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.     

Botshabelo: The face of ‘orderly urbanisation’?∗

Botshabelo (also known as Onverwacht) is the largest relocation area in South Africa, but very little is known about it. Towards the middle of 1986 a multi‐purpose survey was conducted in this area, covering, among others, topics such as cooperative development, the informal sector, the roles of religion and of women in development. social services and the general experience of urbanisation.

The main research findings centre on the politico‐ideological factors responsible for the establishment of Botshabelo, the consequences of the uncontrolled and uncontrollable urbanisation process, the absence of broad political and social solidarity and the specific forms of dependency facing Botshabelo. The majority of the population of Botshabelo find it difficult to cope with the demands of urban life. Various characteristics of a culture of poverty are present and there is a lack of integrated participation by a wide spectrum of participants in the area as a whole. The way in which Botshabelo came into being is by no means conducive to the formation of a sense of belonging.

Direct efforts have to be launched in order to break the stalemated position of Botshabelo's political, economic and social dependency. In this regard the need for opinion leaders, active involvement by women, the informal sector and cooperative development as well as the necessity for a high degree of participation are listed.     

The implications of the ‘Belt and Road Initiative’ on globalization and inclusive growth for the Eurasian continent

The ‘Belt and Road Initiative’ (BRI) and other emergent forms of transnational institution building raise new fundamental issues for economists and social scientists. Can BRI become a template for a new phase in the globalization process – a stage in which China takes a more proactive role? Can BRI help Central Asian economies that until now had been standing on the sidelines become fully integrated into the global division of labor? This article tries to analyze China’s potential of assuming a more central role in international economic governance and globalization process, which would also be in line with the size of its population and GDP. Further, the article analyzes the potential impacts of the BRI on inclusive growth for the poorly integrated Eurasian landmass by inspecting several direct and indirect channels.     

The ‘Visible Hand’ of the ECB’s first quantitative easing

Quantitative easing à la ECB has produced significant impact on long-term nominal rates through ex ante channels, such as signalling channels, term duration channels, and risk premia channels, well before it materially started. Ex post difference-in-differences estimation suggests a significant impact on long-term government bond yields, while the impact of the ECB’s first QE on the key inflation rate is very weak. The term duration channel may also lead to a lengthening of the average maturity of government debts, with possible implications for fiscal policy. The ECB’s determination to buy government bonds in a fragmented market with a low net supply is also producing an ex post impact, i.e. during the actual asset purchases. High rates volatility suggests that this impact is less on nominal rates and more on financial plumbing. As the effects of scarce supply in collateral markets are felt, repo rates remain well below zero. Low supply and limited re-usability of high quality collateral, capped by regulatory requirements, is an additional constraint on market liquidity and compresses dealers’ balance sheets. By keeping a depressed yield curve and asset prices high, QE is also accelerating the consolidation of both traditional and capital-market based (dealer) bank business models, raising questions about implications for global collateral flows and deposit-like funding channels.     

The Collapse of the ‘New EMS’: An Interpretation

Existing theoretical models cannot explain the following features of the EMS and its crisis in 1992: its progressive hardening from 1987 onwards; the fact that credibility was shared the progressive deterioration of credibility after the first Danish referendum without changes in the economic fundamentals. This paper argues that the reason lies in the fact that the literature has not accounted for the changes in the perceived prospects of EMU. We show that an adjustable peg regime that incorporates these prospects can explain the three features listed above.     

The ‘Belt and Road Initiative’ in the discourses of the Central Asian states: political rhetoric of growth and academic prognostication

As official discourses throughout Central Asia reflect, China’s ‘Belt and Road Initiative’ has become very attractive to the local regimes. They perceive it as corresponding to the urgent need to achieve social and economic growth and maintain alternatives for international cooperation. Political elites have incorporated the BRI-agenda into their rhetoric of growth and actively promote the idea of BRI’s ‘conjugation’ with local development plans. The success of the initiative, however, differs from state to state.

The BRI-related narratives of local expert communities mainly correspond to the goals set by the officials. At the same time, local experts elucidate important issues, such as BRI’s impact on national security, Chinese migration, and public discontent. These elucidations may adjust the official stand towards the BRI. The possibility of such adjustments, varying in different Central Asian states, depends in each case on the openness of a regime to scholarly prognostications.

Abbreviations: BRI - Belt and Road Initiative; CDA - Critical Discourse-Analysis; DHA - Discourse-Historical Approach; SCO - Shanghai Cooperation Organisation; EAEU - Eurasian Economic Union; TAPI -Turkmenistan-Afghanistan-Pakistan-India (pipeline)     

China’s fare share? The growth of Chinese exports in world trade

The growth of Chinese exports in market share over the past two decades is a singular event in the history of world trade. Using data from 1995–2010, we document this growth in a variety of ways. We show that the expanded trade is pervasive. Virtually every country in the world has seen China claim a larger share of its import market. Then, we use Constant Market Share analysis to determine which country or countries have lost market share as China’s trade has grown. Contrary to much discussion in the popular press, we find strong evidence that other developing countries have not seen export shares fall as a result of China’s gains. Rather, our results suggest that China’s share growth has come largely at the expense of exporters based in developed countries, especially Japan and the United States.     

The effect of foreign direct investment on firm growth: the case of Taiwan’s manufacturers

Foreign direct investment (FDI) can be roughly separated into an expansionary type and a defensive type. Expansionary FDI seeks to exploit the firm-specific advantage in the host country whereas defensive FDI seeks cheap labor in the host country to reduce the cost of production. Based on Taiwanese data, we examine the effects of these two types of FDI on survival and growth performance of investing firms. Both types of FDI are shown to be beneficial to the survival of firms. Expansionary FDI has the additional benefit of contributing to the sales growth of investing firms at home while defensive FDI is neutral to sales growth. Both types of FDI are also shown to be uncorrelated with job creation or job displacement at home. Our results suggest that FDI will strengthen rather than weaken the viability and competitiveness of domestic industries. It cannot be blamed for industrial ‘hollowing-out’.     

The ‘price revolution’ of the sixteenth century: Some Swedish evidence

Abstract

Since the publication in 1895 of George Wiebe's work, Zur Geschichte der Preisreuolution des XVI. und XVII. Jahrhunderts, ¹ the ‘price revolution’ has been a generally accepted concept found in most historical textbooks. By the ‘price revolution’, Wiebe meant the general rise in commodity prices which occurred in western Europe during the 16th century, the primary cause of which according to him was the influx of silver from the new Spanish possessions in America. His explanation also came to be generally accepted, but perhaps an even more significant contribution to the influence which this book has wielded is the fact that he synthesized in readily usable form the price analyses in existence when he wrote, i.e. at the end of the 19th century. In the 1930s his tables still formed the basis of sweeping conclusions and generalizations.     

The growth of population in Norway 1735–1855

Abstract

The rapid growth of population in many underdeveloped countries during recent years has caused widespread concern. It has, not surprisingly, also helped to focus the attention of demographic historians upon the processes of population growth in western societies, during their pre-industrial and early industrial stages. Scandinavia has occupied a central place in the discussion; chiefly, because here, by a happy accident, the industrial revolution was preceded by an administrative revolution. As a result of this we have an unparalleled set of population statistics dating from the mid- eighteenth century. Sweden, in particular, has become something of a Mecca for demographic historians. Of all the nordic countries her statistics are the most comprehensive and through such studies as those of Swaine Thomas¹ Gille,² Heckscher³ and Utterström,⁴ the most thoroughly explored. Although less well known, the Danish, Norwegian, Finnish and Icelandic material is also of a very high order. Perhaps in the past some of it, in Norway at least, has been accepted too uncritically. Nevertheless, despite the one or two startling errors in the present Norwegian population statistics (they are discussed in the first part of this paper), Norway remains one of the few countries where it is possible to analyse pre-industrial population movements on a statistical basis.     

The ‘annual budget’ of north Finnish farmers at the end of the 17th century

Abstract

The extent to which the 17th-century farmer received money for his produce, for the payment of taxes, and how much he may then have had left over for other purposes is a question which has been but little discussed in historical research either in Finland or in the other Nordic countries. The solution of the problem is made difficult by the defects in, or even absence of, trade statistics for the period, and because it is not known what proportion of his taxes the farmer paid in kind and what proportion in money. Ostrobothnia or, more generally, northern Finland, is the most suitable area for study, especially for the purpose of examining the payment of taxes. It has been possible to show that in Ostrobothnia the taxes of the 17th-century farmers were paid almost without exception by the urban burgher, the very man who provided the farmer with credit. ¹ According to an inspection carried out in 1679. about 80 per cent of the Ostrobothnian fanners did their main business with those burghers to whom they were chiefly in debt. Finnish State Archives (FSA), Crown fiscal records, vol. 9177. Luukko, Etelä-Pohjanmaan historia [History of Southern Ostrobothnia] III (1945), pp. 249–257. A more difficult problem in Ostrobothnia is the volume of the annual exports of the towns in the province during this period. Even if estimates could be made, it would still be difficult to tell how many of the export goods arriving in Ostrobothnian towns originated from the province itself and how many from central and eastern Finland. Moreover, the farmers' own shipping, i.e. the transport of rural produce through the Ostrobothnian towns direct to the staple towns or elsewhere, has also to be taken into account.     

‘饿死’不如‘改嫁’

时下,以“抓大放小”为重点的企业改革正在进行,一批小、微、亏企业纷纷寻靠山、找出路,兼并到优势企业,“改嫁”到新的“婆家”;一批大企业也以扶贫济困为已任,把那些不景气、甚至吊氧气的“丑小鸭”归依“门下”,不断发展壮大自己,企业资产得以优化组合,大小企业皆大欢喜。 然而,“林子大了,各种鸟都有”。笔者最近在同一城市见到了截然不同的两个企业。一个是亏损多年仅80余人的国有金属材料厂,主动与相隔不远、效益很好的一个集一体性质的铜业集团“喜结良缘”,兼并后成为集团的一员。结果,集团效益再上台阶,小厂也获新生。与之相反,同城有一个小酒厂却羞于“二婚再嫁”。这个厂生产的白酒质量不错,但牌子不响,市场不广,经营平平。有关部门为帮助该厂求发展,提出让另一家产品十分紧俏的大酒厂兼并之,结果屡遭拒绝,至今未成。 这两个例子,一个“珠联璧合”双方得利,一个则好事多磨久无结果。我们为前者以事业为重、以改革为大局的高风亮节拍手叫好,又为资产难流动、优势难互补的后者遗憾。那么,缘何类似后者这样的“守摊者”还有一定的市场呢?笔者以为,皆缘于思想解放不够。要么是放不下架子,企业与企业之间本是兄弟关系,随着资产的流动,却变成了大企业控股、小企业参股的“母子关系”,身份地     

The building up of new imbalances in China: the dilemma with ‘rebalancing’

This paper offers a theoretical basis for the concept of rebalancing and applies it to China, where it is currently a topical issue. Rebalancing here means the correction of economic and social imbalances built up during industrialization. This correction is accompanied by a structural transformation towards a more inward- and consumption-driven growth path, associated with growth slowdown. Attempts to mitigate this growth slowdown by either retarding this structural reform process or by using expansionary stimulus programmes as done over the past decade in China create new imbalances that have to be corrected (rebalanced) again. Managing these multiple rebalancing tasks together is a tremendous undertaking, as this paper shows.     

Towards a ‘new normal’ growth strategy: China in comparative perspective

China’s move towards a new normal has been motivated by domestic factors and accelerated by the decline in export opportunities to developed countries. This decline, combined with the knock-on effects of China’s growth adjustments, is disrupting the favourable external environment that made developing countries’ export-led development strategies viable. This paper concentrates on a rebalancing of developing countries’ growth strategies towards a greater weight of household consumption as a potential alternative and discusses three challenges – market size, domestic purchasing power and balance-of-payments constraints. Concentrating on the latter, it analyses changes in sectoral compositions of consumer demand and patterns of international trade. Results point to the risk that a shift in growth strategy causes an import surge. The paper’s findings indicate the scope and speed of required product innovation that would prevent a rebalancing of growth strategies towards a greater role of consumption from running into balance-of-payments constraints.     

Intoxicants and the invention of ‘consumption’

In 1600 the word ‘consumption’ was a term of medical pathology describing the ‘wasting, petrification of things’. By 1700 it was also a term of economic discourse: ‘In commodities, the value rises as its quantity is less and vent greater, which depends upon it being preferred in its consumption’. The article traces the emergence of this key category of economic analysis to debates over the economy in the 1620s and subsequent disputes over the excise tax, showing how ‘consumption’ was an early term in the developing lexicon of political economy. In so doing the article demonstrates the important role of ‘intoxicants’—that is, addictive and intoxicating commodities like alcohols and tobaccos—in shaping these early meanings and uses of ‘consumption’. It outlines the discursive importance of intoxicants, both as the foci for discussions of ‘superfluous’ and ‘necessary’ consumption and the target of legislation on consumption. It argues that while these discussions had an ideological dimension, or dimensions, they were also responses to material increases in the volume and diversity of intoxicants in early seventeenth-century England. By way of conclusion the article suggests the significance of the Low Countries as a point of reference for English writers, as well as a more capacious and semantically sensitive approach to changes in early modern consumption practices.     

Monopolising Islam: The Indonesian Ulama Council and state regulation of the ‘Islamic economy’

The Ulama Council of Indonesia (MUI) is an advisory body with a nationwide network of branches that produces fatwa ‘to guide the Islamic community and the government’. Nominally an independent NGO, MUI has always had a complex and mutually dependent relationship with the state, which established it and funds it. This paper describes regulatory changes since Soeharto's fall in 1998 that have expanded MUI's formal role in the state system for the administration of Islamic legal traditions and, in particular, the ‘syariah economy’. These changes have heightened MUI's influence and the legal authority of its fatwa, granting it new institutional roles (and, in some cases, monopolies) in relation to halal certification, Islamic finance and the haj pilgrimage. MUI has now begun to accrue quasi-legislative powers resembling those enjoyed by state ulama councils and state Muftis elsewhere in Southeast Asia, but not previously available to any modern Indonesian fatwa-producing body.     

The growth of patenting in New Zealand, 1860–99

Patent applications by male New Zealand inventors sharply increased in the early 1880s after initial official fees were reduced, and the requirement to advertise applications in newspapers abolished. Increasingly, however, applications lapsed, while applications by unskilled workers remained low. Non-fee costs were crucially important, with the 1870 reduction in fees failing to increase patenting, as hoped, because the doubling of mandatory advertising costs negated the fees reduction. Patenting by overseas inventors was less affected by fees, and steadily grew. Only one application was by an indigenous Māori person, while even in 1899 women made just 2.5% of applications.     

China's ‘New Normal’: Is the growth slowdown demand- or supply-driven?

China's ‘New Normal’ has been much discussed in recent years. An important aspect of the New Normal is the growth slowdown from levels of around 10% per annum to a more modest 6 or 7%. Not surprisingly, there has been widespread discussion of whether the slowdown is permanent or not and, in either case, what the sources of the slowdown are. However, much of this discussion has been based on informal analysis of the data rather than formal econometric results. We make a move in the direction of formal empirical analysis of this issue by estimating and simulating a vector autoregressive (VAR) model which distinguishes between demand, supply and foreign shocks as possible drivers of changes in economic growth. We analyse both two-variable (growth and inflation) and three-variable (foreign growth, domestic growth and inflation) VAR models and identify demand, supply and foreign shocks, using a modification of the Blanchard-Quah identification procedure. In the two-variable model we identify two shocks (demand and supply) and find that the slowdown since the GFC has been mainly supply-driven. This conclusion is not changed when a foreign growth variable is added to the model and a foreign shock is allowed for – we find that demand continues to be of relatively little importance, that the foreign shock also makes little contribution to explaining the long-run growth decline in China which continues to be driven by long-term supply factors. This conclusion is robust to a number of alternative formulations of the model. Thus, the growth slowdown may, indeed, be characterised as the ‘New Normal’.