Analysis of the Adjustment of China＇s Fiscal Policy in 2005

The prudent fiscal policy adopted in 2005 is the result of adopting a series of measures to strengthen macro control in recent years. The process of implementation will be gradual.During this period, pushing forward reforms is the main focus of all the measures. Tax reform, social security system reform and rural reform will need the most emphasis.     

Structural Restriction in the Development of China＇s Financial Industry

After China‘s accession to the WTO, the main problem China now faces in its financial development is how to enhance international competitiveness while safeguarding financial security. Since reform and opening up, the development of China‘s financial industry has featured extensive quantitative expansion, but without sufficient consideration given to increased risk. This has led to serious defects in the financial structure, which has hampered the financial industry from further development and from improving its international competitiveness. All these have had unfavorable impacts on financial stability and security.Therefore, in developing China ‘s financial industry, the stubborn pursuit of growth in quantity is inadvisable. What is needed is to change this way of thinking and to promote reform and development of the financial industry with emphasis on structure improvement,and to seek a way of development that can raise international competitiveness, while at the same time ensuring financial security.     

China＇s Labor Transition and the Future of China＇s Rural Wages and Employment

This paper contributes to the assessment of China＇s rural labor markets. According to our data, the increase in off-farm employment that China experienced during the 1980s and 1990s continued during the 2000s. Our analysis shows that migration has become the most prevalent off-farm activity, although the destination of migrants is shifting from outside of one＇s province to destinations closer to home. The present paperfinds that large shares of male and female individuals, especially those under 40 years, are working off the farm. These findings represent an important contribution to the labor economics field. First, the results of the present paper reveal that the labor transition from the agricultural sector to the non-agricultural sector for key segments of China＇s rural labor force is nearly complete. Second, although a large share of China ＂s rural labor force work in agriculture, most of these workers are older men and women （and likely would not be willing to take low-wage, labor-intensive jobs）. Third, the rising unskilled wage rate in China is partially a result of the tightening of the labor force in the young age cohorts. Finally, due to factors associated with the one child policy and other demographic transition forces, successive age cohorts will continue to fall in absolute number in the coming decade. Assuming China＇s growth continues, we expect to see further wage increases since it will take higher wages to coax more workers to work off the farm.     

Review of the EU＇s Preliminary Assessment of China＇s Market Economy Status

In June 2004, the European Union (EU) made a decision on its preliminary assessment of China‘s market economy status (MES). After seriously studying the EU‘s preliminary assessment report, the Institute of Economic and Resources Management of Beijing Normal University made a review. We hold that the decision on the assessment fails to be fair and objective and is undermined by incorrect understanding and logical contradictions. However, the decision has still left some leeway for China‘s improvement and China needs to speed up in improving its market economy regime.     

China＇s Energy Strategy in the Twenty-first Century

I. Introduction As the biggest developing country, China’s energy consumption has increased substantially. China is now the second largest energy consumer in the world and its primary energy consumption accounts for 13.6 percent of the world total. In the global energy market, China seems to have an endless appetite for oil and gas. China depends on imports for more than 40 percent of its oil. According to an estimation by British Petroleum (BP, 2005), from 2000–2004, China’s oil consum…     

Retesting the Separability of China＇s Rural Households

This article retests the separability of China’s rural households in light of growing doubt about the sustainability of high economic growth in China.If a household’s production decisions are "separable "from the household’s consumption decisions,generally this suggests there is no surplus labor.Many scholars aver that China’s surplus rural labor has spurred rapid economic growth,but concerns have arisen as to whether China still has surplus labor available.We investigate this issue using rural household panel data from 1993 to 2009.The regression results confirm that households in rural China have progressed from being non-separable to separable.The estimation results for both the entire country and regions reject the separability hypothesis before 2004 but fail to reject the hypothesis after 2004(with the exception of the central region).These results suggest that China ’s surplus labor supply is dwindling,especially in the eastern and the western regions.The sustainability of China’s high economic growth is questionable in the absence of a large reservoir of surplus rural labor.     

Anomaly in China＇s Dollar-RMB

Newly-established data on onshore deliverable US dollar-RMB forwards and the Shanghai lnterbank Offered Rate from Oetober 2006 to April 2009 reveal significant violations of covered interest rate parity. This paper explains the cause of this anomaly. Deviations in the forward market are caused by an increase in US dollar-to-RMB conversion restrictions. Given that Chinese monetary authorities want to prevent market participants from taking advantage of the predictable appreciation of the RMB, China＇s State Administration of Foreign Exchange has to tighten up the control on US dollar-to-RMB conversions. Under the tightened conversion restrictions, similar deviations will resurface in the forward market whenever hot money inflow increases. One way to avoid covered interest rate parity violations in the forward market is to decrease hot money inflow into China by maintaining a stable and credible exchange rate policy.     

Basic Evaluation of the Process of China＇s Industrial Modernization

As China will change from a large industrial power into a strong industrial power in the 21st century, the inevitable demand is for industrial modernization. This paper puts forward three criteria for judging the degree of realization of industrial modernization: industrial growth efficiency, industrial structure and industrial environment. Together with these, it constructs an indicator system and indices for evaluating the level of industrial modernization, and uses this indicator system to evaluate the level of China‘s industrial modernization at the tam of the century. The resulting comprehensive index of China‘s industrial modernization is 28. 72. This indicates that, through the rapid industrialization which has taken place over more than 20 years of reform and opening up, China has commenced its industrial modernization, which is now in the primary stage of development. The core of the strategy for further development should be to accelerate the process of industrial modernization.     

Examining the Development of China＇s Industrial Park Critically

Like Silicon Valley of U.S.A. and Singaporean Science Park, the development of China＇s industrial park plays an essential role in the development of the economy, especially in the promotion of the key competitiveness of a city. However, ＂the parks＇ popularity＂ leads to a lot of chaos phenomena, such as quantity chaos, industry chaos, programming chaos and so on in recent years; authors examined closely with the eyes of philosophy and proposed the philosophical route and ultimate idea of parks＇ development from the viewpoint of the whole world.     

Viability and the Development of China＇s Capital Markets

The paper analyzes the abnormal phenomena in China‘s capital markets and provides a critical review of the existing hypotheses about the phenomena. The paper argues that thelack of “viability” among most of the listed SOEs is the primary cause of the problems in China‘s capital markets. The paper also applies a consistent framework to analyze the relationship among viability, SOEs and the capital markets, and makes some policy proposals for improving China‘s capital markets.     

Japan＇s Bubble,the USA＇s Bubble and China＇s Bubble

This paper compares the three recent episodes of boom and bust cycles in asset prices: Japan in the late 1980s to the 1990s; the USA since the mid‐1990s; and China during the past decade. Although we have not yet seen a collapse of Chinese property prices, their increases so far are comparable to those in the other two episodes and a careful comparative study is warranted. The present paper first examines the behavior of asset prices, of property prices in particular, in the three cases, and highlights some similarities. The paper emphasizes the role played by extremely easy monetary policy in generating bubble‐like asset price behavior in the three cases. The reason for easy monetary policies is investigated. In the US case, the monetary authority was concerned about the risk of deflation in the early to mid‐2000s. The experiences of Japan and China are quite similar in that the monetary authorities of both countries were seriously concerned about the possible deflationary effects of exchange rate appreciation on the economy. The implications of such a finding for the future of Chinese macroeconomic policy are discussed.     

Reform of China＇s Pension System

This paper mainly analyzes development and reform of China‘s pension system. It introduces the evolution of China‘s pension system reform and discusses its strengths and problems.The paper then proposes some suggestions on the direction of China‘s pension reform. The last section is devoted to a discussion of China‘s corporate occupational pension, which is a fast-developing area of the pension system.     

Study on China＇s Logistics Industry in the Information Era

In the information era, China＇s logistics industry faces a development opportunity, as well,as an austere challenge. In order to establish a reasonable strategy in China, it is very important to analyze the logistics industry＇s operation circumstances with a global and informational perception. For this reason, this article analyzes the current situation of China＇s logistics industry, identifies the existing problems, and further finds the possible solutions in present China.     

Financial Services in the Doha Round and China＇s Commitments

Current negotiations on financial services at the WTO are concerned with improving liberalization commitments over the Financial Services Agreement which became an integral part of the General Agreement on Trade in Services (GATS) in 1997. Important underlying issues of these negotiations are member states‘ policy decisions in two particular areas: capital account liberalization and prudential regulation. These decisions not only determine the member countries‘ scope for liberalization,, the liberalization commitments in turn also limit the scope of national economic poliey in these two areas. Taking these characteristics offinancial services talks into account, there are two major goals for the ongoing negotiations:for industrialized countries to make progress with respect to trade business and for developing countries and emerging-market economies to concentrate on improving market access on an established basis. For China, the most important goal is to implement the far-reaching liberalization commitments that were made in the context of its accession to the WTO in December 2001.     

Japanese Enterprises＇ Investment in China＇s Software Industry

I. Overall Conditions of Investment by Japanese Enterprises in China Starting from the 1980s, investment by Japanese enterprises in China has been growing continuously. In 2004, Japanese investors established 3454 firms in China, 6.15 percent more than in 2003. Contractual foreign investment amounted to US$9.162bn, 15.17 percent up from 2003, whereas the foreign investment actually used was US$5.452bn, up by 7.86 percent from 2003. In 2004, the number of newly established Japanese enterp…     

MBO＇s Influences on the Allocation of Corporate Control Rights of Listed Companies in China

In the situation of diversification of State-owned Enterprise＇s Property Right, Collective Enterprise＇s privatisation and the system renovation of Corporate Governance, MBO is emerging in China quietly. Although having experienced the challenges from ＂suspending＂ to various regulation restrictions, MBO＇s positive effect on the allocation of control rights and Corporate Governance of Chinese listed companies is undeniable. In this article, we did a positive research on the process, characteristics and consequences of MBO＇s influences on the allocation of Corporate Control Rights of listed companies in China and probed into the realistic significance of the change of Corporate Control Rights structure from theoretical perspective.     

Comparative Analysis of Capital Productivity in China＇s High-Tech Industries

While labor productivity is a topic of constant debate and has been studied extensively, far less attention has been devoted to the question of capital productivity. Productive use of physical capital is an important source of economic growth and investment return. This paper presents a comparative study of capital productivity in China‘s high-tech industry. Using a version of the perpetual inventory method (PIM), new estimates have been made of the physical capital stock by sector. Capital productivity in China‘s high-tech industry is higher than in total manufacturing, but the gap between them has been shrinking. Comparison with high-tech industries in the US., highlights that China‘s high-tech industries could play a more important role in the growth of manufacturing and the whole economy.     

Foreign Value-added in China＇s Manufactured Exports： Implications for China＇s Trade Imbalance

Economists have recently become interested in weighting how much domestic value-added is actually included in China’s exports.Formally,the proportion of foreign and domestic contents could be identified by calculating the vertical specialization share using non-competitive input-output tables.Applying such a method to the Chinese case,however, would result in a big measurement bias because China has a large share of processing exports,which utilize a disproportionately high percentage of imported intermediates.This paper,by directly employing 2008 trade data for which imported intermediates in both processing and non-processing trade could be identified by means of various trade patterns, provides a simplified way to estimate the share of foreign/domestic value-added included in industry-level manufactured exports.This paper finds that the vertical specialization share of China’s processing exports was about 56 percent in 2008,compared to about 10 percent for ordinary exports.It also finds that the sectors that experiencedfast expansion of processing exports have a much higher share of foreign contents.Since processing exports account for about half of Chinese exports,the prevailing trade statistics,which focus on gross values rather than the value-added of exports and imports,has obviously overstated the bilateral trade imbalances,especially between China and the USA.