Population Aging and Housing Consumption： A Nonlinear Relationship in China

Mass migration of rural workers to cities will inevitably increase urban housing demand. However, the scale of vacant urban housing will increase in future as a result of the population aging and the rising number of empty nesters. Therefore, demographic transition may not only increase housing demand, but also increase housing supply. Using an overlapping generations model, the present paper investigates＇ the impact of demographic transition on housing consumption. We find that there is a nonlinear relationship between the elderly dependency ratio and housing consumption in China. With the deepening of population aging, housing consumption will increase; when the elderly dependency ratio reaches a turning point, housing consumption will decrease. The turning point of the nonlinear curve also depends on population mobility. A greater degree of population mobility will result in a delayed turning point. Furthermore, the turning point of the nonlinear curve will emerge when China＇s elderly dependency ratio reaches a value of 32 percent in 2025. This means that over the next decade, China should continue to increase the level of housing supply,     

Guanxi Networks in China： Its Importance and Future Trends

I. Introduction Guanxi is a Chinese word which is also recognized in Japan and Korea. In Chinese, Guan means a door, or “to close up” with those who are inside a group, and Xi can be interpreted to mean a joined chain. Thus, together, Guanxi can be translated as relationships and connections. In all the Chinese dominated societies in Asia, people use the word Guanxi to speak of someone who knows lots of people, who is well connected, and gets things done, not necessarily through formal …     

Real Exchange Rate in China：A Long-run Perspective

This paper investigates the RMB exchange rate from a long‐run viewpoint. Whether China's rapid economic growth brought about real exchange rate appreciation between 1975 and 2002 is empirically examined, based on a supply‐side model, the Balassa—Semuelson Hypothesis (BSH). The same test is conducted on Japan, Hong Kong, Korea, Malaysia, Singapore, Thailand, the Philippines, Indonesia and India. Our result indicates that the BSH only exists where the industrial structure has been upgraded and the economy has been successfully transformed from an agricultural economy to a manufacturing economy. Interestingly, China, among those where the BSH does not present, appears to be upgrading its industrial and trade structure. We then try to answer the question of why past rapid growth has no significant relationship with the RMB real exchange rate and what factors are underlying the trend of the RMB real exchange rate. We expect an appreciating trend of RMB real exchange rate in the foreseeable future, presuming that China's industrial upgrading process continues and the factors pertaining to the BSH's prediction, such as rise of wage rates in both tradables and nontradables, become more significant. (Edited by Xiaoming Feng)     

The Sino-British Economic and Trade Relationship： Achievements, Problems and Prospects

I.TheDevelopmentofEconomicandTradeRelationsbetweenChinaandtheU.K.ShortlyafterthefoundingofthePeoplesRepublicofChinain1949,inordertopreserveitseconomicinterestsinChina,includingHongKong,andinthewholeareaofSoutheastAsia,theUnitedKingdominJanuary1950tooktheleadamongtheWesternpowersinrecognizingNewChina.Insodoing,itsprimaryconsiderationwasobviouslyitstradeandeconomicinterests.BritishinvestmentaccountedformorethanhalfoftheentireforeigninvestmentinChinawhenNewChinawasestablishedin1949.Thet…     

A Study on Current and Future Guanxi Networks of China

Despite the abundant opportunities are presented by Chinese market, many foreign practitioners have commented that operating in China is more complex and time consuming than necessary, and of the 53 companies interviewed by Hong Kong＇s Bank of East Asia, 42% were reported not to be profitable （Economist Intelligence Union （EIU）, 1995）. Given the fact that China＇s potential as a market is unparalleled, while many foreign business practitioners have commented that operating in China is difficult to be profitable, and it is more complex and time consuming than it is necessary （Ewing, Garuana ＆ Wong, 1999）, a large number of researches on doing business hi China recogniZe the concept of Guanxi, a business relationship network, as the key for conducting successful business in China This study co llectsboth primary data and secondary data to explore the issues of Guanxi. The review on the secondary data helps to build the analysis techniques and study instruments. A survey questionnaire is developed after the study on the secondary data, and the primary data is collected from the surveys, which are faxed to sample groups in both Taiwan and Mainland China. The study on the Mainland China senior managers is to find the current Guanxi concept of China, while the Taiwan senior manager group and the Mainland China college student group are chosen to explore the future Guanxi changes. By using statistical techniques of the mean and standard deviation calculations, the t-test for two samples with equal variances, and the correlation test, the findings of this study help to answer the critical questions concerning the study objectives. The practical interpretation and implications of this study of Guanxi are gained from the summary of the statistical results. A conclusion and recommendations of this study on the Guanxi concepts are presented to business practitioners both inside and outside of China.     

Reform of Labor Policy in China：A Perspective of Political Economy

Ⅰ. IotroductionLike other related institutional arrangments in China,labor policy under the planned economic system re-sulted in two kinds of inefficiency. First, the inherentlack of labor supervision and lack of an incentivemechanism in the micro-management system led to lowtechnical efficiency. Second, the distorted allocation of     

Toward A Financial Architecture in East Asia： A Proposed Roadmap and China＇s Perspective

This paper provides with a proposed roadmap for strengthening financial architecture in East Asia. We discuss the goals, driving forces and obstacles in the short and medium run and correspondingly suggest possible steps that would be taken at different stages. A longterm vision is also briefly presented. The main points we have made are as follows. (1) An East Asia monetary union can be an ultimate long-term objective for the region. (2) In order to achieve this, we shall start with amending the current CMI mechanism and fostering the need of regional local currencies in trade and financial transactions through establishing regional bond market in the short-term. (3) A regional bond market with local currencies involved and a more stable exchange rate arrangement in a broader scope to emerge are likely in the medium term.     

China and India： A Tale of Two Economies

I. Two Populous GiantsIt has been conventional wisdom to make comparison between the two geographicallylarge and populous countries, which share a long common border, have entrepreneurialtrading heritage, enormous internal diversity, large agricultural sectors, ancient culturesand almost five thousand years of histories. Both were noted for their economic prowess inthe past, albeit their more recent history of the last two centuries has been replete withdistressful colonization of one and eco…     

Budget Structure and Pollution Control： A Cross-country Analysis and Implications for China

In the published literature, the differences in environmental performance across countries are typically explained using the Environmental Kuznets Curve. The Environmental Kuznets Curve states that pollution initially increases with economic growth. Once GDP per capita reaches a certain level, the relationship reverses. In the present paper, we provide an alternative hypothesis, where budget structure plays an important role in explaining the variations in pollution across the world.＂ the lower the business-related taxes as a share of total tax revenue, the higher the property tax in total tax revenue and the higher the ratio of public health expenditure in total expenditure, then the stronger the incentive of pollution control and the lower the pollution level. Our empirical findings reveal that the budget structure does have an important impact on pollution control. The policy implication of this research is that effective control of environmental pollution requires changes in tax structure and expenditure assignment. This research has important policy implications for China ＂s tax system reform and pollution control efforts.     

State Fragmentation and Rights Contestation： Rural Land Development Rights in China

The functionalist reasoning of institutional changes builds on individual rationality and explains institutional changes from the demand side. While insightful, a comprehensive understanding also needs to take into account the supply side, The state, as the ultimate supplier of institutional changes, plays the pivotal role of agency; therefore, its willingness and ability decide how such regime change occurs and what partieular form the new regime takes. Since the mid-1990s, the Chinese economy has embarked on a path of rapid industrialization and urbanization. The contestation over rural land development rights in China offers an excellent case to illuminate the importance of state agency in institutional changes. Drawing on case studies in China＇s three major urbanizing regions, this article analyzes how villages brought their own land directly to the land market and reaped handsome profits. We argue that the three successful cases, Nanhai in Guangdong, Kunshan in Jiangsu and Zhenggezhuang in Beijing, all represent a product of active agency on the supply side. The Chinese state＇s fragmented authority provides a favorable institutional environment for such changes.     

Defects in China＇s Independent Director System： A Case Study of Leshan Power Company

A system has been set up in China which provides for independent directors of listed companies. Whether these independent directors could play an effective role has, however, always been a matter for dispute. The recent case of Leshan Power shows that under the legal framework and share structure which currently exists in China, there is very narrowscope for independent directors to carry out their function. After discussing the main obstacles to implementation of independent directorship of China‘s listed companies, the authorpoints out several measures that must be taken in order to enhance the effectiveness of boards of directors. Finally this paper concludes that without the necessary conditions forindependent directors to actually have a functioning role to play, invitation of independent directors by listed companies will be a matter of form only.     

China＇s Economic Prospects and Sino-US Economic Relations

A better comprehension of the mixed sentiment in the rest of world towards the rapid rise of the Chinese economy will depend on the understanding of some key features of the Chinese economy, such as those associated with its size, structure and institution. To further sustain its high growth, China is facing more challenges than it has encountered in the past 2 decades, including a gamut of material constraints. Although polices and technological progress might alleviate many of these constraints, the ultimate solution will still lie in continued institutional reform. China's recent move towards a more flexible exchange rate regime is in line with its broad reform and in accordance with the progress of its development. However, such a move will have limited immediate effects on the prodigious US trade deficit, which itself is a problem rooted in the flawed international reserve system, far beyond a Sino‐US trade issue. Edited by Xiaoming Feng