The role of infrastructure in China’s regional economic growth

This study investigates the relationship between infrastructure capital and China's regional economic growth for the period 1990–2013. Four types of infrastructure are considered: electricity generating capacity, roadway, railway, and telecommunications. Using a vector error correction model, we find mixed support across time period and region for the contribution of infrastructure investment to economic development. With regard to road construction in lagging regions in particular, the impact appears to have become negative under a program of ramped up efforts. The results resonate with the theoretical literature on the inverse U-shaped relationship between infrastructure investment and growth which posits a “crowding-out effect” of private capital when infrastructure investment becomes too dominant.     

The Chinese Phillips curve – inflation dynamics in the presence of structural change

This paper models inflation dynamics in China from 1987 to 2014 using a Phillips curve framework. The Phillips curve is generally estimated under the assumption of linearity and parameter constancy. The existence of structural breaks in China’s inflation dynamics make standard linear models inappropriate tools for analysis however. Our results find that the Chinese Phillips curve is characterised by a non-linear relationship. The inflation/output relationship takes the form of a concave curve. This suggests that changes in the level of output effect inflation in China more strongly in periods when output is operating below its potential but the relationship is weaker when output is operating at or above potential. Based on these findings, the People’s Bank of China (PBC) could consider output cost and policy response on a case-by-case basis depending on the level of output in relation to potential.     

Job satisfaction and relative income in economic transition: Status or signal?: The case of urban China

We use two datasets for urban China to examine whether an increase in reference group income lowers or increases job satisfaction. The former is consistent with a status effect — an increase in the income of others lowers my satisfaction because I feel jealous. The latter is consistent with a signal effect — an increase in the income of others might make me jealous, but it also provides an information signal about my future prospects. When we use a single item indicator of job satisfaction we find no support for a status or signal effect; however, when we use a psychometrically valid instrument to measure job satisfaction, we find some support for the existence of a status effect. We consider the components of job satisfaction through which the status effect operates. We find that the status effect operates through satisfaction with co-workers, operating procedures, pay and supervision.     

China and India’s economic relations with African Countries – neo-colonialism eastern style?

A significant feature of globalisation is the advent of Chinese and Indian firms as overseas investors. Investments by these two countries though not large in volume have grown apace and given a new lease of life to writings on foreign direct investment. Most of these studies including the statistical studies on the determinants of these investments replicate the conclusions of studies on foreign investment in general. Although not large in volume investments of Chinese and Indian firms in natural resource extraction industries, including oil in African countries, have reignited the controversies on the contribution of foreign investment to development. This paper reviews the contribution of these studies and argues that a fresh perspective is required to analyse both the determinants and impact of foreign investment by China and India on the host economies. Their contribution to the development of the African countries may be much more substantial than that of investments by the developed countries mostly because of their experience and awareness of development issues.     

From financial repression to financial crisis? The case of China

This study explores the connections between financial repression policies and the possibility of financial crisis, a relationship that has been overlooked in previous literature. We focus on China, a country with one of the highest levels of financial repression in the world. China's case shows that when financial repression is maintained at a modest level, as the government did before 2008, the possibility of a financial crisis is low; however, when financial repression policies are pushed to an excessive level, as the government did after 2008, the national asset‐liability structure may be damaged to such an extent that a financial crisis becomes likely. The key to understanding the changing role of China's financial repression policies lies in the survival strategy of the Chinese party‐state, which regards finance as a powerful weapon and is eager to use it to address certain economic, political, or social problems that may endanger its rule.     

Structural change,industrial upgrading and China’s economic transformation*

Abstract

After more than three decades of opening up and reforms, China has moved from a low to an emerging middle-income country. The main challenge facing the country is how to sustain this momentum and develop into a high-income country and avoid the middle-income trap. In order to achieve this, industrial upgrading and structural change is crucial. This is not an easy process given that very few countries in the world achieved this in the past 50 years. What are the challenges for this transformation? How can the innovation and technological capabilities be developed to upgrade Chinese industries into one of the world’s innovation leaders? These are important questions to address for policy-makers and academics, and are the main theme of an International Conference on Transition and Economic Development (TED), held at Fudan University in 2015.     

The economic consequences of China–Africa relations: debunking myths in the debate

This study dissects with great acuteness some of the big questions on China–Africa relations in order to debunk burgeoning myths surrounding the nexus. It reviews a wealth of recent literature and presents the debate in three schools of thought. No substantial empirical evidence is found to back up sinister prophesies of coming catastrophe from critics of the direction of China–Africa relations. In the mean, the relationship from an economic standpoint is promising and encouraging but more needs to be done regarding multilateral relations, improvement of institutions, and sustainability of resources management. A number of positive signs suggest that China is heading toward the direction which would provide openings for a multipolar dialog. While benefiting in the short run, African governments have the capacity to tailor this relationship and address some socio-economic matters arising that may negatively affect the nexus in the long term. Policy implications are discussed.     

The changing texture of the city-size wage differential in Chinese cities – Effects of skill and identity

This study examines the city-size wage premium (CSWP) for local urban hukou holders (citizens) and rural migrants by utilizing data from the Chinese Household Income Project surveys (CHIP 2002 and 2013) employing OLS and Propensity Score Matching method. Heterogeneity of skills (measured by level of education) is found to be one determinant of the city-size wage disparity. But irrespective of skills, citizens receive a higher city-size premium than the rural migrants; nevertheless, the premium received by rural migrants has increased over the past few years. Within the similar occupation and type of firm, a highly skilled citizen received a CSWP of Yuan 880.08 in 2013 (Yuan 347.48 in 2002) on average per month. Whereas, a highly skilled rural migrant received an average monthly premium of Yuan 601.71 in 2013, and an insignificant premium in 2002. The corresponding values for low skilled citizens and rural migrants in 2013 are Yuan 415.67 and 267.27 respectively. Our results establish that there has been a positive effect on rural migrants from the relaxation of policies and labour laws, and a move towards equalization within the same level of skills.     

The theory of the characteristic agriculture＇s development

The development of characteristic agriculture is the important way to adjust the agricultural structure and increase the farmer＇s income, and improve agricultural competitiveness. Scientific understanding of the basic characteristic agricultural content and features and grasping its basic ideas of development is the fundamentality to guide the economic development of agriculture. Based on the research of other scholars as a reference to agricultural development and based on the actual in Henan characteristic agriculture, we attempt to summarize the feature of the theory of agricultural development which can provide reference for the practices of characteristic agriculture.     

A case study in German economic imperialism: The colonial economic committee, 1896–1914

Abstract

The most thorough attempt so far made to estimate the population of Finland in the 17th century is that by the Swedish military historian, Major S. Sundquist. The purpose of his investigation was to discover the basis of enlistment in the army of the kingdom of Sweden under Gustavus II Adolphus. Sundquist obtained the number of farmsteads from the Crown terriers of the first decade of the 17th century and from lists drawn up in connexion with a levy raised to buy back the castle of Elfsborg lost to Denmark in the war of 1611–1613. His next step was to assess the average size of households. In source materials from the sheriffdoms (fögderier) of Porvoo (Borgå) and Kymi (Kymmene) an assessment term, näbb, was found. Sundquist interpreted this term as indicating the number of married couples living in a farm household in addition to the farmer and his wife. In the two sheriffdoms mentioned, the number of such additional couples was 1.14 per farmstead. Sundquist changed this ratio into the round figure of one which he applied to the whole country, thus assuming a national average of two married couples per farm. Assuming, furthermore, that the population structure was the same in the 17th century as in the late 18th and early 19th centuries, when the earliest official population statistics were drawn up, he assumed for each married couple the same number of widows and widowers, unmarried adults and children as appeared in these statistics. In this way he arrived at a ‘probable minimum’ of 350,000 persons; he also calculated a ‘proved minimum’ of 219,000 by assuming that the average number of married couples per farmstead was 2.14 in the sheriffdorns of Porvoo and Kymi but only 1.0 in the rest of Finland. ¹ S. Sundquist, Finlands folkmängd och bebyggelse i början av 1600-talet [Finland's population and colonization at the beginning of the 17th century], Meddelanden Iran generalstabens krigshistoriska avdelning II, Stockholm.      

Why did Swedish regional net migration rates fall in the 1970s? The role of policy changes versus structural change, 1945–1985

The relationship between local labour market conditions and regional migration has been widely discussed within research. In Sweden, where interregional migration reached a peak in the 1960s but decreased substantially in the 1970s, the role of economic policy has been especially contended in light of the Swedish model and its official stress on regional mobility. By collecting and creating a new and unique dataset on net-migration, vacancy rates, employment and labour income by county, the pattern of interregional migration in Sweden is analysed over a period of time that also covers the early postwar period (1945–1985), allowing for a detailed evaluation of the drivers of migration at different times. My results suggest that there was no significant change over time in the responsiveness of migration to local labour market conditions. The changing patterns of regional migration were therefore more likely the result of changes in the pace and direction of structural change. I discuss the implications of these results for previous accounts of the Swedish model and of the decline in migration after 1970.     

Lessons from the global financial crisis – the case of Mainland China and Hong Kong

Abstract

The analysis of the intertwined reactions of Hong Kong and Mainland China to the 2008 Global Financial Crisis is considered in this study through the lenses of their stock markets. The GARCH-based analysis of stock market performance over the period December 2011–December 2014 shows that trade and equity sectors were the sectors most affected by the global recession; volatility was prevalent on the Shanghai stock market, whereas volatility persistence characterised the Hong Kong stock market. The results also show that the two stock markets recovered quite quickly. Tight controls applied by the financial authorities helped ensure some stability during the crisis.     

The changing relationship between inflation and the economic cycle in Italy: 1861–2012

The article investigates the relationship between GDP and prices in Italy in the long-run, from the country's Unification (1861) up to present day. By using the new national accounts data, over the period 1861–2012, we were able to make Italy the third country to have a historical test of the hybrid Phillips curve (in which both the new Keynesian and the backward-looking Phillips curves are tested), together with the UK and the US. How do economic growth and prices interact in Italy's different stages of economic growth? Unlike the US and the UK, where said interaction was already operating in mid-19th century, in Italy the link between inflation and the economic cycle emerged only after the First World War. We argue that this can be explained owing to Italy's different position in the international economic system and the way foreign conditioning factors (the exchange-rate regime and innovation in transportation) influenced the Italian industrialization. Before the First World War, deflation was imported. This turned out to be compatible with some GDP growth, insofar as the deflationist macroeconomic setting favoured capital inflows and technological upgrading. Whereas, from the First World War until the creation of a common European currency, price variations were mainly a consequence of national policies and domestic conditions: the trade-off with the GDP cycle is now manifest, both in the periods of deflation (the interwar years) and in those of inflation (the second half of the twentieth century). Our findings may also have important implications for present day, since price movements are once again, as in the liberal age, largely imported.     

The Post‐Mao economic reform in China: A Korean view

Abstract

Previous studies that were concerned with the impact of depreciation of the ringgit on the Malaysian trade balance employed data either between Malaysia and rest of the world or between Malaysia and each of her major trading partners. Specifically, the bilateral trade balance between Malaysia and the US is shown to be insensitive to the real bilateral ringgit–dollar rate. In this article we wonder if disaggregating trade flows between Malaysia and the US by commodity could help us to discover any significant effects that the real exchange rate could have. We consider 101 industries that export from US to Malaysia and 17 industries that import from Malaysia. While majority of the industries showed short-run sensitivity to the real bilateral exchange rate, short-run effects lasted into the long run almost in half of the industries in both group.     

The visible hand: the role of government in China’s long-awaited industrial revolution

China is undergoing its long-awaited industrial revolution. There is no shortage of commentary and opinion on this dramatic period, but few have attempted to provide a coherent, in-depth, political-economic framework that explains the fundamental mechanisms behind China’s rapid industrialization. This article reviews the Embryonic Economic Development theory put forth by Wen (2016a). This article reviews the Embryonic Economic Development theory put forth by Wen . It illuminates the critical sequence of developmental stages since the reforms enacted by Deng Xiaoping in 1978: namely, small-scale commercialized agricultural production, proto-industrialization in the countryside, a formal industrial revolution based on mass production of labor-intensive light consumer goods, a sustainable ‘industrial trinity’ boom in energy/motive power/infrastructure, and a second industrial revolution involving the mass production of heavy industrial goods. This developmental sequence follows essentially the same pattern as Great Britain’s Industrial Revolution, despite sharp differences in political and institutional conditions. One of the key conclusions exemplified by China’s economic rise is that the extent of industrialization is limited by the extent of the market. One of the key strategies behind the creation and nurturing of a continually growing market in China is based on this premise: The free market is a public good that is very costly for nations to create and support. Market creation requires a powerful ‘mercantilist’ state and the correct sequence of developmental stages; China has been successfully accomplishing its industrialization through these stages, backed by measured, targeted reforms and direct participation from its central and local governments.     

Does health insurance decrease health expenditure risk in developing countries? The case of China

This article studies the impact of health insurance on individual out‐of‐pocket health expenditures in China. Using China Health and Nutrition Survey data between 1991 and 2006, we apply two‐part and sample selection models to address issues caused by censored data and selection on unobservables. We find that, although the probability of accessing health care increases with the availability of health insurance, the level of out‐of‐pocket health expenditure decreases. Our results from a selection model with instrumental variables suggest that having health insurance reduces the expected out‐of‐pocket health expenditure of an individual by 29.42% unconditionally. Meanwhile, conditional on being subjected to positive health expenditure, health insurance helps reduce out‐of‐pocket spending by 44.38%. This beneficial effect of health insurance weakens over time, which may be attributable to increases in the coinsurance rates of health insurances in China.     

Understanding the investment of renewable energy firms in the face of economic policy uncertainty – Micro-evidence from listed companies in China

With the development of renewable energy, the current support for China's renewable energy industry has gradually shifted from “helping its development and expansion” to “helping it resists systemic risks and strengthens market competition”. Therefore, there is an urgent need to study how the strategic investment of renewable energy companies is affected by economic policy uncertainty. This paper first robustly explores the non-linear relationship between strategic investment and economic policy uncertainty of Chinese renewable energy enterprises. Then from the three perspectives of the relationship between the government and renewable energy enterprises, the characteristics of renewable energy enterprises, the response of the product market and financial market to renewable energy, this paper innovatively explores how different dimensions will adjust the non-linear relationship between strategic investment of renewable energy enterprises and economic policy uncertainty. The analysis in this paper closely relies on the characteristics of the renewable energy industry at this stage, so our conclusion can provide a reference for the government to formulate the development plan of renewable energy enterprises scientifically and prudently.