Corporate innovation in China and its implications

China's current economic transition policies focus on shifting from export‐driven manufacturing towards high‐end, high‐tech research and development (R&D), and domestic consumption. Since the early 2000s the government has issued a series of policies and guidelines to encourage innovation. Both in‐house R&D investment and the number of patent grants/applications have seen considerable growth in recent years. More specifically, industry‐funded R&D was responsible for more than three quarters of total in‐house R&D investment. Despite the rapid growth in R&D expenditure and the number of patents, China's corporate innovation still faces many obstacles and challenges. To further stimulate corporate innovation, the government may need to create an environment of fair competition for domestic enterprises, encourage the growth of institutional investors and their active participation in corporate governance, and improve the efficiency of financial systems. The experience of China in promoting innovation provides policy approaches and implications from which other emerging economies can learn.     

Does Chinese Environmental Policy Affect Income Inequality? Evidence from the Central Environmental Protection Inspection

This paper investigates the effect of environmental policy on income inequality. It focuses on the central environmental protection inspection led by the central government in China. Using a difference-in-differences approach, it finds evidence that environmental regulation decreased the per capita income and enlarged the gap between urban and rural income while showing an insignificant effect on employment. Although the policy can reduce pollution levels and bring environmental benefits in aggregate, the findings of this study suggest that the regulations appear to have reduced the proportion of manufacturing industry and hindered general innovation and investment from entrepreneurs, which resulted in greater inequality. Rural residents suffered more from environmental regulation due to relatively high migration costs and their disadvantaged human resources on the aspects of health, education level, and skills. The local government's execution incentive can also play a key role in the effectiveness of environmental policy. Regions with lower GDP growth targets and younger government leaders were affected significantly with regard to the income growth of local residents and the urban–rural income gap.     

Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania*

Abstract: This paper analyzes characteristics of nonfarm enterprises, their employment growth patterns, and constraints in doing business in rural Tanzania. Using unique survey data, we describe a low‐return sector struggling to compete in a challenging business environment. However, about one‐third of rural enterprises are growing fast. Most enterprises engage in agricultural trade. Due to a rapidly growing agricultural sector in recent years, limiting demand‐side constraints, rural enterprise constraints in Tanzania mainly operate from the supply‐side, suggesting that in particular access to finance, road infrastructure and rural cell phone communication is associated with employment growth. A major finding is that subjective and objective measurements of business constraints are broadly comparable. We discuss a number of factors that would help to unleash the full potential of private sector‐led growth in rural areas. Marginal improvements of the rural investment climate matter for growth.     

Botox and bridges: South African exports of health and construction services

Until relatively recently, policy makers and academics directed little attention to trade in services. This has changed in recognition of the increasing role of services in economic growth, trade and investment. In World Trade Organisation (WTO) and other trade negotiations, discussions on services have become as important a. s., if not more important than, those on trade in goods. Despite the growing contribution of services to exports and economic development, trade in services remains highly regulated, especially in developing countries. This article outlines the main methodological and policy challenges facing developing countries, such as South Africa, in trying to understand the economic implications of service liberalisation. This is achieved largely by means of two case studies of the construction and health services sectors. While the findings are preliminary and the policy conclusions speculative, the article provides some examples of the key analytical difficulties that arise in services analysis. More importantly, it highlights the need for the government to develop integrated service sector strategies that recognise the contribution of trade to development policy and the impact of domestic regulations on trade.     

International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms

A current concern for China's long‐term growth prospect is whether China can become an innovative economy and achieve industrial upgrading to compensate for the gradually declining competitiveness resulting from low‐cost labor. The present study examines this issue by exploring how trade participation impacts on the R&D investment of manufacturing firms through various channels. Merging China's Annual Manufacturing Survey Dataset and the Chinese Customs Dataset allows us to study such a relationship at the individual firm level. The empirical results suggest that channels such as geographical diversification of export markets, share of imports from high‐income countries, average unit value of imports, number of intermediate goods and capital goods imports, and the trade regime are significant factors that influence firm‐level R&D investment. The study discusses the policy implications of the empirical findings in relation to industrial and trade policies that may be potentially beneficial for China's transition towards an innovative economy.     

试论新型城镇化下的农地金融发展

推进我国新型城镇化不断发展,离不开金融的大力支持。党的十八届三中全会《中共中央关于全面深化改革若干重大问题的决定》进一步强化了农民对土地的使用权和承包权,赋予了农村土地的金融属性。探索农地金融的发展路径,并以此为基础,拓宽传统农村金融服务项目,既可以实现农村金融的飞跃发展,又抓住了金融支持新型城镇化发展的切入点。文章主要是从法制约束、农地流转、农地估价、农业保险和农村社保五个方面探讨了当前发展农地金融的障碍及政策突破。     

China's Overinvestment and International Trade Conflicts

For a long time, China's impressive growth performance has been driven by investment and high productivity gains. Based on a discussion of possible overcapacities and overinvestment in China, this paper investigates the sustainability of China's investment and export‐driven growth model. Since the turn of the millennium, buoyant capital inflows and low interest rates have been at the root of overinvestment and misallocation of capital, which necessitated export subsidies to clear markets. The overinvestment boom is argued to have ended around 2014. Since then, the overcapacities have weakened China's bargaining position in the US–Chinese trade conflict and have tempted Chinese authorities to postpone the restructuring of the Chinese economy by providing low‐interest credit. The gradual reemergence of quasi‐soft budget constraints is seen to undermine China's long‐term growth potential.     

Anti-dumping Policies and International Portfolio Allocation: The View from the Global Funds

Anti-dumping policies, as one of the most important nontariff measures to protect a country's economic interests, can have an impact not only on a country's trade and social welfare, but also on capital flows. Anti-dumping measures can result in increased trade costs and alterations to exchange rate risk. This study investigates the impact of anti-dumping sanctions on the international portfolio allocations of global funds. Antidumping policies can decrease the proportion of a fund's investment portfolio allocated to recently-sanctioned countries. Closer trade ties between the sanctioned country and the country where a fund is domiciled exacerbate the divestiture, but stronger foreign direct investment links weaken the negative association. Some country and fund heterogeneities are also discussed. We find that more developed countries are less affected by the impact of anti-dumping measures on equity fund allocations; liberalization of the economy and stable government could also mitigate the negative impact of anti-dumping sanctions. High-risk funds, such as growth funds or funds that invest in leveraged buyouts, showed the greatest response to changes in anti-dumping regulations.     

Business start-up regulations and the complementarity between foreign and domestic investment

This paper shows that the complementarity between foreign direct investment (FDI) and domestic investment significantly depends on regulations required to start a new domestically owned business in host economies. It finds evidence that FDI crowds out domestic investment in countries with entry regulation cost above a certain level, and many of these countries are in the bottom quartile of GDP per capita. Reforms in business start-up regulations can therefore play a critical role in enhancing the complementarity between foreign and domestic investment and thereby increase entrepreneurship and economic growth in low-income countries. The analysis takes into account other significant factors which affect domestic investment such as the cost of capital, government’s economic growth track record, institutional quality, and market size.     

The Impact of Farmland Transfers on Agricultural Investment in China: A Perspective of Transaction Cost Economics

There is growing concern that farmland transfers lead to less agricultural investment, which may adversely affect agricultural productivity growth in China. Prior research has primarily focused on the differences between owned cultivated land and rented plots, but little is known about how farmland transfers between relatives, which are popular in rural China, specifically affect agricultural investment. In this paper, we present a conceptual framework of transaction cost economics to compare different contracting strategies in China's farmland rental markets. As farmland rental markets in China are immature, land transfer between relatives establishes bilateral governance, which has the advantage of addressing the opportunistic activities of both parties and can ultimately increase investment by tenants. Based on data from two waves of household surveys, we empirically examine the impact of bilateral governance on the application of organic fertilizer, an indicator for agricultural investment. Our findings show that apart from economic factors, kinship is important to the functioning of farmland rental markets in rural areas.     

Indonesia'S Rapid Economic Growth: 1968–81

The paper provides some estimates of the sources of Indonesia's rapid growth in the period 1968–81. This rapid growth was partly due to the improvement in the terms of trade, especially because the improvement in the financial position of government raised the investment rate. But part of it was also due to a high rate of technical progress, especially in agriculture, and to the expansionary domestic fiscal policy of government.     

关于养老保险个人账户资金投资营运的几点思考

养老保险个人账户资金的入市投资已成定局，但在投资过程中需要综合考虑法律法规、宏观经济、财政金融、社会政策等诸多领域问题。其中，尤以政府与市场、中央政府与地方政府责任的划分，国际国内有益经验的适当借鉴，资本市场、法律法规及监管体系的进一步建立和完善等问题为重，这样才能实现个人账户资金入市投资的成功。     

Survey of Recent Developments

Amid global economic uncertainty and tumbling world oil prices, Indonesia's economy faces pressure on its external balance and a continued growth slowdown. The government of President Joko Widodo (widely known as Jokowi) has set an agenda of reform, including simpler, faster investment licensing, historic cuts to fuel subsidies to generate fiscal savings, and increased spending on infrastructure. On the political side, Jokowi has had to deal with several political issues coming not only from parties in opposition but also from parties supporting his government, including during the formation of the new cabinet. We examine the consequences so far of the government's policy initiatives and of the policymaking process. While some initiatives have been implemented with success, some seem to have been launched without enough preparation, consultation, or empirical evidence, and many have been poorly communicated. Although inflation accelerated after the November fuel-price rise, efforts have been made to contain inflationary expectations and to mitigate the effects on poverty through social-assistance programs. The government took steps to cushion the impending impacts of higher fuel prices on vulnerable households by giving cash handouts of Rp 200,000 per month to 15.5 million disadvantaged families who receive the lowest level of welfare, and by promoting publicly funded education and health care. The partial removal of gasoline subsidies and the introduction of a fixed-subsidy policy for diesel in the revised 2015 budget reduce uncertainty about the fiscal position, although increases in government spending in infrastructure development were announced at the same time. The revised budget for 2015 increases spending on infrastructure development by 63% from the 2014 budget, mostly on projects to improve connectivity on land and at sea—such as the development of toll roads, railways, and ports—and to increase the performance of the agricultural sector. However, the recent drop in international oil prices forced the government to increase its target for tax revenue by 30% on last year's target, raising concerns about the effect of falling oil prices on the economy. Trade and investment policy reform is important in unlocking Indonesia's growth potential and improving the country's current external balance. Jokowi's administration, however, has been sending mixed signals about its position towards more open policies. The country has yet to recommence several trade negotiations that were postponed in 2014 and is still struggling to meet its commitments under the ASEAN Economic Community. Although improvement in investment procedures and licensing is currently underway, Indonesia needs to adopt a more positive attitude if it is to attract more investment.     

Development Trajectories in the Biotechnology Industry： China versus Leading Countries

The present paper examines China's biotechnology industry from a global perspective and explores how its development trajectory differs from that of countries that are leaders in biotechnology. We draw on diverse data to demonstrate the unique development trajectory of the industry in China. China has benefited through targeted spin‐offs of R&D‐oriented foreign direct investment from developed countries driven by the effects of globalization, government‐encouraged collaboration between the domestic academia and industry, and the input of overseas returnees. Together with an increasing focus of the government and domestic enterprises on independent innovation, such developments have enabled China to catch up with the global biotechnology industry. However, its small scale and low capacity for commercializing innovations under China's current regulations and other barriers pose challenges for the development of the industry. Suggestions for the sustainable development of China's biotechnology industry are presented in this study.     

The pastoral boom,the rural land market,and long swings in New Zealand economic growth, 1873–19391

Higher farm and manufacturing productivity associated with refrigerated exports led to New Zealand's attainment of the world's highest Human Development Index in 1913. Local responses to export opportunities increased the social depth of land ownership and fostered intensive growth. Closer settlement meant that land‐related income gains spread widely, but land market volatility also created instability. New Zealand had the world's highest GDP per capita in 1938, but it experienced long swings in its growth rates. Dramatic swings in rural land market activity engendered by the pastoral boom contributed greatly to a long depression in the 1920s; subsequently a new monetary regime facilitated fast recovery.     

土地制度改革:中国有效应对全社会住房需求的重要保证

中央政府近年来大力推进保障性住房体系建设。本文讨论了目前中国大规模保障性住房建设所取得的进展,并分析了过快推进保障性住房所可能存在的经济可持续性、融资渠道、地方政府激励与分配公平等诸多需要解决的问题。住房保障与保障性住房是两个有关联、但不完全一致的概念,通过土地和财政配套体制改革,中国完全可以以市场化的方式解决绝大部分新增城市化人口的居住问题,并同时实现地方财政从预算外土地财政向以财产税、土地增值税为主体的预算内财政转型,实现户籍制度改革有效突破,为经济带来新的增长点。这些改革将大大降低政府直接建设保障性住房的财政与管理压力,而配合以合适的金融体制改革实现保障性住房融资机制的突破,完全可以有效应对全社会住房需求的重大挑战。     

我国财税政策支持农村金融的制度缺陷

目前我国初步建立了农村金融的财税支持体系,但现行财税支持政策与金融税制结构和财政管理体制不对称,与农村金融体系和新农村建设不相适应,也与我国农村金融面临的主要约束不相符合,上述制度缺陷影响了农村金融的财税支持政策效果。本文针对上述制度缺陷从明确政府职能定位、优化财税扶持政策、建立多层次的农业信贷风险分担体系、提高财政支持政策的规范性和层次性四个方面提出了相应的政策建议。     

Impact of land tenure policy on agricultural investments in China: Evidence from a panel data study

The goal of this paper is to examine the impact of changes in China's rural land policy on agricultural investments. Dramatic changes occurred in China's rural land policies after 2000, including the extension of rural land contractual period, restriction of land reallocation among villages and villagers groups, elimination of agricultural taxes for responsibility land, and rapid development of rural land rental markets. These changes have given farmers more secure tenure on collectively controlled responsibility land and have strengthened farmers' income rights for responsibility lands, incentivizing them to increase their investments on responsibility lands. A panel data method was used to quantitatively investigate the impact of land policy changes on agricultural investment. We considered the application of organic fertilizer as an indicator for long-term agricultural investment, and compared the use of organic fertilizer between private plots and responsibility lands operated by the same household. The results showed that the difference in organic fertilizer use between private plots and responsibility land for the same household has become smaller from 2000 to 2008. Our findings suggest that recent changes in rural land policies have provided farmers incentives to increase land quality investment on their responsibility lands.     

How will China shape the world economy?

We will provide an outlook for China's role in the world economy over the coming decades, an exercise which would not be possible without an analysis of the prospects for China's continued economic growth. Based on international and historical comparisons, we argue that today's China meets all three key conditions for continued economic growth, including a stable government that is supportive of a market economy; high and increasing quality of human capital, and openness to developed economies. Dependent on China's continued growth, we explore how China will impact many other economies through trade and investment, creating winners and losers in the world economy. Moreover, we argue that China will become a more active player in changing global economic governance not only through participating in reforms of existing institutions but also by leading efforts to establish new ones.     

Narrowing the development divide in ASEAN: the role of policy

Association of Southeast Asian Nations (ASEAN) is divided. Most striking is the development divide that separates the newer members (the Cambodia, Lao People's Democratic Republic, Myanmar, and Vietnam countries) from the original ones (ASEAN‐6). More rapid growth in the CLV since the 1990s, driven by trade, investment, and other market reforms, has reduced these income differences. While the development divide has narrowed, huge gaps remain. Further narrowing of these gaps will require an increase in the speed and the breadth of policy reforms. A gaping hole in the policy landscape in ASEAN is the failure to address labour mobility adequately. Ongoing demographic transitions will result in greater labour outflow. The current policy void on labour migration not only limits the benefits from trade and investment liberalisation but also increases the cost of structural adjustment. Although rapid growth has resulted in convergence between countries, it has increased polarisation within countries. This can threaten social cohesion, as well as the sustainability of future growth. In order to make growth more inclusive, there is a need to invest more in education and health and to institute land reform. Apart from directly reducing social and asset inequities, such policies will produce a workforce more able to participate in the growth process and adapt to structural change.