China＇s Trade Acceleration and the Deepening of an East Asian Regional Production Network

China＇s recent surge in trade has been associated with its deepening but contrasting trade relations with its two groups of key trading partners. On the one hand, China＇ s trade surpluses with the USA and the EU have risen rapidly, reaching US$144bn and US$91bn in 2006, respectively. On the other hand, China is importing heavily from its Asian neighbors. This diverging pattern of trade relations between China and its main trading partners reflects the continuous expansion and intensification of a complex cross-border production network in Asia, particularly for consumer electronics. In the process of deepening manufacturing sharing, China serves as an essential export platform for firms headquartered in the more advanced economies. These firms export intermediate goods from the relatively more advanced Asian economies to their affiliates in China where these inputs are assembled and then shipped to key export markets, including primarily the USA and the EU. One apparent outcome of the growing processing and assembly trade is the increased interdependency among Asian economies, which are now more dependent on each other than ever. It has also led to substantial structural changes and technological upgrading in China＇ s traded goods.     

China： Unscathed through the Global Financial Tsunami

This paper investigates the reasons behind the resilience of China＇s economy to the global financial tsunami. China ＇s economy is lowly leveraged in its banking, household, public and external sectors and, therefore, is less plagued by the global deleveraging than most developed economies. Chinese domestic sectors have improved significantly over the past decade, giving them larger capacity to cope with external shocks than during the Asian financial crisis a decade ago. Contrary to the conventional wisdom that China＇s economic growth is highly dependent on exports, we find that the main growth engine for China is domestic demand. Destocking, rather than falling exports, was the main cause of the sharp economic slowdown in China in late 2008 and early 2009. Therefore, the global economic slowdown should have limited impact on China＇s economy. We forecast a sustained eeonomic recovery in China in 2009-2011, with real GDP growth exceeding 10 percent in 2010.     

Effectiveness of China＇s Monetary Policy and Reform of Its Foreign Exchange System

I. Introduction The background of this research is related to continued disputes between China and its trading partners, and to the resulting international pressure on China’s foreign exchange (Forex) system. As the fastest growing economy in the world, China’s foreign trade has expanded at a fantastic pace and its trade surplus with the rest of the world is huge and rising. This remarkable success has encountered increasing criticism, whether correct or not, from the countries that feel t…     

What＇s So Special about China＇s Producer Services？ An Input-output Analysis

In the present study, five stylized facts about China ＂s producer services are established through international, intersectoral and intertemporal comparisons based on input --output tables. First, the overall service input ratio is the lowest in all the sample economies. Second, most producer services are supplied by the traditional labor-intensive sectors. Third, manufacturing is the biggest user of producer services, and service industry is the second, while the opposite is true for most of the other sample economies. Fourth, unlike other economies, China ＂s ＂R＆D＂ is characterized more by consumer services than producer services. Fifth, China has fairly lower service input ratios in almost all the industries. The backward and forward linkages coefficients are both smaller for ＂real estate activities＂ and ＂finance and insurance. ＂＂ Policy reform should focus not only on specific producer services but also on reducing obstacles that are inhibiting the balanced development of diverse producer services that will help China to optimize its economic structure.     

Regional Environmental Performance and Its Determinants in China

A growing awareness of environmental quality hasplaced increasedpressure on China to improve environmental protection and regulations in the country. How have the regional economies in the country performed in terms of environmental efficiency？ The answer to this question is yet to be explored in the case of China. The objective of this paper is to present a quantitative analysis of environmental performance in China＇s regional economies and to examine the determinants of regional variation in performance. The findings are used to draw policy implications for environmental protection and are helpful in the discussion of China＇s future sustainable development.     

Financial Development, Economic Growth and Adaptive Efficiency： A Comparison between China and Pakistan

The strong economic growth in China is difficult to reconcile with its inefficient financial system. The puzzle of China＇s financial development and growth can be explained through a dynamic criterion of adaptive efficiency, rather than through allocative efficiency. Using the framework of an autoregressive distributed lag model, the present paper tests the hypothesis that the GDP growth rate is dependent on financial development along with other variables in China and Pakistan. The hypothesis cannot be rejected in both cases. However, the results show that economic growth has a negative relationship with credit to the private sector in China. We conclude that financial development is a source of China＇s high growth rate and that the banking system is still under an evolutionary process, involving the pursuit of social objectives instead of the sole objective of profit maximization. Our results provide some implications for other developing countries like Pakistan.     

China＇s Current Real Estate Cycle and Potential Financial Risks

I. Introduction Since the late 1990s, the debate on China’s current real estate cycle has aroused great attention. The People’s Bank of China, China’s central bank, initiated a series of macroeconomic management policies to prevent the real estate market from overheating. Since the real estate bubble in the early 1990s, the Chinese Government is conscious to attach great importance to the possible financial risks and corresponding shocks to China’s economy of the real estate market ove…     

Transition of China＇s Diplomacy and Foreign Relations

The present paper focuses on the transformation of China＇s foreign affairs. The transformation is closely associated with and mutually reinforced by the developmental changes that have taken place in China. China＇s strong economic focus has had a profound effect on its foreign relations and international strategies. With sustained growth over the past three decades （1978-2008）, China has become an important member of the world community. In particular, its influence has been growing in the Asia-Pacific area. China＇s unique developmental model and path are recognized and scrutinized worldwide. The present paper discusses special aspects of foreign aid and also explores the changes in principles of and approaches taken in the application of foreign aid policies. Under dual external and internal pressure, China has to constantly adjust, renew and improve its approach to diplomatic and international relations.     

The Rise of China's Global Middle Class in an International Context

We estimate the size of the global middle class in China and 33 other countries and analyze China’s expanding middle class in an international context.The“ghbal middle class”is defined in terms of being neither poor nor rich in the developed world.China’s global middle class has grown rapidly and has been catching up with the middle class in developed countries.By 2018 China’s global middle class constituted 25 percent of China s population;in absolute size it was nearly double the size of the global middle class in the US and was similar in size to that of Europe.Cross-country analysis of the relationship between the middle-class share of the total population and GDP per capita reveals an inverted-U pattern.China is not an outlier from the cross-country pattern but the speed with which its middle-class has expanded is unusual.The only other countries with similarly large,rapid expansions of the middle class are transition economies.     

Nature/Culture Dichotomy in China’s Ecological Resettlement Policy——Research based on Wustu Village,IMAR,PRC

Ecological resettlement,as a subsidiary policy of the Central Government’s environmental policy,is now attracting increasing domestic and international attention.The amount of immigrants involved in the policy serves as one reason to raise concerns about the issue,and its side effects (especially the loss of ethnic cultures and the dilemma of some ethnic minority herders and farmers) gave rise to multi-lateral discussions about the policy.The ecological and economic effects of the policy are the primary focus of present research,while the cultural analysis (esp.concerning the social and political forces that fostered and implemented the policy) of the State’s environmental and ecological resettlement policy is lacking.Based on my field research in Wustu village,IMAR,this paper relates the cultural basis of these policies with China’s desire to establish a harmonious society and argues that respect for minority cultures as well as local participation of immigrants are key to solving China’s environment issues.     

Causes of the financial crisis and the need of monetary cooperation in East Asia

The Main causes of the East Asian financial crisis in 1997–98 can be divided into domestic and foreign ones. The domestic cause stems from structural and liquidity problems, with growing share of non‐performing loans in the financial sector, posing as the most visible manifestation of such problems. On the other side, there is the foreign cause, the sudden fall of the yen against the dollar under the region's unstable foreign exchange system and also its over‐dependency on the dollar. Unfortunately, these causes have not yet disappeared. In order to prevent another financial economic crisis from recurring and to secure the regional currency stability in the long run, an external safety device is indispensable. The purpose of the East Asian monetary cooperation device is not only to absorb the external shocks caused by abrupt changes in the dollar/yen rate and sudden flow of capital, but also to settle international liquidity problems among the regional countries. If a device for the East Asian monetary cooperation is established, transparency in both financial and physical markets will be augmented and in the process, so will be the stability of financial and physical transactions.     

Toward regional financial and monetary cooperation in East Asia1

The financial and economic crisis in 1997–98 came as a dramatic shock to East Asian economies, and has prompted to institutionalize a regional financial and monetary cooperation. This paper demonstrates the strong will of East Asian countries to develop the regional financial and monetary cooperation, outlines recent developments, and provides possible prospects for the future. It points out that the option to keep consistent with the IMF system actually weakens regional solidarity, and recommends an immediate establishment of a strong regional surveillance and peer pressure mechanism for the Chiang Mai Initiative (CMI) to evolve into a common pool of foreign exchange reserves, a sort of East Asian IMF. It also argues that East Asian countries should closely coordinate their exchange rate regime to maintain intra‐regional and extra‐regional exchange rate stability.     

Asia's contribution to global rebalancing

Developing Asia remains at the core of global payment imbalances. While the geographical concentration of current account imbalances is significant—with the People's Republic of China accounting for the lion's share of the region's current account surplus—how Asia contributes to global rebalancing also depends critically on the newly industrialising economies and larger Association of Southeast Asian Nations economies. Given the region's huge diversity, the necessary national macroeconomic and structural policies will vary significantly across Asia's emerging economies. Whereas near‐term rebalancing efforts will be driven primarily by macroeconomic and exchange rate policies, structural reforms are essential for boosting domestic and regional demand as sources of economic growth over medium to long‐term. We argue that regional rebalancing will depend critically on the adoption of deeper and more comprehensive structural reforms and further trade liberalisation to unlock the potential of strong domestic and regional spending—thus reducing Asia's high dependence on extra‐regional demand. Priority policies should include infrastructure spending, competition, trade, financial development, investment, immigration, and other social policies to reduce national savings.     

关于东亚区域货币合作问题的分析

1997年的亚洲金融危机给东亚各国的经济带来了沉重打击。此后,东亚各国纷纷认识到开展区域内货币金融合作的必要性,并以此来增强抵御风险、化解危机的能力。这次亚洲金融危机改变了东亚国家的政策取向,区域经济一体化步入制度性安排的快车道,这也为东亚区域货币合作创造了条件。另外,美元区与欧元区的相继建立和运行不仅证实了最优货币区理论在实践上的可行性,也增强了东亚各国在货币合作问题上取得成功的信心。本文将要对东亚区域货币合作问题做以探讨分析,从而说明东亚区域货币合作的必要性和可行性。     

Recession, inflation and the international monetary system

The difficult circumstances being faced by the world economy and its uncertain prospects for the 1980s make it necessary to take a new look at the present financial mechanisms and international institutions for monetary cooperation, with a view to adapting them to current needs and to developments in the near future. The industrial countries will have more modest rates of growth than in earlier decades, and this will have significant consequences for the developing countries: (a) stagnation of official development aid flows; (b) possible intensification of protectionist trends; (c) slow growth of producers of raw materials whose export markets will be seriously limited; (d) gradual shift of world economic and political activity toward oil-producing developing countries and, to a lesser extent, toward the exporters of manufacturers; (e) industrial countries and raw materials producers will become increasingly interdependent; (f) oil-producing and other higher income developing countries will increase their participation in regional economic cooperation and official development aid efforts. Some of the more specific problems which require attention from the international community are inflation and recession; structural disequilibria, recycling and external debt; adjustment process; creation of liquidity and transfer of resources; and participation of the developing countries in the monetary system.     

Asian trade: long‐term patterns and key policy issues

Fragmentation‐based specialisation has become an integral part of the economic landscape of East Asia. Dependence on this new form of international specialisation is proportionately larger in East Asia, in particular in the Association of Southeast Asian Nations, than in North America and Europe. In this regard, an important recent development has been the rapid integration of China into regional production networks. This development is a counterpoint to the popular belief that China's global integration would crowd out other countries' opportunities for international specialisation. The rise of product fragmentation has strengthened the case for a global, rather than a regional, approach to trade and investment policymaking. Given the global orientation of the region's economies, we question whether there would be a significant benefit from current efforts to promote regional cooperation, unless the principle of ‘open regionalism’ is recognised. With both the Doha Round and APEC floundering, this is one of the major multilateral policy challenges of our time.     

东亚货币合作的现状分析及中国的战略选择

经济全球化和区域经济一体化的世界经济趋势对东亚货币合作提出了迫切要求,东亚国家在金融领域暴露出的金融体系脆弱性要求加强东亚货币合作。鉴于亚洲地区政治经化的复杂性和差异性,整个亚洲的金融合作条件远未成熟,但东亚地区的经济往来密切,具备了一定的基础。本文对东亚货币合作的现状和未来可能的路径和前景进行分析,并对中国的参与提出建议。     

Bond Markets Initiation and Tax Revenue Mobilization in Developing Countries

We analyze the relationship between the introduction of a sovereign bond market (BM) and tax revenue mobilization behavior, using a large sample of 119 developing countries. Propensity Scores Matching estimations reveal that BM participation significantly fosters domestic tax revenue mobilization. Moreover, we find that this favorable effect is sensitive to BM countries' characteristics, namely the stance of monetary and fiscal policies, the exchange rate regime, the level of economic development, and the degree of financial openness and financial development. Finally, our results show that BM participation fosters internal taxes and reduces their instability, compared to international trade taxes. These findings highlight the strength of BM in promoting structural reforms in developing countries, through encouraging them to increase their tax effort and even by contributing to some extent to the fiscal transition process.     

东亚金融结构与法律制度演进及其对区域金融合作的含义

区域成员在法律制度和执法效率上的差异,将体现为金融结构的差异,这会导致共同货币政策在区域成员间的传导效果出现较大差异,影响货币联盟的稳定性。东亚各经济体的金融法律制度呈现较大的差异,相应地金融结构也有较大的差异。通过机制化的区域金融合作,采取最低协调一致标准,促进东亚各经济体法律制度和金融结构的渐进趋同,是未来东亚货币金融合作的基础。     

China's emergence and the reorganisation of trade flows in Asia

The emergence of China has intensified the international segmentation of production processes within Asia, but has not created an autonomous engine for the region's trade, as Asia still depends on outside markets for its final goods exports. The reorganisation of production has weakened the position of the advanced economies in Asia's trade, but up to now has not severely affected the position of the emerging Asian economies. However, the deterioration of China's terms of trade raises the question of the sustainability of its recent growth strategy.