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751. 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

752. 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

753. One Third of the World's Growth and Inequality

Author:
Danny Quah
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper studies growth and inequality in China and India—two economies that account for a third of the world's population. By modelling growth and inequality as components in a joint stochastic process, the paper calibrates the impact each has on different welfare indicators and on the personal income distribution across the joint population of the two countries. For personal income inequalities in a China-India universe, the forces assuming first-order importance are macroeconomic: Growing average incomes dominate all else. The relation between aggregate economic growth and within-country in- equality is insignificant for inequality dynamics.
Topic:
Development and Economics
Political Geography:
China, South Asia, India, and Asia

754. Household Income Dynamics in Rural China

Author:
Martin Ravallion and Jyotsna Jalan
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
It is well known in theory that certain forms of non-linear dynamics in household incomes can yield poverty traps and distribution-dependent growth. The potential implications for policy are dramatic: effective social protection from transient poverty will be an investment with lasting benefits, and pro-poor redistribution will promote aggregate economic growth. We test for non-linearity in the dynamics of household expenditures and incomes using panel data for rural south-west China. While we find evidence of non-linearity, there is no sign of a dynamic poverty trap. Existing private and social arrangements in this setting appear to protect vulnerable households from the risk of destitution. However, the concavity we find in the recursion diagram does imply that the speed of recovery from an income shock is lower for the poor, and that current inequality reduces growth in mean incomes.
Topic:
Development and Economics
Political Geography:
China and Asia

755. Political Office, Kinship, and Household Wealth in Rural China

Author:
Andrew G. Walder and Litao Zhao
Publication Date:
12-2002
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
For more than two decades after the demise of Maoist collectivism, a resurgent market economy has deeply transformed the social structure of rural China. By the mid-1980s, peasant households had already returned to historical marketing patterns of agricultural produce and other sidelines and services. By the turn of the century, almost 140 million individuals, or 30 percent of the rural labor force, earned regular incomes from wage labor outside agriculture. Twenty million rural households had registered individual family enterprises, and two million of them had already grown into substantial private firms. A massive rural industrial sector grew up under public ownership in the 1980s, employing more than 80 million at its height. It was then extensively privatized in the 1990s, and is now less than half its former size. While these developments have been widely noted in studies of rural industrialization and income inequality, it is still far from clear how they have altered the structure and wealth of village political and economic elites.
Topic:
Communism, Economics, and Politics
Political Geography:
China and Asia

756. Privatization and Elite Mobility: Rural China, 1979-1996

Author:
Andrew G. Walder
Publication Date:
07-2002
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
The ideal types that motivate research on transitional economies have led to a neglect of the varied mechanisms that generate social change. One example is the implicit treatment of privatization as a single process whose initial impact will become more pronounced through time. Privatization in fact occurs via distinct mechanisms that have different consequences across types of assets and through time, as shown in an analysis of career trajectories over two decades in rural China. During the first decade, when privatization proceeded via the rapid expansion of household enterprise, ordinary individuals with nonagricultural work experience were the most likely to become private entrepreneurs. Village officials, their relatives, and public enterprise managers did not enter the private sector at rates higher than others. However, during the second decade the privatization of public enterprises began to transfer collective assets to individual ownership. During this period, public enterprise managers and the relatives of cadres emerged as the most likely to become private entrepreneurs. Private entrepreneurs, however, have yet to move into cadre posts, and cadres have yet to move into private entrepreneurship, at rates higher than others. Administrative elites have therefore proven resilient in the face of private-sector expansion, and the benefits of privatization have gradually shifted in their favor.
Topic:
Communism and Economics
Political Geography:
China and Asia

757. Russia's Southern Regions: Threats and Opportunities

Author:
Robert Orttung
Publication Date:
06-2002
Content Type:
Policy Brief
Institution:
EastWest Institute
Abstract:
Instability in Russia's southern regions poses a threat to the continuation of the country's overall political and economic reform, and to regional stability in Central Eurasia. These regions, which already possess Russia's most fragile local economics, face a variety of problems emanating from the weak and failing states to their immediate south. Most visibly, there is the threat of terrorism, an increasing flow of illegal narcotics from producers in Afghanistan, an influx of contraband goods that wipe out Russian jobs, and illegal immigration. With few resources and extensive corruption among key officials, Russia's southern regions are poorly equipped to deal with these problems. Developing mutually beneficial trade links between Russia's southern regions and its neighbors in Central Asia, China, and Mongolia can mitigate instability and economic stagnation in this region, help to rebuild regional economies, generate income, and better enable governments to provide security and basic human services to their people. The West can support these developments as well as help combat organized crime, target corruption, and improve border security.
Topic:
Security, Economics, International Cooperation, and Terrorism
Political Geography:
Afghanistan, Russia, China, Europe, Mongolia, and Asia

758. China — Securities Opening

Publication Date:
06-2002
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
The China Securities Regulatory Commission issued rules on June 3 outlining the participation of foreign firms in fund management and securities business. Issued earlier than expected, the rules re-state concessions made in the trade and investment agreement China signed with the United States in November 1999. Modernisation and liberalisation of the sector is a prerequisite to channelling more of China's 1 trillion dollars of private savings to equity investment.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States and China

759. At the Crossroads of Post-Communist Modernisation: Russia and China in Comparative Perspective

Author:
Linda Jakobson and Christer Pursiainen
Publication Date:
02-2001
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
“Modernity ends when words like progress, advance, development, emancipation, liberation, growth, accumulation, enlightenment, embetterment, avant-garde, lose their attraction and their function as guides to social action.” By this definition, Russia and China are both still undertaking extensive modernisation – though by very different means. Why have Russia and China chosen such different paths for their post-communist transitions? How do their strategies differ, and how are they interrelated? When – at what junctures - were the crucial choices made?
Topic:
Development, Economics, and Politics
Political Geography:
Russia, China, Europe, and Asia

760. What Drove Relative Wages in France? Structural Decomposition Analysis in a General Equilibrium Framework, 1970-92

Author:
Sébastien Jean and Olivier Bontout
Publication Date:
09-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper confronts a CGE model to observed evolutions in France, between 1970 and 1992, through a structural decomposition analysis. The choice of the model and the assumption of constant elasticities over time enable the structural change of the economy between two equilibria to be summarised through a set of four types of state variables, reflecting the effect of technical change, changes in factor supplies, shifts in consumption patterns, and international trade. Simulations then allow the contribution of each of these shocks to be assessed. We find that technical change had a strong positive impact on the relative wage of skilled to unskilled workers, while the impact of changes in factor supplies is strongly negative. The effect of international trade is far less important. However, if we take into account a trade-induced effect on productivity, then we find that trade substantially increased wage inequalities.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
China, Europe, and France