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Begin New Search Topic Economics Political Geography China Content Type Working Paper Publishing Institution School of Oriental and African Studies - University of London

1. The Mainstream Economics Interpretation of the Local State and Central-Local Relations in Post-Mao China: a Critical Review

Author:
Alexandre De Podesta Gomes
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
Decentralization and the role of local governments have long been touted as key factors in the Chinese economic miracle. This paper intends to critically assess the chief theories advanced by mainstream economics in its attempt to make sense of these aspects of China’s growth story. Firstly the theoretical underpinnings of fiscal federalism, new institutional economics, and market-preserving federalism approaches will be presented, as these theories offer the bedrock for most of the applied insights in which China is framed through the lenses of the central-local relations debate. Secondly, the idea of ‘market-preserving federalism, Chinese-style’ will be critically appraised, highlighting its shortcomings. Thirdly, the paper proceeds by bringing in the mainstream response to these problems, relying on the notion of political incentives and career concerns faced by local cadres. It will be argued that the continual adherence to some core tenets dear to the new institutional economics literature in all previous explanations prevents this broad camp of knowledge to properly grasp the complex dynamics of China’s decentralization drive and the role of local governments in the process. Finally, and in closing, an alternative approach will be offered.
Topic:
Economics, Local, Decentralization, and Federalism
Political Geography:
China and Asia

2. Understanding the Recent trend of Income Inequality in China

Author:
Juzhong Zhuang and Shi Li
Publication Date:
06-2016
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper examines underlying factors that could explain the decline in income inequality in China since 2008 and inquires whether the decline indicates China‘s income inequality has peaked following the Kuznets hypothesis. The paper first identifies four key drivers of rising income inequality in China since the mid-1980: rising skill premium, declining share of labor income, increasing spatial inequality, and widening inequality in the distribution of wealth. It then provides evidence that the reversal of these drivers, with the exception of wealth inequality, could partly explains the decline in income inequality since 2008. The paper argues that since part of the reversal of these drivers is policy-induced, it is important that the policy actions continue for income inequality to decline further. The paper further argues that a critical factor underlying the Kuznets hypothesis is that taxation and transfers play a bigger role in income redistribution as a country becomes more developed, while their role is still limited in China, the future path of China‘s income inequality may not be one-directional, and may stay high before personal income tax plays a bigger role.
Topic:
Economics, Inequality, Income Inequality, and Tax Systems
Political Geography:
China and Asia

3. Developing or Under-Developing? Implications of CHina's "Going Out" for Late Development

Author:
Dic Lo
Publication Date:
07-2016
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
Since the turn of the century, China’s influence on world development has increased enormously. This paper seeks to analyse major attributes of the influence of China’s “going out”, centring on the argument that the influence has been in the main conducive to the rest of the developing world. Specifically, this paper offers a critique of relevant, popular theses such as “China’s neoliberalization crowds out world development”, “China under-cuts the conditions of the world’s working class”, and “China exhibits a tendency towards imperialism”, etc. It is argued that, in the context of a neoliberal world economy that is increasingly speculation-oriented, China’s production-oriented activities can be seen as an important countervailing force. Whether this China influence is to continue to be conducive to world development in the future, or to turn to become detrimental, depends critically on the broader political-economic context.
Topic:
Development, Economics, Hegemony, Trade, and Influence
Political Geography:
China and Asia

4. The Changing Pattern of China's Economic Relations with Southeast Asia

Author:
Anne Booth
Publication Date:
10-2016
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper examines the debates which have arisen in the ten countries of ASEAN about the impact of growing trade and investment ties with China, both before and after the full implementation of the ASEAN-China Free Trade Agreement in 2010. It examines the changes which have taken place in the country composition of trade and investment flows within the ASEAN countries, and between the ASEAN countries, China, and the rest of the world. The evidence indicates that while merchandise trade values have increased between China and ASEAN since 2010, the increase has not been as rapid as some predicted. But China is now running a substantial trade surplus with the ASEAN countries; the value of exports from China to ASEAN exceed the value of imports to China from the ASEAN countries. This surplus could lead to frictions in the future. Investment flows from China to ASEAN are still small in relation to flows into ASEAN from the rest of the world.
Topic:
Economics, Migration, Hegemony, and Trade
Political Geography:
China and Asia

5. Functional Distribution of Income and Economic Growth in the Chinese Economy, 1978-2007

Author:
Ricardo Molero Simarro
Publication Date:
02-2011
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper seeks to analyse the relationship between functional distribution of income, aggregate demand and growth in Chinese reform economy. For this purpose the Bhaduri-Marglin Model is used, stating the theoretical possibility of both profit-led and wage- led growth regimes. Subsequently, the principal literature on the evolution of factor‟s shares in China is reviewed. The statistical series for the period 1978-2007 are reconstructed in order to carry out our analysis of the relations between capital‟s share and investment, on one hand; and labour‟s share and consumption, on the other. Supported by the Model‟s preliminary estimations, it is argued that Chinese growth has been largely profit-driven. Finally, the implications are presented vis-a-vis concerning Chinese economic prospects.
Topic:
Development, Economics, Reform, and Investment
Political Geography:
China and Asia

6. China versus the Washington Consensus: The Anomaly for World Bank Advocacy Research (pdf)

Author:
Dic Lo
Publication Date:
01-2010
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
The Chinese experience of economic transformation has presented a serious challenge to the Washington Consensus. Since the mid-1990s, institutions upholding the Washington Consensus have mostly excluded the Chinese experience – because of its conspicuous anomaly – in their attempts to interpret worldwide transition and development in line with their policy doctrines. Yet, China did in fact rigorously implement the policy doctrines in the years 1993-1997, but only to result in severe social and economic problems. Since 1998, in the face of the problems and because of increasingly social resistance to the mainstream policies, China has progressively turned to focus on “constructing a harmonious society”. This turn represents a quest for a model of social and economic development that deviates fundamentally from the Washington Consensus.
Topic:
Civil Society, Economics, World Bank, and Social Policy
Political Geography:
China and Asia

7. China's Quest for Alternative to Neo-liberalism: Market Reform, Economic Growth, and Labour

Author:
Dic Lo
Publication Date:
11-2007
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
Since the turn of the century, China's state and society have focused their efforts on “constructing a harmonious society”. Viewed from the perspective of globalization, these efforts represent a quest for a model of development that deviates fundamentally from neo-liberalism. In particular, state policies and institutional reforms in recent years have tended to target at labor compensation-enhancing economic growth, rather than growth based on “cheap labor”. This paper seeks to clarify the nature of the emerging Chinese economic development model, and, on that basis, to analyze its efficiency and welfare attributes. In conjunction with an analysis of China's economic growth path, which seems to have undergone a transition from labor-intensive growth to capital-deepening growth, it is argued that the new development model does represent a more feasible and desirable pursuit than neo-liberalism. The paper concludes with a discussion on the impact of this new Chinese development model on the future direction of globalization.
Topic:
Development, Economics, Globalization, and Markets
Political Geography:
China and Asia

8. Infrastructure as Economic Density

Author:
Sangaralingam Ramesh
Publication Date:
12-2007
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
Income disparities are rising in China as a consequence of the economic reforms post 1979 which virtually gave unchallenged economic growth and prosperity to the coastal regions whose economic growth increased over the last 30 years at the expense of the interior hinterland. Institutions in China have seen the answer to restoring a rural-urban income balance by redistributing people from the interior regions of China to the prosperous coastal regions. This can be seen as a supply side reaction to the income disparity problem, which will inevitably impose the kinds of social costs, which concentrations of populations normally bring. This paper offers insights into other methods of transforming the urban-rural income disparity problem in China, the economic implications of infrastructure investment, the relevance of Krugmans 'New Economic Geography' to the transformative Economics which China has experienced over the last 30 years; and the close relationship between how Krugman's agglomeration economies arise and the development of SEZ's and HTDZ's in China.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
China and Asia

9. China's Economic Growth, 1978-2005: Structural Change and Institutional Attributes

Author:
Dic Lo and LI Guicai
Publication Date:
11-2006
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
China's sustained rapid economic growth over the era of its systemic reform is of general importance for late development under globalization. This paper seeks to construct an explanation of the experience, which centers around the notion of an evolving "regime of accumulation", or development path, that emboddies an uneasy mix of the attributes of allocative and productive efficiency. In this light, the analytical findings of the paper give rise to two main propositions. First, in contrast to the general direction of market reform in the institutional dimension, China's actual path of industrialization and economic growth has rather tended to contradict the principle of comparative advantage - it has been in the direction of capital deepening, especially since the early 1990s. Second, China's reformed economic institutions have encompassed both market-conforming and market-supplanting elements, represented by non-state-owned enterprises and state-owned enterprises, respectively, with the former accounting for the improvement in allocative efficiency while the latter accounting for the improvement in productive efficiency. The paper concludes with a discussion on the social implications of the findings and propositions.
Topic:
International Relations, Development, Economics, and International Political Economy
Political Geography:
China

10. Making Sense of China's Economic Transformation

Author:
Dic Lo
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
China's sustained rapid economic growth over the post-1978 reform era, which is also the era of globalisation, is of worldwide importance. This growth experience has been based mainly on China's internal dynamics. In the first half of the era, economic growth was propelled by improvement in both allocative efficiency and productive efficiency. From the early 1990s until the present time, however, economic growth has been increasingly based on dynamic increasing returns associated with a growth path that is characterised by capital deepening. In both periods, the growth paths and their associated long-term-oriented institutions contradict principles of the free market economy - i.e., doctrines of globalisation. In the form of an analytical overview, this article seeks to explain and interpret the historical background, logic of evolution, and developmental and social implications of China's economic transformation. The analytics draws on a range of relevant economic theories including Marxian theory of economic growth, Post-Keynesian theory of demand determination, and Neo-Schumpeterian theory of innovation. It is posited that these alternative theoretical perspectives offer better insights than mainstream neoclassical economics in explaining and interpreting China's economic transformation.
Topic:
International Relations, Development, Economics, and International Political Economy
Political Geography:
China