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121. 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

122. Income Distribution: Effects on Growth and Development

Author:
Nancy Birdsall
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
I review the literature on the effects of inequality on growth and development in the developing world. Two stylized facts emerge from empirical studies: inequality is more likely to harm growth in countries at low levels of income (below about $3200 per capita in 2000 dollars); and it is at high levels of inequality (at or above a Gini coefficien t of .45) that a negative association emerges. Between 15 and 40 percent of the developing world's population lives in countries with these characteristics, depending on the inclusion of China, whose level of inequality has recently been measured at almost .45. Theory and evidence suggest that high inequality affects growth: (1) through interaction with incomplete and underdeveloped markets for capital and information; (2) by discouraging the evolution of the economic and political institutions associated with accountable government (which in turn enable a market environment conducive to investment and growth); and (3) by undermining the civic and social life that sustains effective collective decision-making.
Topic:
Civil Society, Economics, Emerging Markets, and Markets
Political Geography:
China

123. Entrepreneurship and Political Guanxi Networks in China's Private Sector

Author:
Christopher A. McNally, Hong Guo, and Guangwei Hu
Publication Date:
08-2007
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
Since the mid-1990s the Chinese government has rapidly liberalized the environment facing domestic private firms. As a consequence, many private firms have clarified their ownership relations and acquired stronger organizational boundaries. However, despite this formalization of private sector institutions, informal guanxi networks remain a key component in firm success. Most significant among these guanxi networks are political networks that connect private entrepreneurs with actors in China's political sphere.
Topic:
Economics, International Trade and Finance, and Markets
Political Geography:
China and Israel

124. The Role of China in Asia: Engine, Conduit, or Steamroller?

Author:
Beth Anne Wilson, Jane T. Haltmaier, Shaghil Ahmed, Brahima Coulibaly, Ross Knippenberg, Sylvain Leduc, and Mario Marazzi
Publication Date:
09-2007
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper assesses China's role in Asia as an independent engine of growth, as a conduit of demand from the industrial countries, and as a competitor for export markets. We provide both macroeconomic and microeconomic evidence. The macroeconomic analysis focuses on the impact of U.S. and Chinese demand on the output of the Asian economies by estimating growth comovements and VARs. The results suggest an increasing role of China as an independent source of growth. The microeconomic analysis decomposes trade into basic products, parts and components, and finished goods. We find a large role for parts and components trade consistent with China playing an important and increasing role as a conduit. We also estimate some regressions that show that China's increasing presence in export markets has had a negative effect on exports of some products for some other Asian economies, but not for other products, including those of the important electronic high-technology industry.
Topic:
Development, Economics, International Trade and Finance, and Markets
Political Geography:
United States, China, and Asia

125. The Emergence of a New 'Socialist' Market Labour Regime in China

Author:
Gunter Schucher and Jutta Hebel
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
China's transition to a market economy has been a process of basic institutional changes and institution building. The institutional change from a socialist labour regime (SLR) as one of the backbones upholding the traditional leninist system to a new 'socialist' market labour regime (SMLR) became particularly important for the success of economic and political reforms. This analysis is based on the analytical framework of regimes and makes use of the idea of path dependence. An ensemble of institutions, mutually interconnected and influencing each other, forms the regime and shapes its trajectory. Six institutions are identified to constitute the employment regime: (1) the system of social control, (2) the production system, (3) the system of industrial relations, (4) the welfare system, (5) the family order, and (6) the educational system. The SMLR is still characterised by its socialist past and differs from other varieties of transformation labour regimes and bears little resemblance to labour regimes in Western market economies.
Topic:
Development, Economics, and Markets
Political Geography:
China and Asia

126. Reforming U.S. Patent Policy: Getting the Incentives Right

Author:
Keith E. Mascus
Publication Date:
11-2006
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
America's robust economic competitiveness is du e in no small part to a large capacity for innovation. That capacity is imperiled, however, by an increasingly overprotective patent system. Over the past twenty-five years, American legislators and judges have operated on the principle that stronger patent protection engenders more innovation. This principle is misguided. Although intellectual property rights (IPR) play an important role in innovation, the recent increase in patent protection has not spurred innovation so much as it has impeded the development and use of new technologies.
Topic:
Development, Economics, and Markets
Political Geography:
United States, China, and America

127. Chinese Poverty: Assessing the Impact of Alternative Assumptions

Author:
Sanjay Reddy and Camelia Minoiu
Publication Date:
04-2006
Content Type:
Working Paper
Institution:
Institute for Social and Economic Research and Policy at Columbia University
Abstract:
This paper investigates how estimates of the extent and trend of consumption poverty in China between 1990 and 2001 vary as a result of alternative plausible assumptions concerning the poverty line and estimated levels of consumption. The exercise is motivated by the existence of considerable uncertainty about the appropriate poverty lines to apply and the level and distribution of resources in China. The methodology of this paper focuses on the following sources of variation: alternative purchasing power parity conversion factors (used to convert an international poverty line), alternative estimates of the level and distribution of private incomes, alternative estimates of the propensity to consume of lower income groups, and alternative consumer price indices. It is widely believed that substantial poverty reduction has taken place in China in the 1990s, and we find this conclusion to be robust to the choice of assumptions. However, estimates of the extent of Chinese poverty in any year are greatly influenced by the assumptions made. China's record of reducing consumption poverty is dramatic. It is unclear whether this achievement has been comparable across regions and whether there have been corresponding national improvements in other aspects of human well-being.
Topic:
Markets, Political Economy, and Poverty
Political Geography:
China

128. Flying Geese or Sitting Ducks: China's Impact on the Trading Fortunes of other Asian Economies

Author:
Alan J. Ahearne, John G. Fernald, John W. Schindler, and Prakash Loungani
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper updates our earlier work (Ahearne, Fernald, Loungani and Schindler, 2003) on whether China, with its huge pool of labor and an allegedly undervalued exchange rate, is hurting the export performance of other emerging market economies in Asia. We continue to find that while exchange rates matter for export performance, the income growth of trading partners matters far more. This suggests the potential for exports of all Asian economies to grow in harmony as long as global growth is strong. We also examine changes in export shares of Asian economies to the U.S. market and find evidence that dramatic changes in shares are taking place. Many of these changes are consistent with a 'flying geese' pattern in which China moves into the product space vacated by the Asian NIEs or with greater integration of trade across Asia in the production of final goods. Nevertheless, China's dramatic gains in recent years do increase the pressure on Asian economies, particularly in ASEAN and South Asia, to seek areas of comparative advantage.
Topic:
Development, Economics, Foreign Exchange, International Trade and Finance, and Markets
Political Geography:
China, South Asia, and Asia

129. Challenges for China's Public Spending

Publication Date:
03-2006
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
China's evolution from a centrally-planned to a market-based economy is leading to major transformations of its public expenditure policies. Much progress has been made in raising infrastructure spending to a level more in line with China's development needs and in modernising mechanisms for budget planning and implementation. Nevertheless, significant challenges remain.
Topic:
Development, Government, and Markets
Political Geography:
China and Asia

130. The European Union Defence Industry and the Appeal of the Chinese Market

Author:
Eugene Kogan
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
Austrian National Defence Academy
Abstract:
This report deals exclusively with the European Union and the People's Republic of China (PRC, also known as China) and not with a broader range of issues, such as, for instance, the impact of an embargo lift on the Asia-Pacific balance of power or on the Trans-Atlantic relations. The concerns of countries, such as Australia, Japan, South Korea and, undoubtedly, Taiwan are a very important issue. However, this report sets out to deal exclusively with the EU-China issue. Nevertheless, one can say that, for instance, the delivery of the airborne early-warning and control system (AWACS) to China would considerably change the balance of power in the Asia- Pacific region and exacerbate already strained Trans-Atlantic relations. The US will face the serious dilemma of how to deal with the EU over such deliveries to China, since the EU is their partner and not a subordinate as Israel is, for instance.
Topic:
Security and Markets
Political Geography:
Japan, China, Europe, Asia, South Korea, and Australia

131. China in the World Trading System

Author:
John Whalley
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
This paper discusses China's trade policy stance following World Trade Organization (WTO) accession in 2002. Three broad issues are considered. The first is the extent to which WTO accession helps China in dealing with various key trade issues, including anti-dumping and the textiles and apparel trade. The second is China's participation in regional trade agreements post WTO accession. The third is the implementability of China's accession commitments in key service areas (banking, insurance, telecoms). The issues now for China are less the merits of WTO accession, and rather its trade policy decisions given WTO membership.
Topic:
Human Rights, International Trade and Finance, and Markets
Political Geography:
China and Asia

132. CIAO: China — Market Manipulation

Author:
Caspar Fithin
Publication Date:
11-2000
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
A leaked Shanghai Stock Exchange report has detailed the extent of trading irregularities within China's domestic equity markets. In the primary market, a series of companies have falsified records on profits, assets and even entire businesses in order to publicly issue and list shares. In the secondary markets, insider trading, the spreading of false information, coordinated stock purchases, price ramping and sales of stocks by large institutional investors are common practice. The extent of trading irregularities reflects the government's preference for market growth over regulatory standardisation. This approach is undermining the CSRC's credibility. Unless regulatory practices are tightened, institutional investors will not have the maturing effect on markets and stabilising impact on prices the government seeks.
Topic:
Economics, Government, and Markets
Political Geography:
China