUID. We find that the increase of RUID may be explained by fiscal policy during the first period and financial intermediates during the second period. In addition, we show that the direction of the Kuznets effect on RUID is sensitive to changes in government development policies. The rural development policies during the first period may have enhanced the rural development and reduced RUID. However, the financial intermediary policy during the second period focused on urban development and increased both urban growth and intra-urban inequalities, thus leading to an increase in RUID. Finally, we show that RUID is insensitive to the provincial industrial structure (the share of primary industry in GDP). These results are consistent with the traditional urban-bias hypothesis and are robust to the inclusion of controls for endogeneity issues. This study adds to the economic inequality literature by clarifying the effects of government policies on the underlying dynamics on convergent and divergent effects on rural-urban inequality.
- Topic:
- Development, Economics, and Government
- Political Geography:
- China and Asia
639. Poverty Accounting by Factor Components: With an Empirical Illustration Using Chinese Data
- Author:
- Guanghua Wan
- Publication Date:
- 06-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The purpose of this paper is to develop two poverty decomposition frameworks and to illustrate their applicability. A given level of poverty is broadly decomposed into an overall inequality component and an overall endowment component in terms of income or consumption determinants or input factors. These components are further decomposed into finer components associated with individual inputs. Also, a change in poverty is decomposed into components attributable to the growth and redistributions of factor inputs. An empirical illustration using Chinese data highlights the importance of factor redistributions in determining poverty levels and poverty changes in rural China.
- Topic:
- Development, Economics, and Poverty
- Political Geography:
- China and Asia
640. Threshold Estimation on the Globalization-Poverty Nexus: Evidence from China
- Author:
- Zhicheng Liang
- Publication Date:
- 06-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- China has experienced rapid integration into the global economy and achieved remarkable progress in poverty reduction over the last two decades. In this paper, by employing panel data covering twenty-five Chinese provinces over the period of 1986- 2002, and applying the endogenous threshold regression techniques, we empirically investigate the globalization-poverty nexus in China, paying particular attention to the nonlinearity of the impact of globalization on the poor. Estimation results provide strong evidence to suggest that there exists a threshold in the relationship between globalization and poverty: globalization is good for the poor only after the economy has reached a certain threshold level of globalization.
- Topic:
- Economics, Globalization, and Poverty
- Political Geography:
- China and Asia
641. Development Strategy, Viability, and Economic Institutions: The Case of China
- Author:
- Mingxing Liu, Pengfei Zhang, Shiyuan Pan, and Justin Yifu Lin
- Publication Date:
- 05-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper explores the politically determined development objectives and the intrinsic logic of government intervention policies in east developed countries. It is argued that the distorted institutional structure in China and in many least developed countries, after the Second World War, can be largely explained by government adoption of inappropriate development strategies. Motivated by nation building, most least-developed countries, including the socialist countries, adopted a comparative advantage defying strategy to accelerate the growth of capital-intensive, advanced sectors in their countries. In the paper we also statistically measure the evolution of government development strategies and the economic institutions in China from 1950s to 1980s to show the co-existence and coevolution of government adoption of comparative advantage defying strategy and the trinity system.
- Topic:
- Development, Economics, and Government
- Political Geography:
- China and Asia
642. Economic Development Strategy, Openness and Rural Poverty: A Framework and China's Experiences
- Author:
- Justin Yifu Lin and Peilin Liu
- Publication Date:
- 04-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper argues that both openness and poverty in a country are endogenously determined by the country's long-term economic development strategy. Development strategies can be broadly divided into two mutually exclusive groups: (i) the comparative advantage-defying (CAD) strategy, which attempts to encourage firms to deviate from the economy's existing comparative advantages in their entry into an industry or choice of technology; and (ii) the comparative advantage-following (CAF) strategy, which attempts to facilitate the firms' entry into an industry or choice of technology according to the economy's existing comparative advantages.
- Topic:
- Development, Economics, and Poverty
- Political Geography:
- China and Asia
643. Globalization and the Urban Poor in China
- Author:
- Guanghua Wan and Yin Zhang
- Publication Date:
- 04-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper examines the distributional impact of globalization on the poor in urban China. Employing the kernel density estimation technique, we recovered from irregularly grouped household survey data the income distribution for 29 Chinese provinces for 1988-2001. Panels of the income shares of the poorest 20, 10 and 5 per cent of the urban residents were then compiled. In a fixed-effect model, two of the central conclusions of Dollar and Kraay (2002)—that 'the incomes of the poor rise equi-proportionately with average income' and that trade openness has little distributional effect on poverty—were revisited. Our results lend little support to either of the Dollar-Kraay conclusions, but instead indicate that average income growth is associated with worsening income distribution while globalization in general, and trade openness in particular, raises the income shares of the poor. It is also found that openness to trade and openness to FDI have differential distributional effects. The beneficial effect of trade was not restricted to the coastal provinces only, but also weakened significantly after 1992. These findings are robust to allow for nonlinearity in the effect of globalization and to control for the influence of several other variables.
- Topic:
- Economics, Globalization, and Poverty
- Political Geography:
- China and Asia
644. International Finance and the Developing World: The Next Twenty Years
- Author:
- Tony Addison
- Publication Date:
- 02-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Much has changed in international finance in the twenty years since UNU-WIDER was founded. This paper identifies five broad contours of what we might expect in the next twenty years: the flow of capital from ageing societies to the more youthful economies of the South; the growth in the financial services industry in emerging economies and the consequences for their capital flows; the current strength in emerging market debt, and whether this represents a change in fundamentals or merely the effect of low global interest rates; the impact of globalization in goods markets in lowering inflation expectations, and therefore global bond yields; and the implications of the adjustment in global imbalances between Asia (in particular China) and the United States for emerging bond markets as a whole. The paper ends by noting the paradox that today we see ever larger amounts of capital flowing across the globe in search of superior investment returns, and yet the financing needs of the poorer countries are still largely unmet.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- United States, China, and Asia
645. Reforming U.S. Patent Policy: Getting the Incentives Right
- Author:
- Keith E. Mascus
- Publication Date:
- 11-2006
- Content Type:
- Working Paper
- Institution:
- Council on Foreign Relations
- Abstract:
- America's robust economic competitiveness is du e in no small part to a large capacity for innovation. That capacity is imperiled, however, by an increasingly overprotective patent system. Over the past twenty-five years, American legislators and judges have operated on the principle that stronger patent protection engenders more innovation. This principle is misguided. Although intellectual property rights (IPR) play an important role in innovation, the recent increase in patent protection has not spurred innovation so much as it has impeded the development and use of new technologies.
- Topic:
- Development, Economics, and Markets
- Political Geography:
- United States, China, and America
646. Economic Size Trumps All Else? Lessons from BRICSAM
- Author:
- Timothy Shaw, Andrew F. Cooper, and Agata Antkiewicz
- Publication Date:
- 12-2006
- Content Type:
- Working Paper
- Institution:
- Centre for International Governance Innovation
- Abstract:
- Continuing CIGI's BRICSAM research, this paper questions whether size (economic or population) of emerging economies alone is enough to warrant accommodation in the rules and structures of the international system. The global realignment of states following the resulting power vacuum brought on by the end of the Cold War is finally materializing, as a new triangular formation has taken shape: the 'first world' club of the OECD; the 'second world' of emerging economies; and, a heterogeneous 'third world' of the rest. The interplay between and mobility among these groups of states deserves in-depth analysis. The core of this paper observes the economic and social trends of countries in the second tier, and their upwards aspirations towards the top-tier of the global architecture. Traced through a variety of indices, the growth of the BRICSAM group of countries (Brazil, Russia, India, China, South Africa, ASEAN-4 and Mexico) is demonstrated to be a powerful force in international economics and political economy. For the inclusion of these states, a change in the key aspects of global economic governance, the international architecture and geopolitics seems inevitable, and with it, new challenges arise for decision-makers and scholars alike.
- Topic:
- Cold War, Development, Economics, and Globalization
- Political Geography:
- Russia, China, India, South Africa, Brazil, and Mexico
647. The Asian Economic Revolution and Canadian Trade Policy
- Author:
- John Whalley
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- Centre for International Governance Innovation
- Abstract:
- This paper discusses the broad orientation of Canada's trade policy relative to two major historical phases of development based on a secure national market behind the National Policy from 1879 until the 1930s, and progressive integration with the United States (US) through Bilateral Agreements (1930s), the Auto Pact (1965), the Canada-US Free Trade Agreement (1987) and the North American Free Trade Agreement (NAFTA) (1994). Currently, Canada exports approximately 85% to the US, but imports from China account for 8% and are growing at over 20% a year. Sharply unbalanced (surplus) trade with the US is counterbalanced by unbalanced deficit trade with China. A scenario of elevated growth in Asia (principally China, India, and the Association of Southeast Asian Nations or ASEAN) poses challenges of relative disintegration from North America and growing global integration centered on Asia. Seemingly a series of implications follow; including positioning Canada within the emerging network of regional agreements in Asia, more resourcebased and Western Canada focused trade and infrastructure development, and responding to capital market integration with Asia. Broader issues include the potential adjustments facing Central Canada as Asian imports of manufactures displace both imported manufactures from the US and domestic production are raised.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, China, Canada, Asia, and North America
648. Mobilizing Talent for Global Development
- Author:
- Andrs Solimano
- Publication Date:
- 08-2006
- Content Type:
- Policy Brief
- Institution:
- United Nations University
- Abstract:
- The generation of new ideas and their application for productive uses is an important engine for growth and development. This is an area in which developing countries usually lag behind developed countries and is where development gaps are more evident. Behind the generation of ideas, innovations, and new technologies there is 'human talent': an inner capacity of individuals to develop ideas and objects, some of them with a high economic value. The 'human factor' is critical to the success or failure of many endeavours. Several countries, particularly China and India, followed by Russia, Poland, and some Latin American countries, are becoming an important source of talented people with PhDs and degrees in science, engineering, and other areas that can lead to change in the international patterns of comparative advantages and reduce development gaps. Part of the new talent formed in developing countries goes to live and work to developed countries, typically the USA, UK, and other OECD nations. At the same time multinational corporations are outsourcing several of their productive and service activities, including research and development, to developing countries (China and India are main destinations) to take advantage of the (less expensive) talent being developed there. Today, therefore, we see a double movement of talent and capital around the globe: on the one hand talent from developing countries is moving north seeking better opportunities where people are equipped with more capital, technologies, and effective organizations. On the hand capital from the north pursues talent in the south; a process largely led by multinational corporations.
- Topic:
- Development, Economics, Human Welfare, and Migration
- Political Geography:
- United States, China, United Kingdom, and India
649. China: Toward a Consumption-Driven Growth Path
- Author:
- Nicholas R. Lardy
- Publication Date:
- 10-2006
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- In December 2004 China's top political leadership agreed to fundamentally alter the country's growth strategy. In place of investment and export-led development, they endorsed transitioning to a growth path that relied more on expanding domestic consumption. Since 2004, China's top leadership, most notably Premier Wen Jiaobao in his speech to the National People's Congress in the spring of 2006, has reiterated the goal of strengthening domestic consumption as a major source of economic growth. This policy brief examines the reasons underlying the leadership decision, the implications of this transition for the United States and the global economy, and the steps that have been taken to embark on the new growth path.
- Topic:
- International Relations, Development, and Economics
- Political Geography:
- United States, China, and Asia
650. What Could Go Wrong?
- Author:
- Harry Harding
- Publication Date:
- 01-2006
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- China has done remarkably well in its development over the last twenty-five years. It has achieved and sustained high rates of economic growth, lifting millions out of poverty. It has achieved a significant place in the international economy. It is widely regarded as a major power, not only in Asia but also increasingly on a global stage. Looking ahead, however, things could go wrong – possibly quite seriously wrong – for China, and if China experiences serious problems, its size and its expanded role in the world mean that there could be serious consequences for the broader international community as well.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- China and Asia
651. China Succeeding Beyond Expectations
- Author:
- Albert Kiedel
- Publication Date:
- 01-2006
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- What are the implications if China sustains nine-percent growth through 2010? This is the basic question posed by conference organizers. The relevant time frame is what matters most. If China merely maintains nine-percent growth until the year 2010, the implications are not great. Too much is left unknown about what comes after 2010. Even with nine-percent growth over the next five years, China in 2010 will still be at a relatively low level of performance, both overall and in per-capita terms. But if sustaining nine-percent growth to 2010 means that China has launched on-going reforms that will continue to engineer institutional changes needed for a market economy's successful commercial and political management, then the resulting successful development trajectory in the rest of the century will generate profound and, from today's perspective, unexpected consequences.
- Topic:
- International Relations, Development, and Economics
- Political Geography:
- China and Asia
652. Comments on China as a Regional Player
- Author:
- Edward J. Lincoln
- Publication Date:
- 01-2006
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- China ought to be able to produce a relatively high economic growth rate over at least the next decade. There are a number of problems confronting the economy, but one of the great lessons of the past half-century of world economic growth is how much growth can result even when economies have considerable institutional flaws. Economists usually speak about the need to get the “fundamentals” right to produce economic growth, but we should also keep in mind that nations need not get have a perfect set of institutions and rules to generate growth.
- Topic:
- Economics, International Trade and Finance, and Regional Cooperation
- Political Geography:
- China and Asia
653. Taiwan In Search of a Strategic Consensus
- Author:
- Banning Garrett, Franklin Kramer, and Jonathan M. Adams
- Publication Date:
- 03-2006
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- At the beginning of 2006, Taiwan is confronted with difficult choices that it currently seems unprepared to face. Cross-Strait tensions have diminished in the last year and Taiwan's economy has grown at an annualized rate of about 3.6 percent, which is respectable if not robust by East Asian standards. Taiwan, however, also faces an East Asian future which likely includes an increasingly important role for its relations with the Mainland as China becomes an ever more important economic and political factor regionally and globally.
- Topic:
- Foreign Policy, Economics, and International Trade and Finance
- Political Geography:
- China, Taiwan, East Asia, and Asia
654. The Rule of Law in China: Incremental Progress
- Author:
- Jamie P. Horsley
- Publication Date:
- 04-2006
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- Western media reporting on China does not give the impression of a rule of law country. We read of frequent corruption scandals, a harsh criminal justice system still plagued by the use of torture, increasingly violent and widespread social unrest over unpaid wages, environmental degradation and irregular takings of land and housing. Outspoken academics, activist lawyers, investigative journalists and other champions of the disadvantaged and unfortunate are arrested, restrained or lose their jobs. Entrepreneurs have their successful businesses expropriated by local governments in seeming violation of the recently added Constitutional guarantee to protect private property. Citizens pursue their grievances more through extra-judicial avenues than in weak and politically submissive courts. Yet China's economy gallops ahead, apparently confounding conventional wisdom that economic development requires the rule of law.
- Topic:
- International Relations, Development, and Economics
- Political Geography:
- United States, China, and Asia
655. Class Formation or Fragmentation? Allegiances and Divisions Among Managers and Workers in State-Owned Enterprises
- Author:
- Kun-Chin Lin
- Publication Date:
- 03-2005
- Content Type:
- Working Paper
- Institution:
- Kellogg Institute for International Studies
- Abstract:
- This essay argues that crosscutting allegiances between managers and workers, and between existing workers and ex-workers, have formed strong social and psychological bases for sustained collective action and inaction during a period of organizational transformation in contemporary China. This thesis challenges the conventional wisdom that implies either class formation during marketization or the failure of such as an explanation for the alleged limits of the working class in mobilizing to defend its social contract against the central state. Through in-depth case studies of Chinese oilfields and refineries, I identify patterns of fragmentation deriving from intergenerational differences among the workers, managerial incentive structures, and the continuing reworking of patron-client relations between subgroups of workers and managers. I conclude that managers' and workers' passive and active responses to the state's rapid dismantling of the socialist notion of “class” in a self-sufficient work unit have placed a tangible social limit on authoritarian institutional innovation.
- Topic:
- Economics, Emerging Markets, and Government
- Political Geography:
- China
656. Adjusting Chinese Bilateral Trade Data: How Big is China's Trade Surplus
- Author:
- John W. Schindler and Dustin H. Beckett
- Publication Date:
- 04-2005
- Content Type:
- Working Paper
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- Hong Kong plays a prominent role as a re-exporter of a large percentage of trade bound for or coming from China. Current reporting practices in China and its trading partners do not fully reflect this role and therefore provide a misleading picture of the origin or ultimate destination of Chinese exports and imports. We adjust bilateral trade data for both China and its trading partners to correct for this problem. We also correct for differences due to markups in Hong Kong and different standards for reporting trade (c.i.f. versus f.o.b.). For 2003, we estimate that China's overall trade surplus was between $53 billion and $126 billion, larger than that reported in official Chinese data, but smaller than that reported by China's trading partners. We also provide evidence that, in general, the actual origin of a good that is transshipped through Hong Kong is correctly reported by the importing country, but the final destination of such goods is not correctly reported by the exporting country.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, China, and Hong Kong
657. Exchange Rate Pass-through to U.S. Import Prices: Some New Evidence
- Author:
- Jaime Marquez, Mario Marazzi, Nathan Sheets, Joseph Gagnon, Robert J. Vigfusson, Jon Faust, Robert F. Martin, Trevor Reeve, and John Rogers
- Publication Date:
- 04-2005
- Content Type:
- Working Paper
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- This paper documents a sustained decline in exchange rate pass-through to U.S. import prices, from above 0.5 during the 1980s to somewhere in the neighborhood of 0.2 during the last decade. This decline in the pass-through coefficient is robust to the measure of foreign prices that is included in the regression (i.e., CPI versus PPI), whether the estimation is done in levels or differences, and whether U.S. prices are included as an explanatory variable. Notably, the largest estimates of pass-through are obtained when commodity prices are excluded from the regression. In this case, the pass-through coefficient captures both the direct effect of the exchange rate on import prices and an indirect effect operating through changes in commodity prices. Our work indicates that an increasing share of exchange rate pass-through has occurred through this commodity-price channel in recent years. While the source of the decline in passthrough is difficult to pin down with certainty, our work points to several factors, including the reduced share of (commodity-intensive) industrial supplies in U.S. imports and the increased presence of Chinese exporters in U.S. markets. We detect a particular step down in the passthrough coefficient around the time of the Asian financial crisis and document a shift in the export pricing behavior of emerging Asian firms around that time.
- Topic:
- Economics, Industrial Policy, and International Trade and Finance
- Political Geography:
- United States and China
658. Agricultural Policy Reform in China
- Publication Date:
- 11-2005
- Content Type:
- Policy Brief
- Institution:
- The Organisation for Economic Co-operation and Development
- Abstract:
- China is the world's sixth largest economy and its most populous country, home to 1.3 billion people or 21% of the Earth's total population. But it faces a major challenge in providing its people with food – China has only 10% of the world's arable land and only one quarter of the average world water resources per person.
- Topic:
- Agriculture, Civil Society, and Economics
- Political Geography:
- China and Asia
659. Agricultural Policy Reform in Brazil
- Publication Date:
- 10-2005
- Content Type:
- Policy Brief
- Institution:
- The Organisation for Economic Co-operation and Development
- Abstract:
- Brazil is a major player in the global economy, one of the world's 10 largest economies, with a population of 180 million and vast natural resources. Brazil's agricultural land is exceeded only by China, Australia and the United States, and agriculture plays an important role in the country's economy. Primary agriculture accounts for 8% of GDP, while agricultural products account for about 30% of exports.
- Topic:
- International Relations, Agriculture, and Economics
- Political Geography:
- United States, China, Brazil, South America, and Australia
660. China's Governance in Transition
- Publication Date:
- 09-2005
- Content Type:
- Policy Brief
- Institution:
- The Organisation for Economic Co-operation and Development
- Abstract:
- China's economic reforms over the past two decades have brought remarkable growth, the development of a vibrant private sector and significant reform of the state-owned sector. Private businesses now represent some 57% of GDP, and productivity in the state-owned sector has improved significantly. However, a number of problems threaten to undermine prospects for sustainable growth. These notably include social tensions, partly due to increasing inequality within society and massive migration to the cities, but also linked to corruption, insufficient public services and rising unemployment as millions of workers have been laid off in the reform of the state-owned sector, while agriculture still displays huge structural under-employment.
- Topic:
- Development, Economics, and Government
- Political Geography:
- China and Asia
661. Economic Survey of China, 2005
- Publication Date:
- 09-2005
- Content Type:
- Policy Brief
- Institution:
- The Organisation for Economic Co-operation and Development
- Abstract:
- China's economic growth has averaged 9½% per cent over the past two decades. The rapid pace of economic change is likely to be sustained for some time. These gains have contributed not only to higher personal incomes, but also to a significant reduction in poverty. At the same time, the economy has become substantially integrated with the world economy. A large part of these gains have come through profound shifts in government policies. Reforms have allowed market prices and private investors to play a significant role in production and trade.
- Topic:
- Development, Economics, and Emerging Markets
- Political Geography:
- China and Asia
662. U.S. Trade Policy Toward China: Discrimination and its Implications
- Author:
- Rachel McCulloch and Chad P. Bown
- Publication Date:
- 06-2005
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- The bilateral relationship with China has become a major focus of U.S. trade policy. This paper examines recent U.S. policy toward imports from China, highlighting important explicitly and implicitly discriminatory elements. Discriminatory restrictions on U.S. trade with China protect competing domestic industries as well as non-Chinese foreign suppliers with an established presence in the U.S. market. Unlike discriminatory U.S. treatment of Japan in the 1980s, in which "gray-area" measures like voluntary export restraints were prominent, most U.S. actions toward China are fully consistent with current WTO rules, including the special terms of China's 2001 WTO accession. However, as with earlier discriminatory actions directed primarily at Japan, U.S. trade policy toward China is likely to have complex effects on global trade flows and may produce outcomes far different from those intended.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, China, and Asia
663. China's Currency: Not the Problem
- Author:
- Albert Keidel
- Publication Date:
- 06-2005
- Content Type:
- Policy Brief
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- In Washington, politicians and pundits have settled on a single magical solution for the country's economic ills: getting China to revalue its currency, the RMB. By any reasonable economic measure, however, the RMB is not undervalued. China does have a trade surplus with the United States, but it has a trade deficit with the rest of the world. And China's accumulation of dollar reserves is not the result of trade surpluses, but of large investment inflows caused in part by speculators' betting that China will yield to U.S. pressure. Focusing on China's currency is a distraction. If the United States wants to improve its economy for the long haul, it had best look elsewhere beginning with raising the productivity of American workers.
- Topic:
- Economics and Government
- Political Geography:
- United States, China, America, Washington, and Asia
664. Why Do Poverty Rates Differ From Region to Region? The Case of Urban China
- Author:
- Guanghua Wan and Yin Zhang
- Publication Date:
- 08-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper proposes a semi-parametric method for poverty decomposition, which combines the data-generating procedure of Shorrocks and Wan (2004) with the Shapley value framework of Shorrocks (1999). Compared with the popular method of Datt and Ravallion (1992), our method is more robust to misspecification errors, does not require the predetermination of functional forms, provides better fit to the underlying Lorenz curve and incorporates the residual term in a rigorous way. The method is applied to decomposing variations of urban poverty across the Chinese provinces into three components – contributions by the differences in average nominal income, inequality and poverty line. The results foreground average income as the key determinant of poverty incidence, but also attach importance to the influence of distribution. The regional pattern of the decomposition suggests provincial groupings based not entirely on geographical locations.
- Topic:
- Demographics, Economics, and Poverty
- Political Geography:
- China and Asia
665. BRICSAM and the Non-WTO
- Author:
- Agata Antkiewicz and John Whalley
- Publication Date:
- 10-2005
- Content Type:
- Working Paper
- Institution:
- Centre for International Governance Innovation
- Abstract:
- We discuss recent regional trade and economic partnership agreements involving the large population, rapidly growing economies (BRICSAM: Brazil, Russia, China, India, South Africa, ASEAN, and Mexico). Perhaps 50 out of 300 agreements that exist worldwide involve BRICSAM countries; most are recently concluded and will be implemented over the next few years. Along with extensive bilateral investment treaties, mutual recognition agreements, and other country to country (or region) arrangements they are part of what we term the non-WTO. This paper aims to document and characterize the agreements and analyze their possible impacts. Agreements differ in specificity, coverage and content. In some treaties there are detailed and specific commitments, but these also co-exist with seemingly vague commitments and (at times) opaque dispute settlement and enforcement mechanisms. Whether these represent a partial replacement of the World Trade Organization (WTO) process for newly negotiated reciprocity based on global trade liberalization or largely represent diplomatic protocol alongside significant WTO disciplines is the subject of this paper.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- Russia, China, India, Asia, South Africa, Brazil, and Mexico
666. Prospects for Regional Free Trade in Asia
- Author:
- Gary Clyde Hufbauer and Yee Wong
- Publication Date:
- 10-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Frustrated with lackluster momentum in the WTO Doha Round and the Asia Pacific Economic Cooperation (APEC) forum, and mindful of free trade agreement (FTA) networks centered on the United States and Europe, Asian countries have joined the FTA game. By 2005, Asian countries (excluding China) had ratified 14 bilateral and regional FTAs and had negotiated but not implemented another seven. Asian nations are also actively negotiating some 23 bilateral and regional FTAs, many with non-Asian partners, including Australia, Canada, Chile, the European Union, India, and Qatar. China has been particularly active since 2000. It has completed three bilateral FTAs—Thailand in 2003 and Hong Kong and Macao in 2004—and is initiating another 17 bilateral and regional FTAs. However, a regional Asian economic bloc led by China seems distant, even though China accounts for about 30 percent of regional GDP. As in Europe and the Western Hemisphere, many Asian countries are pursuing FTAs with countries outside the region. On present evidence, the FTA process embraced with some enthusiasm in Asia, Europe, and the Western Hemisphere more closely resembles fingers reaching idiosycratically around the globe rather than politico-economic blocs centered respectively on Beijing, Brussels, and Washington.
- Topic:
- Economics, International Trade and Finance, and Regional Cooperation
- Political Geography:
- United States, China, Europe, Washington, Canada, India, Beijing, Asia, Australia, Qatar, Chile, Hong Kong, Brussels, and Macao
667. What Might the Next Emerging-Market Financial Crisis Look Like?
- Author:
- Morris Goldstein and Anna Wong
- Publication Date:
- 07-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This paper addresses the following question: If a financial crisis affecting a group of emerging economies were to take place sometime over the next three years, where would the crisis likely originate, how could it be transmitted to other economies, and which economies would be most affected by particular transmission or contagion mechanisms? A set of indicators is presented to gauge the vulnerability of individual emerging economies to various shocks, including a slowdown in import demand in both China and the United States, a fall in primary commodity prices, increased costs and lower availability of external financing, alternative patterns of exchange rate changes, and pressures operating on monetary and fiscal policies in emerging economies.
- Topic:
- Economics, Emerging Markets, Globalization, and International Trade and Finance
- Political Geography:
- United States and China
668. The Chinese Economy: Prospects and Key Policy Issues
- Author:
- Morris Goldstein
- Publication Date:
- 04-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- No abstract is available.
- Topic:
- Economics, Industrial Policy, and International Trade and Finance
- Political Geography:
- China and Asia
669. Global Economic Prospects: Slower But Still Solid Growth in 2005; Worries About Growth and Inflation for 2006
- Author:
- Michael Mussa
- Publication Date:
- 04-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- After surging to the highest growth rate in a generation, world real GDP is set to slow from a rate of just over 5 percent for 2004 to about 4 percent for 2005 and a tad slower for 2006. The economic slowdowns in several important economies in the second half of last year, including much of continental Europe and Japan, already make it clear that year-over-year growth will slow for 2005. But the continued strong growth of domestic demand in other countries, most notably the United States and China, virtually assures that global growth this year will not fall below potential.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, Japan, China, Europe, Israel, and East Asia
670. China's Role in the Revived Bretton Woods System: A Case of Mistaken Identity
- Author:
- Nicholas R. Lardy and Morris Goldstein
- Publication Date:
- 03-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- According to a popular argument put forward by three Deutsche Bank economists (Dooley, Folkerts-Landau, and Garber, here after DFG), one needn't worry about the sustainability of either the large US current account deficit or the undervalued exchange rates of a group of Asian economies (Dooley, Folkerts-Landau, and Garber 2003, 2004a, 2004b, 2004c; Folkerts-Landau 2004). In their view, the United States and the Asian economies have entered into an implicit contract—the so-called revived Bretton Woods system (hereafter BW2)—that can comfortably carry on for another decade or two, with significant net benefits to both parties.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, China, and Asia
671. China and the World Economy Workshop. Conference Summary
- Author:
- Robert Kapp
- Publication Date:
- 12-2005
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- Peter Bottelier, the principal presenter of this topic, opened by noting that much discussion now surrounds the evolving “new line” embodied in China's economic plans for the next five years. The three agricultural questions, self-innovation, regional adjustment, opening up of a win-win “harmonious society,” and economizing on energy use: what do these and other much-discussed new terms really mean?
- Topic:
- Economics, Globalization, and International Trade and Finance
- Political Geography:
- China and Asia
672. China as Producer: Chinese Industry After 25 Years of Reform
- Author:
- Thomas Rawski
- Publication Date:
- 12-2005
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- Beginning with the start of reform in the late 1970s, China's industry has recorded impressive growth of output, labor productivity, and exports as well as dramatic upgrading of the quality and variety of output. These gains have occurred in spite of difficulties arising from lethargic state enterprises, inadequate corporate governance, excessive official intervention, corruption, and weak financial institutions.
- Topic:
- Economics, Industrial Policy, and International Trade and Finance
- Political Geography:
- China and Asia
673. China as Consumer
- Author:
- Kenneth Lieberthal
- Publication Date:
- 12-2005
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- This article seeks to examine two key issues that will be major drivers of consumption in China over the coming five years: urbanization and environmental amelioration. Whether the issues identified will be the largest factors over this time frame remains unclear, but each of these two areas warrants considerable attention as a very significant contributor to the future of consumer demand in China.
- Topic:
- Economics, Environment, and International Trade and Finance
- Political Geography:
- China and Asia
674. China as Employer and Consumer: Economic Outlook for the 11th Five-Year Plan (2006-2010)
- Author:
- Arthur R. Kroeber
- Publication Date:
- 12-2005
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- China's impressive economic growth of the past quarter century (9.4 percent average annual real GDP growth between 1980 and 2004, by official figures) is not miraculous; on the contrary, it can largely be explained by conventional models of economic development.
- Topic:
- Economics, Human Welfare, and International Trade and Finance
- Political Geography:
- China and Asia
675. Hu Jintao's Outbox
- Author:
- Joseph Fewsmith
- Publication Date:
- 12-2005
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- China has now sustained two and a half decades of high-speed growth. This growth has been even faster with regard to exports and China's role in international trade. Domestically, a capitalist tendency seems to be everywhere, while internationally the rise of China, whether peaceful or not, seems – at least to some – to threaten Western jobs, prosperity, and the international order. The focus of this paper, however, is not this question of whether or how China poses a threat to the West but rather an old (but new) question of how this “capitalist” conversion is compatible with the continued rule of a communist party. This is a question of considerable practical import, as people contemplate what the continued growth of the Chinese economy might mean for the political stability of that country, but it is also a question of considerable theoretical import: Leninist parties that sought to “include” external interests, it was argued, are on the way to collapse. It is only a matter of time. The time frame for China has lasted longer than theoreticians had supposed, though they might yet prove to be right – perhaps the Chinese Communist Party (CCP) has lasted longer than people imagined but it might still be on the road to collapse. This point of view would find supporters, both in the West and in China, but even if they prove right, it is important to inquire more deeply about what is going on in China, whether institutions are being created, and if so whether they might provide a foundation for a post-communist China or whether they suggest a more chaotic future.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- China and Asia
676. Firm Size, Technical Efficiency and Productivity Growth in Chinese Industry'
- Author:
- Dic Lo and Yuk-Shing Cheng
- Publication Date:
- 12-2004
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- Since the mid-1990s, China's state leadership has adopted a policy of nurturing the competitiveness of large state-owned industrial enterprises. The implications of this policy have been a matter of debate in the literature. This paper seeks to provide some useful input into the debate. With a view of investigating into the potential of long-term development of large enterprises, we estimate the “sequential production technology” in computing the Malmquist productivity index for various size-groups of enterprises in Chinese industry. Our findings indicate that large enterprises did register the fastest productivity growth and improvement in technical efficiency in the 1994-97 period. It thus appears that large-scale, mainly state-owned Chinese enterprises have exhibited the potential of m a king noticeable improvements and the relevant state policy does have its justification.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- China
677. China's Nexus of Foreign Trade and Economic Growth: Making Sense of the Anomaly
- Author:
- Dic Lo
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- Using a range of specifications that are standard in the relevant literature, this paper finds that China's rapid and sustained economic growth in the reform era has tended to be negatively correlated with its export growth and positively correlated with its import growth. This finding runs counter to widely -held perceptions on China's nexus of foreign trade and economic growth, and thus presents a serious challenge for interpretation. On the basis of some further regression analyses, and drawing on a number of applied studies on the subject matter, the paper argues that the finding is plausible and of complex ramifications. The conclusion which this paper arrives at, therefore, is that the Chinese experience has tended to be a case of strategic integration into the world market, rather than conforming to the standard neoclassical thesis of trade regime neutrality.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- China
678. Is China "Exporting Deflation"?
- Author:
- Steven B. Kamin, Mario Marazzi, and John W. Schindler
- Publication Date:
- 01-2004
- Content Type:
- Working Paper
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- In the past few years, observers increasingly have pointed to China as a source of downward pressure on global prices. This paper evaluates the theoretical and empirical evidence bearing on the question of whether China's buoyant export growth has led to significant changes in the inflation performance of its trading partners. This evidence suggests that the impact of Chinese exports on global prices has been, while non-negligible, fairly modest. On a priori grounds, our theoretical analysis suggests that China's economy is still too small relative to the world economy to have much effect on global inflation: a back-of-the-envelope calculation puts that effect at about 1/3 percentage point in recent years. In terms of the empirical evidence, we identify a statistically significant effect of U.S. imports from China on U.S. import prices, but given the size of this effect and the relatively low share of imports in U.S. GDP, the ultimate impact on the U.S. consumer prices has likely been quite small. Moreover, imports from China had little apparent effect on U.S. producer prices. Finally, using a multi-country database of trade transactions, we estimate that since 1993, Chinese exports lowered annual import inflation in a large set of economies by 1/4 percentage point or less on average, similar to the prediction of our theoretical model.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- China and Asia
679. A New World Map in Textiles and Clothing
- Publication Date:
- 10-2004
- Content Type:
- Policy Brief
- Institution:
- The Organisation for Economic Co-operation and Development
- Abstract:
- The textile and clothing industries provide employment for tens of million of people, primarily in developing countries, and accounted for USD 350 billion in merchandise exports in 2002, or 5.6% of the world total. The current rules governing world trade in textiles and clothing will change drastically at the end of 2004, when countries will no longer be able to protect their own industries by means of quantitative restrictions on imports of textile and clothing products. What will this mean for cotton growers in Burkina Faso and Turkey, fashion retailers in France and the United States, or shirt factories in Bangladesh, the Dominican Republic or China?
- Topic:
- Civil Society, Development, Economics, and Industrial Policy
- Political Geography:
- Bangladesh, United States, China, Turkey, and France
680. Globalization and Regional Income Inequality: Evidence from within China
- Author:
- Guanghua Wan, Zhao Chen, and Ming Lu
- Publication Date:
- 11-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- China's recent accession to the WTO is expected to accelerate its integration into the world economy, which aggravates concerns over the impact of globalization on the already rising inter-region income inequality in China. This paper discusses China's globalization process and estimates an income generating function, incorporating trade and FDI variables. It then applies the newly developed Shapley value decomposition technique to quantify the contributions of globalization, along with other variables, to regional inequality. It is found that (a) globalization constitutes a positive and substantial share to regional inequality and the share rises over time; (b) capital is one of the largest and increasingly important contributor to regional inequality; (c) economic reform characterized by privatization exerts a significant impact on regional inequality; and (d) the relative contributions of education, location, urbanization and dependency ratio to regional inequality have been declining.
- Topic:
- Economics and Globalization
- Political Geography:
- China and Asia
681. Output and Price Fluctuations in China's Reform Years: What Role did Money Play?
- Author:
- Guanghua Wan and Yin Zhang
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The Chinese economy underwent cyclical fluctuations in growth and inflation in the reform period. Contrasting views exist on the role of money in such fluctuations. This paper assesses these views employing structural VEC models based on the exchange equation. It is found that in the long run money accommodates, rather than causes, changes in output and prices. In the short run, price fluctuations are mostly attributable to shocks that have permanent effects on prices and money but not on real output. These shocks also account for a large proportion of fluctuations in money, and strongly influence the movements of output.
- Topic:
- Economics, Emerging Markets, and International Trade and Finance
- Political Geography:
- China and Asia
682. What Accounts for China's Trade Balance Dynamics?
- Author:
- Guanghua Wan and Yin Zhang
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper proposes a structural VAR model which extends the frameworks of Hoffmaister and Roldós (2001) and Prasad (1999). The model is then used to analyse the sources of China's trade balance fluctuations in the period of 1985–2000. Efforts are made to distinguish the forces which underlie the long-run trend in trade balance from those with transitory impacts. The effects of four types of shock are examined—the foreign supply shock, the domestic supply shock, the relative demand shock, and the nominal shock. Among other findings, two emerge as important. First, the movements in China's trade are largely the result of real shocks. Second, the Renminbi is undervalued, yet changes in the exchange rate bear little on the trade balance. Therefore, monetary measures would not suffice to redress China's trade 'imbalance'.
- Topic:
- Economics, Emerging Markets, and International Trade and Finance
- Political Geography:
- China and Asia
683. China's Business Cycles: Perspectives from an AD–AS Model
- Author:
- Guanghua Wan and Yin Zhang
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper represents a first attempt to study China's business cycles using a formal analytical framework, namely, a structural VAR model. It is found that: (a) demand shocks were the dominant source of macroeconomic fluctuations, but supply shocks had gained more importance over time; (b) the driving forces of demand shocks were consumption and fixed investment in the first cycle of 1985–90, but shifted to fixed investment and world demand in the second cycle of 1991–96 and the post-1997 deflation period; and (c) macroeconomic policies did not play an important part either in initiating or counteracting cyclical fluctuations.
- Topic:
- Demographics, Economics, and Emerging Markets
- Political Geography:
- China
684. Divergent Means and Convergent Inequality of Incomes among the Provinces and Cities of Urban China
- Author:
- John Knight, Li Shi, and Zhao Renwei
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Two precisely comparable national household surveys relating to 1988 and 1995 are used to analyse changes in the inequality of income in urban China. Over those seven years province mean income per capita grew rapidly but diverged across provinces, whereas intra-province income inequality grew rapidly but converged across provinces. The reasons for these trends are explored by means of various forms of decomposition analysis. Comparisons are also made between the coastal provinces and the inland provinces. The decompositions show the central role of wages, and within wages profitrelated bonuses, together with the immobility of labour across provinces, in explaining mean income divergence. The timing of economic reforms helps to explain the convergence of intra-province income inequality. Policy conclusions are drawn.
- Topic:
- Demographics, Development, and Economics
- Political Geography:
- China and Asia
685. Income Inequality in Rural China: Regression-based Decomposition Using Household Data
- Author:
- Guanghua Wan and Zhangyue Zhou
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- A considerable literature exists on the measurement of income inequality in China and its increasing trend. Much less is known, however, about the driving forces of this trend and their quantitative contributions. Conventional decompositions, by factor components or by population subgroups, only provide limited information on the determinants of income inequality. This paper represents an early attempt to apply the regression-based decomposition framework to the study of inequality accounting in rural China, using household level data. It is found that geography has been the dominant factor but is becoming less important in explaining total inequality. Capital input emerges as a most significant determinant of income inequality. Farming structure is more important than labour and other inputs in contributing to income inequality across households.
- Topic:
- Demographics, Development, and Economics
- Political Geography:
- China and Asia
686. Fifty Years of Regional Inequality in China: A Journey through Central Planning, Reform, and Openness
- Author:
- Ravi Kanbur and Xiaobo Zhang
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper constructs and analyses a long-run time-series for regional inequality in China from the Communist Revolution to the present. There have been three peaks of inequality in the last fifty years, coinciding with the Great Famine of the late 1950s, the Cultural Revolution of the late 1960s and 1970s, and finally the period of openness and global integration in the late 1990s. Econometric analysis establishes that regional inequality is explained in the different phases by three key policy variables; the ratio of heavy industry to gross output value, the degree of decentralization, and the degree of openness.
- Topic:
- Development, Economics, Industrial Policy, and Political Economy
- Political Geography:
- China and Asia
687. CERI: Regional integration in Asia since China's entry into the WTO
- Author:
- Diana Hochraich
- Publication Date:
- 07-2004
- Content Type:
- Working Paper
- Institution:
- Centre d'Etudes et de Recherches Internationales
- Abstract:
- Since their economic development got under way, the ASEAN countries - which essentially manufacture labour-intensive products - have been marked by strong regional integration brought about by the segmentation of the production process engaged in by Japanese companies. In these countries, successive relocations resulted in de facto economic integration at a time when various political groupings intent on blocking the development of communism were also emerging. Since joining the WTO, China - the world's workshop - has become the hub for trade with the developed countries. In the face of such competition, the ASEAN countries will have to show their capacity to maintain their position in the value chain represented by the production of all of the Asian countries.
- Topic:
- Economics and Regional Cooperation
- Political Geography:
- China and Asia
688. What Kind of Landing for the Chinese Economy?
- Author:
- Nicholas R. Lardy and Morris Goldstein
- Publication Date:
- 11-2004
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Rarely has the outlook for the Chinese economy been so contested. The financial press widely quotes three alternative perspectives on the short-and medium-term outlook. One school argues that the Chinese government's recent efforts to rein in overly rapid growth are working and that the economy is now on a glide path to what is referred to as a soft landing. While “soft landing” is usually not fully defined, its chief feature in this case is that Chinese economic growth slows modestly from its current pace of 9 to 10 percent to around 8 percent and that the rate of job creation does not slow enough to constitute a major political challenge for the regime. At the other end of the spectrum is the hard landing school, which argues that the authorities to date have not tightened sufficiently, that loan and investment growth remain excessive, and that the authorities soon will be forced to take more drastic action that will trigger a sharp correction. Finally, the no landing school argues that China's efforts to slow growth modestly are misguided since the economy was not overheating in 2003 and early 2004. In this view, China is in the early stages of a secular boom that has several additional years to run.
- Topic:
- Economics and Political Economy
- Political Geography:
- China and Asia
689. Doubling the Global Work Force: The Challenge of Integrating China, India, and the Former Soviet Bloc into the World Economy
- Author:
- Richard B. Freeman
- Publication Date:
- 11-2004
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- In 1985, the global economic world (N. America, S. America, Western Europe, Japan, Asian Tigers, Africa) consisted of 2.5 billion people. In 2000 as a result of the collapse of communism, India's turn from autarky, China's shift to market capitalism, global economy encompassed 6 billion people. Had China, India, and the former Soviet empire stayed outside, global economy would have had 3.3 billion.
- Topic:
- International Relations, Economics, and Government
- Political Geography:
- Africa, Japan, China, America, India, Asia, and Western Europe
690. What Went Right in Japan
- Author:
- Adam S. Posen
- Publication Date:
- 09-2004
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Japan's recovery is strong. Real GDP growth will exceed 4 percent this year and likely be 3 percent or higher in 2005 and perhaps even 2006. The Japanese economy has been growing solidly for the last five quarters (average real 3.2 percent annualized rate), and the pace is sustainable, given Japan's underlying potential growth rate (which has risen to 2 to 2.5 percent per year) and the combination of catch-up growth closing the current output gap and some reforms that will raise the growth rate for quarters to come (though not permanently). Indicators of domestic demand beyond capital investment are increasingly positive, including housing starts bottoming out, inventories drawing down, and diminished deflation. Moreover, on the external side, while China was the main source of export growth in 2003, the composition of exports has become more balanced this year and is widening beyond that seen in other recoveries. Just as in the United States and other developed economies, a sharp slowdown in Chinese growth and a sustained further increase in energy prices represent the primary risks to the outlook.
- Topic:
- Development and Economics
- Political Geography:
- United States, Japan, China, Israel, East Asia, and Asia
691. Adjusting China's Exchange Rate Policies
- Author:
- Morris Goldstein
- Publication Date:
- 06-2004
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- During the past year, there has been considerable debate about, and much international criticism of, China's exchange rate and its currency regime. Yes, criticism of China in the United States would likely be more muted if the ongoing recovery were not so “jobless,” if employment in the US manufacturing sector had not (mainly for other reasons) declined so much in the three-year run-up to this presidential elect ion year, if so much attention were not focused on the very large bilateral US trade deficit with China instead of China's economically—more meaningful overall balance-of-payments position, and if the United States had not done such a poor job of improving its saving-investment imbalance—particularly in the public sector.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, China, and Asia
692. Asian Oil Market Outlook: Role of the Key Players
- Author:
- Jeffrey Brown and Kang Wu
- Publication Date:
- 10-2003
- Content Type:
- Policy Brief
- Institution:
- East-West Center
- Abstract:
- The Asia Pacific region's dynamic oil market is marked by strong growth in consumption, declining regional oil production, and over capacity in its highly competitive oil-refining sector. Its "key players" are China, India, Indonesia, Japan, and South Korea—a group that includes the region's five top consumers and three of its major producers—and developments in these countries will have commercial and strategic implications for the whole region. On the consumption side, Japan's slow growth in demand has failed to dampen regional growth, which is now driven by China and India's fast growing thirst for oil. On the supply side, Indonesia's inevitable transition to a net oil importer highlights the trend toward growing dependence on Middle East oil, which already comprises 42–90 percent of imports among the key players. In response to this trend, China, Japan, and South Korea are pushing to acquire overseas oil reserves, with Japan and China already locked in a fierce competition for projected Russian supplies—a type of struggle that will likely become more commonplace.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- Japan, China, Indonesia, Middle East, India, Asia, and South Korea
693. The Move to Preferential Trade in the Western Pacific Rim
- Author:
- John Ravenhill
- Publication Date:
- 06-2003
- Content Type:
- Policy Brief
- Institution:
- East-West Center
- Abstract:
- Western Pacific Rim states have been slow to participate in preferential trade agreements (PTAs). In the past four years, however, more than 40 PTAs involving these economies have been proposed or are being implemented. For the first time, Japan and China have either signed or are negotiating bilateral or plurilateral agreements. The new interest in PTAs reflects the perception that they have been successful in other parts of the world, and is reinforced by dissatisfaction with the region's existing trade groupings. Although arguments can be made in favor of PTAs, they amplify political considerations in trade agreements, may adversely affect the political balance in participating countries, impose costs on nonparticipants, and deplete scarce negotiating resources. Nevertheless, the number of western Pacific Rim states participating in PTAs continues to climb. Northeast Asian countries have been following Europe in exploiting loopholes in WTO rules on PTAs to protect their noncompetitive sectors, thereby strengthening their political positions, which will likely make global liberalization more difficult.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- Japan, China, Asia, and Australia/Pacific
694. China's State-Owned Enterprises: Thriving or Crumbling?
- Author:
- Christopher A. McNally
- Publication Date:
- 02-2003
- Content Type:
- Policy Brief
- Institution:
- East-West Center
- Abstract:
- Even though China's state firms lost their near-monopoly status after 1978, they still form the country's financial and industrial nucleus.Nevertheless, in early 1996 the total losses of these state-owned enterprises (SOEs) exceeded profits for the first time. With the economy threatened, offi-cialdom issued a mandate in 1997: SOEs must become profitable in three years. In 2001, statistics showed a massive turn around, and victory was declared. Despite doubts about the official statistics, substantial improvement did seem evident. The question was, what caused it? While massive layoffs and corporate restructuring did increase efficiency, most improvements have been the result of external factors such as debt restructuring and government-arranged buy-outs and mergers. This strategy offers short-term rewards, but could be a disaster in the long term. Real reform of China's state sector requires financial reforms that bite (even more urgent with WTO entry), serious moves toward a social security system for displaced workers, and more outright priva-tization of state firms to give non-state shareholders real power on their boards.
- Topic:
- Economics, Government, and Industrial Policy
- Political Geography:
- China
695. Are We Taking China's Future for Granted?
- Author:
- Joseph C. Folio
- Publication Date:
- 09-2003
- Content Type:
- Working Paper
- Institution:
- Institute for the Study of Diplomacy, Edmund A. Walsh School of Foreign Service, Georgetown University
- Abstract:
- During Fall 2003 the Schlesinger Working Group held two meetings (September 25th and November 3rd) to explore China's estimated political/ economic outlook and to determine what potential challenges might affect its projected future. The purpose of these meetings was not to predict a Chinese stumble or even collapse, but rather to examine events that could trigger a disruption of China's current, impressively successful economic trajectory, and to analyze what form that disruption could take. During the first meeting, participants identified potential disruption scenarios to which China remains vulnerable. The second meeting considered the implications of disruption for both China and the United States, and how these scenarios might affect U.S. policy. Working Group members did not attempt to assign probabilities for the identified potential disruptions or “failures.” Rather, they focused on the hurdles or challenges posed by these disruption scenarios, which the Chinese leadership would need to confront successfully in order to avoid losing control or endangering national cohesion. Participants generally agreed that any major disruption would most likely derive from an external shock that might negatively affect China's economic situation and possibly ignite collateral internal disruption via domestic unrest or leadership division. The group concurred that the Chinese leadership has sufficient strength and cohesion to manage most forms of internal disruption, or at least to adapt quickly and effectively to those that arise.
- Topic:
- International Relations, Diplomacy, and Economics
- Political Geography:
- United States and China
696. China and Emerging Asia: Comrades or Competitors?
- Author:
- John W. Schindler, John G. Fernald, Prakash Loungani, and Alan J. Ahearne
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- Do increases in China's exports reduce exports of other emerging Asian economies? We find that correlations between Chinese export growth and that of other emerging Asian economies are actually positive (though usually not significant), even after controlling for trading-partner income growth and real effective exchange rates. We also present results from a VAR estimation of aggregate trade equations on the relative importance of foreign income and exchange rates in determining Asian export growth. Although exchange rates do matter for export performance, the income growth of trading partners matters even more. In addition, we examine specific products and find evidence that a considerable shifting of trade patterns is taking place, consistent with a 'flying geese' pattern in which China and ASEAN-4 move into the product space vacated by the NIEs. Our results suggest that China and emerging Asia are both comrades (overall) and competitors (in specific products).
- Topic:
- Economics and Emerging Markets
- Political Geography:
- China and Asia
697. Attracting Investment to China
- Publication Date:
- 09-2003
- Content Type:
- Policy Brief
- Institution:
- The Organisation for Economic Co-operation and Development
- Abstract:
- Foreign investment has played an important role in China's economic development for almost a quarter of a century and is vital for that development to continue. But while China has been highly successful in attracting foreign direct investment (FDI) so far, and has made significant progress in improving its FDI policy framework, it has not fully exploited its potential to attract investment from OECD countries. To make the most of the potential benefits of joining the World Trade Organization (WTO) and to increase FDI inflows while enhancing their contribution to domestic development China will need to persevere with efforts to bring its laws and regulations into harmony with internationally recognised standards and to ensure they are fully and consistently implemented at local level.
- Topic:
- Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
- Political Geography:
- China
698. Does China Matter? The Global Economic Issues
- Author:
- Stuart Harris
- Publication Date:
- 09-2003
- Content Type:
- Working Paper
- Institution:
- Australian National University Department of International Relations
- Abstract:
- In 1999, Gerry Segal, then Director of Research at the International Institute of Strategic Studies, wrote an article in Foreign Affairs entitled 'Does China matter?'. His article ranged across economic, political and strategic issues but his overall conclusion was that China's importance had been greatly exaggerated. As far as economic questions were concerned, Segal saw China as a small market 'that matters little to the world, especially outside Asia'.
- Topic:
- International Relations, Economics, and Globalization
- Political Geography:
- China and Asia
699. China and Southeast Asia: The Difference of a Decade
- Author:
- Catharin Dalpino and Juo-yu Lin
- Publication Date:
- 04-2003
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- Over a span of several years, China's relations with the nations of Southeast Asia have shifted in quiet increments. The accumulated effect, however, has been profound. A concerted diplomatic effort to woo countries of the Association of Southeast Asian Nations (ASEAN), which now includes all countries in the region excepting East Timor, has reaped multiple benefits for Beijing. It is beginning to alter the political balance in the region as alignments with extra-regional powers are shifting, however subtly. In some aspects, the change is more dramatic. Economic relations have expanded rapidly; for example, trade between China and Southeast Asia is seventeen times larger today than it was twenty-five years ago.
- Topic:
- Economics, International Political Economy, and International Trade and Finance
- Political Geography:
- China, Beijing, Asia, and Southeast Asia
700. Chinese State, Chinese Society: Facing a New Century
- Author:
- Jae Ho Chung and Zhang Ye
- Publication Date:
- 04-2003
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- The Sixteenth Congress of the Chinese Communist Party (CCP) was convened during November 8-15, 2002. The Congress reconfirmed the Party's strong commitment to the three key tasks of achieving modernization, accomplishing national unification, and safeguarding world peace and development. The outgoing CCP General Secretary Jiang Zemin, on behalf of the Fifteenth Central Committee, emphasized the need for further political changes at the grassroots and presented the target of quadrupling China's gross domestic product (GDP) by 2020. Jiang also projected that China's armed forces would possess fewer but better troops “ with Chinese characteristics. ”
- Topic:
- Economics, International Political Economy, and International Trade and Finance
- Political Geography:
- China and Asia