China’s Foreign Trade: Achievements,Determinants and Future Policy Challenges

I. IntroductionOver the past twenty-five years, Chinas foreign trade has undergone unprecedenteddevelopment. The total trade value increased from US$36 billion in 1978 to over US$700billion in 2003. The proportion of manufactured goods in total exports rose from less than onehalf in the early period to 90 percent in 2003. Manufactured exports also saw a significantstructural change. Apart from traditional major export items such as textiles and light industrialgoods, machinery and transport…     

Dependence structures and risk spillover in China’s credit bond market: A copula and CoVaR approach

This study uses a dynamic copula model of dependence to investigate risk spillovers in China’s credit bond market between the bank and corporate sectors for a range of maturities from one week to 30 years. Using daily data on credit spreads for the period December 28, 2009 to June 2, 2017, the empirical results show that credit risk spillover is low and relatively stable for medium-term bonds, but higher and more variable for short- and long-term bonds. The results also show that credit risk spillover increased after 2014 with financial market reforms that involved interest rate liberalization and a loosening of government guarantees on corporate debt.     

Impact of liberalization of financial resources in China’s economic growth: evidence from provinces

By using the sources of investment and based on provincial data, this paper examines the efficiency performance of the four sources of total investment in fixed assets in China for the period 1985–1998: state budget appropriation, national bank loans, self-raised funds, and foreign investment. The result of the panel data study shows that the growth of provincial output is positively related to the growth of national bank loans and self-raised funds. State appropriation is still a significant source of investment in the interior provinces, though this suggests a lack of alternative of nonstate sources. The paper concludes that nonstate sources of funding are generally more efficient in promoting output growth.     

Race: China’s Question and Problem

Race poses a challenge to the ruling Communist Party of China. Contemporary news reports about China’s relationship with various African states warn of a reestablishment of 19th century colonial relations, with China standing in the shoes of England or France. When indictments of neo-colonialism are promoted, China recalls a historical brotherhood with African states under the banner of Third World solidarity. This paper attempts to shed light on both sides of this argument, demonstrating that for China, the issue of race in foreign relations poses both a question of motives and a problem of national identity.     

Analysis of China’s Foreign Trade Growth and Discussion of Related Policies

I. Analysis of Factors in the Growth of Import and Export TradeAccording to Customsstatistics,China’s import and export tradereached US$620.8 billionin 2002,growing by 21.8 percent, with imports growing by 21.2 percentand exports by 22.4 percent. Such growth reached as high as 37.1 percent in 2003, with the total volumereachingUS$851.2 billion,withimportsgrowingby39.9percentandexportsby 34.6percent.In the firstthree quartersof 2004, the total value of import and export tradehit US$828.5…     

China’s quest for energy through FDI: new empirical evidence

China’s current economic development depends heavily on its access to energy resources, and it is increasingly shaping Chinese Outward Foreign Direct Investment (OFDI) in a quest for resources located abroad. The aim of this paper is to answer the two following questions: How much did the Chinese global quest for energy drive its OFDI between 2005 and 2012? And has the quest for energy been sensitive to the geographical location of the resources? We used data on Chinese OFDI from the China Global Investment Tracker, as well as diverse host countries determinants of previously tested OFDI. We measured the impact of host country energy production in the allocation of investments. Using several multivariate regression models, we demonstrate that energy resources were the main driver of Chinese OFDI in 92 host countries during the studied period, and that there was no sensitivity to the geographical location of the resources.     

China＇s Changing Trade Elasticities

China ＇s sectoral trade composition, product quality mix, and the import content of processing exports have all changed substantially during the past decade. This has rendered trade elasticities estimated using aggregate data highly unstable, with more recent data pointing to significantly higher demand and price elasticities. Sectoral differences in these parameters are also very wide. All this suggests greater caution should be exercised when using historical data to simulate the response of China＇s economy to external shocks and exchange rate changes. Analyses based on models with estimated coefficients largely representative of China in the 1980s and 1990s are likely to turn out to be wrong, perhaps even dramatically.     

Fisher’s hypothesis,survey-based expectations and asymmetric adjustments: Empirical evidence from South Africa

Our study re-examines Fisher’s hypothesis for the South African economy in the post-inflation targeting era and presents two empirical novelties over preceding works for the same country. Firstly, we examine Fisher effect by making use of survey-based inflation expectations data for financial analysts, business sector, trade unions and households, hence making our study more disaggregate in nature. Secondly, we examine both short-run and long-run asymmetric cointegration effects in Fisher’s relation using the nonlinear autoregressive distributive lag (NARDL) model as an econometric framework. For the full quarterly sample of 2002:01 – 2019:04, our study finds interest rates respond more aggressively to falling expectations than rising ones, with a full Fisher effect found for financial analysts, partial effects for households and business, and no effect for trade unions. However, when the data is split into two sub-samples corresponding to pre- and post-financial crisis periods, we observe changing dynamics in which interest rates respond more aggressively to rising inflation, with partial effects being also found for trade unions. Policy recommendations based on our study are offered.

     

China＇s Foreign Trade and Investment： An Overview and Analysis

This study discusses the current development of China‘s trade and investment and their related issues. It presents data consistent with the hypothesis that Chinese firms try, to overcome market impediments, such as capital account inconvertibility and differential tax treatment between foreign and domestic firms, through trade and investment. Various challenges and opportunities related to China‘s future trade and investment are also discussed.     

China’s macroeconomy: main challenges and countermeasures*

At the turn of the twenty-first century, the Chinese economy has become a leader from a complete follower in some industries. Thus, without innovation, it will be difficult for China to keep improving its technology further in the twenty-first century. Under the situation that ‘cash is of paramount importance’, the expansionary monetary policy leads to an increasing liquidity. People, with more money at hand, are prone to invest in stocks rather than in industries because it could be harder to withdraw their money from long-term investments. This phenomenon leads to bubbles in stocks and real estates in China. Based on the current situations, Professor Wu advocates an inclusive tax cut policy, as one of the biggest problems many Chinese entrepreneurs face is a lack confidence in the future. The main function of the government is to provide public goods, not to manipulate the market, intervene in the micro economy or ‘adjust the structure’ directly.     

China’s Corporate Governance and Reforms

I. IntroductionSince 1978, China’s economic reforms have called for an incentive mechanism to beincorporated in the state-owned enterprises (SOEs), while the reforms have demonstratedconsiderable success. In the early 1990s, the Chinese government took further steps andbegan to list SOEs on stock exchanges to raise external capital and improve their efficiency.Corporate governance still remains an important issue in China as shown by the largenumber of corporate failures and scandals in r…     

Subnational institutional environment,scale competition and MNEs’ ownership levels in transition economy: evidence from China

Abstract

This paper shows that the effect of market scale competition on the ownership levels of foreign-funded enterprises is conditioned on sub-national institutional environment in China. Analysis is based on the idea that multinational enterprises subject to the dual pressures of institutional isomorphism and competition in the host country. The provincial panel data from 2001 to 2012 is used for empirical tests. This study indicates that the weaker the legal property rights protection and legal enforcement of contracts, and the higher the opening up, the more the large foreign-funded enterprises decrease their ownership levels, whereas the negative moderating effect incurred by the reduction to government intervention in business is limited significant.     

China’s new lost generation: the casualty of China’s economic transformation

China’s surge into global middle-income status over the space of three decades has been spectacular. However, a potentially large and burdensome cost has been imposed on a generation of adolescents and young adults who abandoned the countryside, and with it access to basic education, in order to seek the anticipated advantages of jobs in the country’s burgeoning urban-industrial sector. This large swath of off-farm migrants transformed China. It propelled China to the status of the ‘world’s factory’ and created the scale and accumulated learning-by-doing enabling China’s transition to a ‘knowledge economy’ that no longer depends on the labor of China’s new ‘Lost Generation.’ As the Lost Generation and its left-behind children, who suffer from a chronic lack of schooling, thicken the lower tail of China’s income distribution, it may be the rising, prosperous urban middle class that ultimately incurs the social, economic, and political challenges associated with China’s generation of off-farm migrant households once essential for launching China’s economic ascent.     

Effect of personality traits on smallholders’ land renting behavior: Theory and evidence from the North China Plain

This study investigates the effect of smallholders’ personality traits on their land rental market decisions. We develop a conceptual framework and show that these internal factors could affect smallholders’ land rental market participation beyond institutional and socio-demographic factors. Our empirical analysis is based on a survey of 2119 rural households collected in the North China Plain. We find that smallholders with a higher level of openness are more active in participating in the farmland rental market. Moreover, internal locus of control plays a significant role in explaining smallholders’ land renting behavior. We further show that need for achievement mediates the link between internal locus of control and smallholder’s intention to rent land, indicating that fostering a higher level of internal locus of control—and subsequently achievement desire—could play an important role in promoting smallholders’ land-renting behavior. More generally, our results imply that taking rural smallholders’ personality traits into account in designing land rental policies may increase the effectiveness of policies aimed at promoting land rental market participation among smallholders and incubating crop farm scale enlargement in rural China.     

Renminbi internationalisation and China’s financial development

There is a widespread view that China’s currency can be used in international markets only after the liberalisation of China’s domestic financial markets and the opening of its capital account. Yet evidently the renminbi’s internationalisation is preceding these so-called preconditions. This article assesses the tensions inherent in renminbi internationalisation starting at a transitional period in China’s financial development. For now, effective capital controls allow the Chinese authorities to retain regulated deposit and lending rates, quantitative credit guidance and bond market rationing. Relaxation of the capital controls would put these policies at risk. Reserve requirements can be extended to bank inflows from the offshore market but only at a price.     

Globalisation,multinationals and productivity in Japan’s lost decade

This paper studies the process of plant exit and productivity growth in Japan during the ‘lost decade’. A productivity decomposition shows the low rate of productivity growth at the aggregate level to be due to slow within plant productivity growth and a small contribution from the entry and exit components. We find the causes of plant exit to be similar to results in other country contexts except we find no effect from import competition. Our results suggest that the low productivity growth is attributable to high entry barriers and little to the shutting of productive plants by MNEs.     

Are China‘s Trade Policies Effective？

I. IntroductionSince economic reform and an opening-up in 1978, the Chinese government has decentralized its state-owned enterprises (SOEs) system in the centrally planned economy. The separation of government administration and enterprise management is moving China toward a market-oriented economy, forcing Chinese enterprises to become more competitive and more efficient. Market forces of supply and demand are intended to govern firms' industrial production, which is no longer subject to government planning and control.     

What can be learned from China’s success?

Since 1978, China has experienced the most rapid economic growth of any country in world history, and the most rapid growth in living standards of any major economy. Following the latest international financial crisis, China outperformed any other major economy – from the second quarter of 2007 to the second quarter of 2014, China’s economy grew by 78% and the USA by 8%. In a single generation, China has gone from a ‘low income economy’ to the verge of achieving ‘high income’ status by World Bank criteria. Achieving this would double the population living in ‘high income’ economies globally. This extremely rapid development is sometimes explained in terms of unique ‘Chinese characteristics’, but research over the last 30 years suggests it is rooted in universal economic processes. While the combination of global forces producing economic growth is unique in China and produces unique ‘Chinese characteristics’, they can operate throughout the world economy. If other developing economies could achieve the scale of China’s economic success, global problems of poverty and its consequences would be solved. China’s policy response to the international financial crisis was far more effective than that of other major economies. This paper examines the chief strategic lessons to be drawn from China’s success.