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This article introduces a special issue on technological development and policy making in China, highlighting their importance for China's economic growth. It discusses the shift in China's economy from reliance on property sector investment and low-value manufacturing to a new paradigm based on technological innovation and internal market expansion. The article emphasizes the need for adaptive policy making and financing support for science and technology development to enhance productivity growth. It also explores the Augmented National Innovation System (ANIS) in China, the growth of the semiconductor industry, and the limitations of the fiscal system. The research papers in this collection provide insights into China's economic transformation and propose reforms to support its development. [Extracted from the article]

Employing the Modern Monetary Theory (MMT), this paper examines the current Chinese fiscal system and highlights its three characteristics. First, fiscal revenues are centralized at the central government while expenditures are decentralized at the local governments; second, fiscal spending focuses on public investment but is insufficient in providing social safety net and public services; and third, indirect tax accounts for a great majority of tax revenues, leading to limited progressivity of the tax system. These limitations have constrained the effectiveness of China's fiscal policies and generated many perverse impacts. With the understanding that the central government has the monetary sovereignty and does not face financing constrained and that taxes are not to raise revenues for fiscal spending but to serve other purposes, the paper calls for fiscal reforms that realign fiscal resources and spending responsibilities between the central and local governments, increase fiscal spending on social security and public services, as well as broaden personal income tax to improve the distributive effect of taxation. [ABSTRACT FROM AUTHOR]

This paper examines the impact of structural distortions on resource allocation among industries, regions (provinces), and ownerships in China, using data from 2003 to 2019. This paper innovatively develops an empirical model to measure multi-dimensional structural distortions and assesses the resource misallocation degrees regarding industries, regions, and ownerships. The results indicate that China's most serious resource misallocation is related to industries, followed by regions and ownerships, and the most severe capital misallocation is associated with ownership, and labor misallocation exists in industries. The present study contributes to the literature by creating an innovative two-layer empirical model to address the limitations of Hsieh and Klenow's model. The findings have identified which group (industry, region, and ownership) is excessive or insufficient in resource usage, and the results have profound policy and practical implications. [ABSTRACT FROM AUTHOR]

This paper examines the relative influence of the volatilities of Chinese and American trade with Africa, by exploring the volatilities, their comovements, and four potential international drivers that can increase or decrease the volatilities. The drivers considered are Euro Area's trade with Africa; U.S. recessions; economic globalization; and fluctuations in China's economy. The paper employs the dynamic conditional correlation (DCC-) generalized autoregressive conditional heteroscedasticity (GARCH) model and monthly data spanning 1970M1 to 2020M07. The results show that, without controlling for drivers, the volatilities of Chinese and American trade with Africa are quite high, with similar magnitudes and significant comovements. When drivers are controlled for, Euro Area's trade does not influence the volatilities significantly. However, America's recessions make Chinese trade volatility to become higher, while economic globalization makes it to become lower, relative to America's trade volatility. These results imply that Chinese trade volatility is more influential than America's trade volatility, due to two international drivers. Furthermore, fluctuations in China's economy significantly influence the trade volatility of China itself and the trade volatility of the bigger economy, the U.S., which confirms China's significant international influence. One of the key policy implications of these findings is that globalization does not necessarily increase trade volatility in all contexts. This paper provides new evidence that in the context of a single trade market, globalization is an antidote of trade volatility because it involves the availability of diverse markets across the global economy, which consequently reduces the panic of traders within the single market. [ABSTRACT FROM AUTHOR]

The past two years have witnessed escalating geopolitical tensions occurring not only in the political but also economic domains especially technology and global supply chains, infrastructure connectivity, trade and finance. With tensions between the US and China escalating on many fronts, Southeast Asia has become a focal point of strategic rivalry again as Biden's Indo-Pacific Strategy 2022 attempts to rebuild the US-led order in Asia to blunt China's growing influence in the region. A series of economic initiatives following his Indo-Pacific strategy focuses on reconfiguring the semiconductor global supply chain. In this context, the paper aims to examine how Malaysia cope with the complex patterns of cooperation, competition and conflict arising from the current shifts in the global geopolitics and geoeconomics. The paper benefits from the insights from the international political economy research which explores how the Malaysian government strives to reconcile domestic and international imperatives in navigating the changing global geopolitical economy, which can be perceived as both a threat as well as an opportunity by the state and non-state actors in the country. The question of whether hedging is tenable is undoubtedly contingent upon the extent of big power rivalry. Given the greater uncertainty over the pernicious effects of rising regional polarization and retreat from economic globalization, Malaysia will continue to maintain strategic ambiguity as long as US-China rivalry has not (yet) escalated into outright military conflict. Nevertheless, the paper concludes that the space to hedge may be squeezed since small power like Malaysia may face harsher realities as it navigates the changing geopolitical economy landscape. Hence, the ASEAN solidarity and cohesion is crucial to ensure a more unified regional response to the escalating Sino-American strategic competition. [ABSTRACT FROM AUTHOR]

This paper examines the determinants of services trade in China with a panel of 42 trading partners during the period of 2000–2014. Using augmented Gravity model, the estimated results from Poisson Pseudo Maximum Likelihood (PPML) show that the sectoral output of China and its trading partners, sharing of common borders, fixed telephone subscription in China, exchange rate, perception of lower corruption in partner countries contribute positively to services trade between China and its trading partners. On the contrary but not surprisingly, trade restrictiveness and distance between capitals of China and its trading partners are negatively associated with services trade between China and its counterparts. Greater availability and adoption of information and communication technology in partner countries, proxied by fixed telephone subscription, appear to have a negative (positive) effect on China's services exports (imports). On the policy front, this paper suggests that the Chinese government should devise policies to deal with non-tariff trade restrictions and improve the country's telecommunication infrastructure to address the services trade gaps with its trading partners. [ABSTRACT FROM AUTHOR]

Despite considerable reforms of Chinese monetary policy, very few papers have empirically examined the long-run effects of monetary policy on China's economic growth. Our purpose is to shed some light on it. We use money supply, real effective exchange rate, and real interest rate to describe monetary policy of China. We first apply the Granger causality test to annual data from 1980 to 2020 to examine the relationship between monetary policy and China's economic growth measured by Chinese real GDP. Our results suggest both money supply and real effective exchange rate Ganger cause Chinese real GDP, while real interest does not. We then adopt the autoregressive distributed lag (ARDL) model without asymmetric effects and nonlinear ARDL with asymmetric effects of exchange rate to estimate the impact of monetary policy on China's economic growth. Our long-run results indicate that expansion of money supply would promote Chinese real GDP growth. Both higher interest rate and depreciation would hinder China's economic growth. There are asymmetric effects of exchange rate on growth. Finally, the CUSUM and CUSUMQ stability test results reveal that the relationship among money supply, real effective exchange rate, and real interest rate with Chinese real GDP is stable. [ABSTRACT FROM AUTHOR]

Multilateral organizations are taking attention toward foreign divestment; they are in practice to shift toward a large number of host countries from their home countries. In this paper, the significant role of FDI divestment in the development of the economy has been discussed. The role and contribution of FDI divestment in emerging economies have been discussed. The study employs qualitative descriptive analysis to address the determinants of FDI divestment operated by the emerging economies specifically in China. The study is based on economic reports, official documents, and data directly related to the subject of the study. The role and contribution of FDI divestment to develop a strong corporate sector are elaborated in this paper. Furthermore, the role of FDI divestment in reforming organizations and their sustainable growth with the support of evidence has been discussed. Issues regarding FDI divestment faced by different stakeholders have been explained in this research. Inflows and outflows of FDI divestment with cause and effect have been discussed in this paper. Additionally, this study examined the role of multilateral organizations to convince emerging economies by improving their divestment approach. In global strategy formulation FDI divestment consider as a significant aspect. It is observed, that this aspect of the strategy is still untouched in the field of international business and business academies. This study is specifically in the context of China with under consideration of other developed economies. This study investigates the encouraging factors for growing economies to formulate their divestment policies. [ABSTRACT FROM AUTHOR]

The improvement of industrial Total Factor Productivity (TFP) is the basis for the high-quality development of China's economy. Sci-tech finance affects industrial TFP through screening and allocation mechanism, governance mechanism, and integration mechanism. Based on provincial panel data from 2009 to 2016, this paper constructs a comprehensive index of regional Sci-tech finance and explores the impact of Sci-tech finance on industrial TFP from two perspectives: differences in financial development levels and transmission paths. The results show that Sci-tech finance has a significant role in promoting the industrial TFP, but this promotion needs to meet certain financial development conditions. In high-level financial development areas, the promotion effect is significant. It is not linear. The effect is a threshold effect with the diminishing marginal efficiency. Sci-tech finance mainly promotes industrial TFP through boosting the industry's scientific and technological innovation capacity. Policies and channels of Sci-tech finance to support science and technology innovation are put forward. [ABSTRACT FROM AUTHOR]

This paper analyzes the crowding-out effect of firms' environmental, social, and governance (ESG) activities, arguing that ESG rating convergence among firms makes investors hesitant, driving down economic and social welfare growth. This is yet another adverse consequence of overcompetition in ESG practices in addition to greenwashing. We first build a model to show that, although ESG incentive policies can improve social welfare in the short run, they may reverse long-term social welfare growth, resulting in an ESG-paradox situation. Empirically, we use various proxies of provincial social welfare and the distribution of ESG score changes for China's A-share companies and detect a significantly reduced impact on the social welfare growth of a Chinese province by either a lower standard deviation or skewness of annual ESG score growth calculated for all firms registered within that province. Overall, our findings reveal the complexity of formulating ESG incentive policies and suggest that firms should strike a strategic balance between their business operations and social responsibility when determining their optimal ESG input level. [ABSTRACT FROM AUTHOR]

Since the United States and China established diplomatic relations, this relationship has been encountered many difficulties; for example, the 1989 Tiananmen Square Incident, the 1999 US-led NATO bombing of the Chinese Embassy in Belgrade, the 2001 US-China aircraft collision in China's Hainan Island, and China's 15-year World Trade Organization accession negotiation process and its disputes later with the United States under the WTO, etc. Needless to say, the two great powers also have serious debates and arguments on the Taiwan issue. Under this long-term US-China strategic competition and conflict, Southeast Asian countries therefore have their views and considerations. They smartly have cooperated with China on trade and economic issues while are eagerly or kind of faithfully inclined toward the United States on political and militarily issues. This paper therefore wants to review first the neorealist assumptions on great powers' relations, and then examine US-China strategic competition and rivalry in the Pacific. Also, it introduces Singapore's domestic politics and foreign policy as well as its strategic hedging considerations and choices under US-China power rivalry and make a conclusion. [ABSTRACT FROM AUTHOR]

The Chinese pharmaceutical industry has seen rapid development, with industrial mergers and acquisitions (M&As) increasing over the recent years. However, the studies focused on the characteristics and identified limited impacts of these M&As. This paper then intends to fill the gap by analyzing 393 completed M&As deals in China's pharmaceutical industry from 2004 to 2016 concerning 54 firms. This paper found that: (1) firms' innovation performance is higher when the industrial M&As activities are intensive. (2) M&As activity improves firms' innovation output while overly frequent M&As exert negative effects on innovation output. Stock payment is negatively associated with firms' innovation output. (3) Firms' innovation performance is statistically different between state-owned enterprises (SOEs) and non-SOEs. Firms' innovation performance does not vary whether the acquisition was conducted by SOEs or non-SOEs. Apart from providing empirical evidence, this paper, in turn, proposes policy implications for further innovation development in the Chinese pharmaceutical industry. [ABSTRACT FROM AUTHOR]

With rapid industrialization and urbanization in China, a large rural population has migrated to cities and left their rural homestead land (RHL) idled. Land use policy on RHL utilization is crucial to the efficient use of land resources. However, due to farmers' limited knowledge of regulations and lack of participation in rural land governance, their preference is sometimes overlooked in the policy-making process. The purpose of this paper is to examine farmers' preferences for the two primary RHL utilization programs, i.e., transfer and surrender. We conducted a farmer household survey of 405 households in rural areas in Changchun at Jilin Province, China in 2018 and estimated farmers' willingness to participate in the mechanisms using a bivariate ordered probit model. Various options under the two mechanisms are also investigated. We find a positive correlation between rural households' willingness to participate in these two mechanisms. This is the first comprehensive study taking into consideration the correlation and tradeoff in farmers' choice between the two mechanisms. The results shed light on the heterogeneity of households' needs and interests in RHL utilization, an important component to be considered in rural development policy-making decisions. [ABSTRACT FROM AUTHOR]

PAPER SUBMISSION INSTRUCTIONS: Submissions to the special issue will be handled by email. Please include a separate title page file with the title, names of the authors, their affiliations, and contact author's email, and be sure not to reveal author information in the manuscript file. B I The Chinese Economy i b is a bimonthly publication that offers an objective and analytical account of economic issues concerning China. [Extracted from the article]

An introduction is presented in which the editor discusses various reports within the issue on topics including rural cooperatives in China, environmental social responsibility and rural development in the country.

The study aims to investigate the impact of China's outward foreign investment (OFDI) in Cambodia, Laos, Myanmar, Vietnam, and Thailand (CLMVT). The motivation behind this paper is to examine a pivotal role in determining the macroeconomic factors in these five hosting countries as the "neighboring model" of China. Using panel data for China's outward to her five neighboring countries in the Greater Mekong Subregion (GMS) for the period 2007–2019. This paper uses two different panel specifications models named correlation from classical statistics and Bayesian statistics where empirical results of this research qualify that China's OFDI is the main factor to have a positive influence on the macroeconomic factors in CLMVT. The GMS region is currently challenging the general FDI theory from the "neighboring model" of China's going global" strategy using OFDI as a pioneer for success for the small developing country namely, CLMVT. Many studies showed that the implementation of the "Belt and Road" strategy will help China increase investment in countries along the route, which will further promote the implementation of the "on going" strategy since 2013. We use panel data for China's outward to her five neighboring countries in the Greater Mekong Subregion (GMS) for the period 2007–2019, measures the potential of China's outward foreign direct investment by using two different panel specifications models named correlation from classical statistics and Bayesian statistics. This research implements the core concept of Bayes' theorem. This theorem allows us to use a priori beliefs of probability to combine with evidence that it can be found (update every economic situation in CLMVT countries) then this method will have a new prediction of the posterior probability distribution. The posterior probability distribution will be received from the simulation algorithm once again. It would be calculated from the scope of every scenario that can be happening based on our belief in the future. The Bayesian correlation testing still confirms that the FDI inflow from China per GDP of CLMVT countries has the most play important role to drive the macroeconomic of these five countries' economy. [ABSTRACT FROM AUTHOR]

This paper examines artificial intelligence (AI) and sustainable development in China. The Chinese government has developed ambitious policies for global leadership in the field of AI and sustainable development. While China has made progress in several areas of Sustainable Development Goals (SDGs), it is lagging behind in achieving the SDGs overall, and AI technologies can bolster its progress toward SDGs. Using the latest data of 193 countries around the world, the paper also analyzes the implication of AI on sustainable development both at the global and regional levels. Broadly, a strong positive relationship between the government AI readiness and progress toward SDGs is observed. When classifying the SDGs into four dimensions including economy, society, environment, and partnerships, government AI readiness is found to have a strong relationship with economy followed by the society dimension, whereas there are no clear relationships with the environment and partnerships dimensions. To fully harness and scale the power of AI to meet the SDGs, the Chinese policy maker should align the potential AI technologies to address its SDGs gap, and identify the priority or targeted areas and design appropriate business models and incentive structures for scaling viable solutions. AI technologies, when implemented strategically and properly, can accelerate China's progress toward SDGs. [ABSTRACT FROM AUTHOR]

Sustainable and robust infrastructure plays a critical role in a country's economic growth and improving living standards. Public private partnership (PPP) is an efficient tool for financing infrastructure. PPP has gained attention globally as a way to access capital markets and enhance the implementation of infrastructure by boosting private sector participation. The higher efficiency and innovative technology that the private sector brings can fundamentally improve the performance of PPP infrastructure projects from an environmental, social, and governance (ESG) perspective. This paper extends the existing literature on China's experience in developing asset-backed securitization (ABS) of PPP projects. It aims to understand how ABS would encourage PPP investments through greater private sector involvement in infrastructure projects in developing countries. Conducting a qualitative case study in China, the paper elaborates on how ABS can facilitate the implementation of PPP for infrastructure in order to achieve sustainable economic development in China. It also analyzes the existing challenges in the implementation of PPP asset-backed securitization (PPP-ABS) and provides policy recommendations. [ABSTRACT FROM AUTHOR]

This paper explores hedging in a theoretical thinking and applies it to the foreign policy of India in an era of growing USA–China power rivalry. In this regard, hedging is defined as insurance seeking strategy under situations with high uncertainty, where rational actors (both middle and small states) will try to avoid taking sides and to pursue room for autonomy in decision-making. While Washington and Beijing dislike middle and small countries' hedging, they both overlook that it is the uncertainties stemming from their own behaviors that push middle and small states to hedge. As uncertainties deepen, most countries in Indo-Pacific region will prefer to use hedging policies to reduce their possible losses. For India, unless USA–China rivalry escalates into a direct military conflict, or unless Washington retreats its commitment to regional security in Indo-Pacific, then India will stop hedging and moving to bandwagoning with China; or if Beijing's actions directly undermine India's vital interests in security, then India's hedging will be replaced by balancing against China. In short, hedging is a passive response, not an active choice; India's hedging strategy is very likely to persist on making ambiguities in the USA–China–India strategic triangle and entanglement. [ABSTRACT FROM AUTHOR]

After eight years of back-and-forth negotiations, the Regional Comprehensive Economic Partnership (RCEP) agreement, was signed in the end of 2020. This mega trade deal is a potential free trade agreement that originally poses challenges for the Trans-Pacific Partnership (TPP) led by US, because a rising China with its economic influence in regional trade threatens the current US hegemony, alienates countries in East Asia from the US, and likely strive to become the leader of RCEP. However, these diplomatic strategies are not truly in line with China's long-term interests; on the contrary, this paper argues that China should use the platform of RCEP to act as a supporter and promoter. Playing the roles of supporter and promoter is surely wise since it assists the neighboring countries to make economic advantages with China in a more liberalized regional market, while pragmatically reminding the leaders in Beijing that China should address the South China Sea problem with ASEAN countries in a defensive manner. All these relative low profile strategies, based on 'one political step back for two economic steps forward,' may consider as Chinese approach or Chinese way in RCEP. [ABSTRACT FROM AUTHOR]

Established in 1989 as an economic forum, APEC has become an important regional organization contributing to the promotion of not only economic but also political and security cooperation among countries and territories in the region. Given the great role of APEC, China has actively participated in the forum and today has become a major player with so-called Chinese approaches. The paper points out China's purposes and intentions with Chinese way, especially under the attack of Covid-19 that has led to strategic adjustments in APEC. Politically, with APEC as an arena, China aims to restore and expand its sphere of influence in the region, hedge against the US and challenge to change the global governance system. Economically, through APEC's mechanism, China wants to promote trade liberalization and hence facilitate its domestic economic reforms to soon become the number one power in the world. Moreover, the paper also outlines opportunities and challenges that China would face in APEC. It will also concern China's advantages and barricades on its political regime as a powerful central authoritarian state, China's role and position in the dynamic economic region, its trade and territorial disputes with neighboring countries in APEC, and the questions of APEC's effectiveness. [ABSTRACT FROM AUTHOR]

The Belt and Road Initiative (BRI − also known as One Belt One Road (OBOR)−is undoubtedly one of People's Republic of China's (PRC) largest yet most controversial development program of its kind worldwide. In the light of the controversy, the paper aims to study Malaysia's perception and strategy toward China's BRI expansion since the Najib's administration. Based on the political economy analysis of Malaysia's response from Najib to Mahathir 2.0 administrations, the paper focuses on the interaction between state and non-state actors such as the corporations, political parties and non-government organizations (NGOs). Particular attention will be given to the question of what accounts for the continuity or change in Malaysia's perception and strategy toward China's BRI expansion during the two different administrations. Given the institutional setting that gives rise to concentration of political and economic power in the hand of prime minister in Malaysia, its leadership plays a vital role in shaping the outcome of China's BRI expansion in the country. [ABSTRACT FROM AUTHOR]

Since the Circular Economy Promotion Law of People's Republic of China came into force in 2009, the concept of circular economy (CE) has gained a rising attention from governments and researchers. Policy makers, companies and researchers have started to establish different sets of principles and strategies for adoption. This paper introduces the CE within China's economy background and reviews the drivers to adopt and facilitate its CE. It integrates several current CE practices in China and conducts an analysis on the recycling rate from the government official reports that show China has made some progress in recycling industrial tangible waste and major renewable resources such as iron and steel with remaining challenges and barriers. Further analysis suggests that China requires a more systematic approach to promote CE by individuals, organizations and the nation. [ABSTRACT FROM AUTHOR]

Earlier studies have focused on how education investment affects economic growth in different countries, namely developed and developing countries. The conclusions have been ambiguous and one of the dominant factors leading to such variation is the omission of financial development indicators. The present paper makes use of panel date from 2005 to 2019 on 31 provinces of China to examine how financial development can influence the relationship between education investment and economic growth. The findings show that financial development does not facilitate the impact of education investment on economic growth in wealthier regions. However, for poorer provinces with GDP per capita below the average, financial development as proxied by the ratio of total loans and total deposits in the financial system to GDP, respectively, can indeed enhance the effect of education investment on economic growth. Such enhancement is valid even when the proxies for education investment and financial development respectively pose negative effect on economic growth. Credit expansion and savings increase may facilitate government expenditure in education, which in turn promotes economic growth in relatively poor provinces to a greater degree than does the relatively wealthy provinces. Financial development strategy should be targeted to poorer provinces with below-average economic growth to facilitate growth-promoting educational financing. [ABSTRACT FROM AUTHOR]

This paper identifies the ripple effects of house prices of China's key three regions including first tier 5 cities (LOG(ALL5)), second tier top 8 cities (LOG(ALL8)) and second tier 16 cities (LOG(ALL16)) for 2010Q1 to 2019Q2 periods, together with the impulses from fixed assets investments toward China three key regions' house prices covering period from 2010Q1 to 2019Q2. The empirical analysis is conducted using the robust econometric multiple frameworks, undertaken the forms of principal component method (PC), VAR and Generalized Impulse Response (GIR) techniques. Over the 20 quarters tested, strong evidences of ripple effects were found from Q1 to Q10. Stronger positive ripple effects were identified between two regions of second tier cities (LOG(ALL16) and LOG(ALL8)) versus first tier region (LOG(ALL5)) and second tier regions (LOG(ALL16) and LOG(ALL8)). This result suggests the first-tier cities in China have become less attractive to households and investors whereas second tier cities became more attractive due to their pristine nature and improved infrastructure. Furthermore, over the 20 quarters tested, a negative response was noticed on house price return of LOG(ALL5) toward LOG(FAINVEST) while house price returns of LOG(ALL8) and LOG(ALL16) toward impulses from LOG(FAINVEST) are positive. The result confirms our finding of stronger ripple effects of two regions of second tier cities due to improved infrastructure from fixed asset investments. This paper also assists readers who are interested in investing in China real estate markets. Policy makers could reference this research to set feasible housing policy with the aim to better housing market stability. [ABSTRACT FROM AUTHOR]

A key challenge facing most developing economies today is how to simultaneously maintain monetary independence, exchange rate stability, and financial integration, subject to the constraints imposed by the impossible trinity. In this paper, we contribute to the literature by examining and comparing alternative macroeconomic policy choices for a developing economy with growth shocks. To that end, we introduce a three-sector "almost small" open economy macroeconomic model, and calibrate this model to proxy the China in 2005 when it made the transition from being an economy that was bounded by the impossible trinity. We design two alternative macroeconomic policy regimes and apply the calibrated model to analyze both the short-run and the long-run responses to several domestic and external growth shocks, which appeared important for a developing economy like China during its economic reform period in the 2000s. The model simulation shows that most growth shocks cause an expansion in the real GDP level. Moreover, greater flexibility in the exchange rate allows the central bank to conduct independent monetary policy, the benefit from which increases as financial capital becomes more internationally mobile. Our findings draw policy implication for those developing countries considering alternative macroeconomic policy regimes to achieve sustainable economic growth. [ABSTRACT FROM AUTHOR]

Migrant workers are an important component of China's labor market, playing a vital role in economic development and social stability. In the face of significant health risks related to their work, migrant workers remain largely under-represented in China's health insurance system despite their eligibility to participate in several programs. To achieve China's goal of universal healthcare coverage, migrant workers are targeting populations. The objective of this paper is to understand the factors associated with migrant workers' participation in health insurance programs. This analysis draws from a survey of 3,342 migrant workers that was conducted by China Agricultural University in 2013. A multinomial logit model was performed to identify the determinants of migrant workers' health insurance participation. Our findings suggest that the highest rates of un-insurance were observed for females, the elderly, those with lower levels of education, income, or lower self-reported health status, and migrant workers in the construction industry. They are the most vulnerable populations and susceptible to various health and occupational hazards. Besides the high enrollment rates of migrant workers in the New Rural Cooperative Medical Scheme, the scheme's lack of portability needs a complete "Inter-province" balancing reimbursement networking platform to be built. Furthermore, establishing a multi-level medical security system that is accessible and affordable may serve the goal of improving health insurance participation among migrant workers. [ABSTRACT FROM AUTHOR]

The Shanghai Cooperation Organization (SCO) has become the most important vehicle for Chinese cooperation with Central Asian member states and Russia. China seeks to play an active role and exert strong influence in the SCO for both economic reasons and strategic considerations. China aims to resolve territorial and border issues with Central Asian states, maintain stability in Xinjiang, develop the economy of western areas, and ensure energy security by playing a leading role in the SCO. Analyzing China's role in the SCO and the related opportunities and challenges is the primary goal of this paper. The Chinese government uses economic cooperation to exert influence within the SCO. However, the Chinese government must still overcome numerous challenges, including reconciling mistrust and conflict among SCO member states, reducing Russian suspicion of Chinese intention, response to transformation of the SCO, and dilemmas regarding regional instability. [ABSTRACT FROM AUTHOR]

Industrial policy (IP) toward technology innovation (TI) is a focus of the US trade war against China. The US is forcing China to stop IP uses in promoting TI that directly threaten the US technology leaders, like its reaction to China's plan of "Made in China 2025". Does China have too many IP? Does the US use IP? What TI patterns affect IP? This paper develops the following points as conclusions: (a) Due to market failures, all countries implement IP in their economic development; (b) original innovation (OI) involves a lot of risks and uncertainties such that entrepreneurship rather than government plays a key role, while imitation innovation (II) is much less risky and uncertain so that more rooms are left for IP; (c) technology-leading countries like the US has to conduct OI to maintain their advantages, and catching-up countries like China do more II, thus more IP are adopted in China than the US; and (d) the US engaged substantially IP in the history and is deploying various IP to meet challenges from China; and (e) economic and political institutions matter. [ABSTRACT FROM AUTHOR]

Inspired by China's historical role as a central hub in the Silk Road, the Chinese government officially launched the Belt and Road Initiative (BRI) in 2013. The BRI aims at deepening regional economic cooperation on a transcontinental scale and investing in infrastructure that promotes regional connectivity over land and sea. In recent years, China's outward foreign direct investment (OFDI) has increased tremendously. Empirical evidence suggests that Chinese OFDI is about 40 percent higher in BRI countries than non-BRI countries. Under the BRI framework, China is currently a global leader in the construction of transportation infrastructure. In this paper, we examine the case of the China-Indochina Peninsula Economic Corridor (CIPEC) and investigate the macroeconomic implication of the BRI by conducting empirical study on Chinese OFDI to the CIPEC, analyzing China's infrastructure investment, and conducting case studies of BRI infrastructure projects in the region. Our findings draw implication for policymakers in BRI nations who intend to attract Chinese infrastructure investment to improve regional connectivity. The lessons learned from these BRI projects highlight the importance of institutional relationship, domestic politics, political stability, and policy uncertainty, which in turn shed light on future infrastructure projects between China and host countries under the BRI framework. [ABSTRACT FROM AUTHOR]

The Northeast region has struggled to restructure and modernize its economy during China's transformation into a global power, missing the opportunity to benefit from foreign trade and investment. This paper explores the trade patterns of the region's three provinces vis-à-vis their main trading partners over the period 1992-2018. In particular, we quantify the barriers to trade employing a gravity model specification and trace changes across time and regions. Furthermore, we use a stochastic frontier approach to calculate a measure of the trade potential that serves as a benchmark in assessing the trade performance of Northeast China's provinces. The results show that the region exhibits high trade costs that amount to ad-valorem tariffs ranging between 75% and 100%. The analysis also indicates that the region's trade performance is only 40% to 55% of its potential level. The relatively high levels of inefficiency extend even to trade with the rest of China and have increased over time. [ABSTRACT FROM AUTHOR]

Our goal in this paper is to assess short-run and long-run effects of the real yuan-pound rate volatility on the U.K. exports to China and Chinese exports to the U.K. When a linear export model was estimated for each of the 70 industries, we found short-run effects on 43 (53) British (Chinese) exporting industries to China (the U.K.) and which lasted into the long run in 17 (28) British (Chinese) industries. However, when a nonlinear model was estimated, we found short-run asymmetric effects on 58 (67) British (Chinese) exporting industries that lasted into the long in 42 (52) British (Chinese) industries, mostly in an asymmetric manner. Our findings were industry specific but in general, while increased exchange rate volatility hurt British export to China in most industries, it actually boosted Chinese exports to the U.K., in most industries. On the other hand, decreased volatility boosted exports of some British industries, but it hurt exports of some Chinese exporting industries. [ABSTRACT FROM AUTHOR]

The pet industry has grown tremendously in China, and pet food is a major product in the market. Although characteristics of pet food are important considerations for veterinarians and consumers, there has yet to be a holistic consumer study for Chinese pet food shopping behaviors. This study focuses on consumer stated preferences of online pet food and factors affecting their actual purchasing behavior. We have conducted a survey and explored factors affecting both consumers' stated attribute preferences and factors affecting their consumption quantities. A total of 220 valid samples were collected online from pet owners with online shopping experiences in 2019. Our results reveal that younger, urban, higher educated, and married consumers with families tend to use more online channels to buy pet food. They care more about brand, ingredients, and retailer reputation, but not so much about imported products. We find little significant statistic difference between consumers' online and offline shopping perspectives. This paper quantitatively investigates consumer pet food shopping behaviors, discovers recent trends in this line of research, and provides insight into the industry for future developing demand. [ABSTRACT FROM AUTHOR]

This paper investigates why China is able to achieve a high level of technological sophistication in its exports beyond its current level of development. It concludes that a great portion of the high-tech exports are of the processing and assembly type and produced by foreign-invested enterprises. China's comparative advantage of labor abundance and the Chinese government's foreign direct investment (FDI) policy have encouraged the expansion of FDI-led export in general and FDI-led processing trade in particular. Given the disadvantages of the FDI-led export expansion, reform of the government's FDI and trade policies is needed to improve technological development and to enhance China's production and trade structures. [ABSTRACT FROM AUTHOR]

Over the past decade, ESG investment has become an important criterion for the Chinese economic activities, including its capital market where ESG integration in asset management has become a hot topic among investment professionals. In this paper, we study the case of ESG investing in China through examining the performance of equity indices that are selected by an ESG screening process and comparing their main risk-return characteristics against those of conventional equity market benchmark indices, in order to provide further understanding on how ESG plays a role in China's capital market. Specifically, we address three key issues that are of particular concerns to most investors: (i) Can equity indices based on ESG screening outperform their market benchmarks? (ii) Can ESG equity indices be replicated by reference indices? and (iii) Can ESG equity indices improve portfolio diversification? Overall, we find that investing in ESG equity indices can increase risk-adjusted returns and improve portfolio diversification for the case of China. [ABSTRACT FROM AUTHOR]

After the political transition of Myanmar in 2011, Myanmar toward China's engagement strategy has led the changes from the state-to-state relations into the multi-layered relations and even into open domestic and foreign connection. Myanmar's foreign policy has also challenged the Beijing's economic and political interests in Myanmar in terms of major economic projects such as the case of Myanmar's Government one-sided suspension for Myit Sone Dam projects in Kachin State, Kyauk Phyu Deep Sea Port, New Yangon Development Project, and Special Economic Zones (SEZs) projects along the China-Myanmar Border. In this sense, it could be interesting to find the Myanmar's hedging policy on China's engagement and China's responses to Myanmar's development. Moreover, Myanmar has agreed the China-Myanmar Economic Corridor (CMEC) which is strategically important for China's Belt and Road Initiative (BRI). Among the various China's BRI projects in Myanmar, every case has the different characteristic, pattern, and situation, in terms of the different fundamental interaction relations among the state, market and society. Thus, this research paper seeks the three unique cases of BRI projects in Myanmar from the political economic hedging framework via the state-market-society perspective, such as the Kyauk Phyu Deep Sea Port Project (currently running), Myit Sone Done Projects (currently suspending), and the New Yangon Development Project (still negotiating). Three major projects in Myanmar stand for three different patterns of Myanmar's state-market-society relations and their general hedging considerations. [ABSTRACT FROM AUTHOR]

Empirical evidence demonstrates that market-driven carbon trading scheme (ETS) is a crucial instrument for China to control environmental pollution. Based on the panel data of China's 283 prefecture-level cities from 2006 to 2017, this research investigated the transmission mechanism, direct and indirect effects of ETS on carbon emission intensity (CEI) using difference-in-differences (DID) model, propensity-score-matched difference-in-differences (PSM-DID) model at national, regional, and local levels (cities with different industrial characteristics). The results demonstrated the mediating effects of total energy consumption, energy consumption structure, and industrial structure upgrading in the incentive role of ETS on CEI reduction. Moreover, ETS directly and effectively reduced CEI at the national level, while the spatial heterogenous effects were identified at regional and local levels, which emphasises the necessity and importance of unified carbon trading market establishment and classified governance. [ABSTRACT FROM AUTHOR]

Online shopping has becomes more and more popular in China largely due to the convenience and competitive prices of online products and services. This paper discusses fours issues related to online shopping. Using data from the Chinese Household Financial Survey 2013 and 2015, we find that online shopping is a more common practice for higher income earners, youngsters, women, married couples, better educated citizens, urban residents, and smartphone users. Online consumption is affected by similar factors. We observe the concavity of income on household total consumption and money savings due to online shopping. We conclude that online shopping improves the income efficiency on household total consumption. Using smartphones does not promote total consumption, although it increases online consumption. [ABSTRACT FROM AUTHOR]

The traditional theory of money creation and supply has been widely questioned and criticized after the Global Financial Crisis in 2008. The existing empirical research on China's money supply has been basically based on this traditional theoretical framework of "monetary base-money multiplier," and ignored the important role of government finance in money creation. From the perspective of MMT, this paper investigates the evolution of the role of fiscal policy in China's money creation, and analyzes the macroeconomic impact of the fiscal creation of money. In the past 70 years, China has experienced a planned economy regime, a fiscal dominance regime and a monetary dominance regime. And during this time the dominant mode of money creation has gradually shifted from fiscal creation to credit creation, to the extent that the old fiscal creation mode has been ignored or even disdained. However, the fiscal creation of money is still of great importance. Compared with credit creation, it helps to promote the development of real economy, reduce systemic financial risks and narrow the wealth gap. This article argues that China should increase the contribution of fiscal expansion to money creation and reduce the dependence of money growth on credit, so as to better achieve the three goals of stable growth, risk prevention and structural adjustment. [ABSTRACT FROM AUTHOR]

Local government debt played a vital role in China's urbanization. But its influence on the new urbanization is not clear. Based on the definition of new urbanization, the paper focuses on the characteristics of local government debt and whether local government debt can meet the needs of new urbanization. The empirical research shows that local government debt promotes the urbanization rate, infrastructure supply and public products supply. But it is not conducive to the increase of urban residents' income, which is the important component of new urbanization. The influence of local government debt on new urbanization is different at different stages of new urbanization. The suggestion is that local government should use local government debt, private capital and foreign capital reasonably considering regional and development stage characteristics, instead of debt only to accelerate the development of new urbanization. [ABSTRACT FROM AUTHOR]

The Belt Road Initiative (BRI) is a global development plan that sets out to invest trillions of dollars in infrastructure within the coming decade in over 60 countries. Financing the BRI has come mainly from the Chinese government funded development banks, commercial banks and investment funds. BRI investment has done primarily in the US dollar, which is not a sovereign currency for the Chinese government. As China's current account surplus narrowed and foreign exchange reserves shrank, the affordability of the BRI becomes questionable. From the Modern Money Theory's perspective, it is much more desirable, or even necessary, to use the Chinese RMB as the main investment vehicle currency. However, despite the RMB internationalization efforts by the Chinese government in the recent years, especially after the 2008 Global Financial Crisis, RMB internationalization is still quite limited. Financing BRI presents a difficult dilemma for China because on the one hand, continuing with dollar investment requires much capital account and exchange rate management, which hinders RMB internationalization; on the other hand, RMB internationalization, which is desirable for BRI investment, requires more liberalization of the capital account and exchange rate regime. Based on the Modern Money Theory, this paper reveals some of the implications of the connections between RMB internationalization and BRI financing. [ABSTRACT FROM AUTHOR]

The article discusses various reports published within the issue, including one by Changwen Zhao and Jiang Du on China's formation of capital and its economic growth, one by Zhongxiu Zhao and Zhi Lv on the chain of global supply and the automobile industry of the country, and one by Chunfa Chen, Kun Li and Yingkai Tang on the significance of venture capital in the mobilization efficiency in the country.

Since the late 1970s, many employees of state-owned enterprises have been laid off, and more and more rural people have migrated to urban areas. Many laid-off and migrant workers have become the urban poor. This paper discusses the general situation of the urban poor in China by examining how many there are, how poor they are, who they are, and what creates their situation. Using data from a January 2007 survey on 1,641 relatively low-income households in Changsha, the paper investigates features of migrant workers and their city counterparts regarding income, employment, social support, housing, most-needed government assistance, and reasons for migration. Based on the empirical findings, the paper gives some policy recommendations. [ABSTRACT FROM AUTHOR]

An introduction is presented in which the editor discusses various reports within the issue including the rising leasing market in China, performance of Chinese hedge funds and the development of equity market in China.

To better help resolve the dilemma of more demand for bank lending and increasing defaulted bank loans, this paper develops a pricing model on SMEs' group lending practice using a gaming method. The optimization method and the game analysis are used to model the dynamical interest rates of group lending in order to maximize the profits for SMEs and to guarantee basic income for commercial banks. A simulated empirical analysis is used to obtain the optimal lending rate and expected profits, and the results provide support for the proposed model. The result of this study provides valuable insights on designing effective incentives to encourage commercial banks to provide funds to SMEs and to encourage SMEs to pay back the loans to commercial banks, and thus is able to help resolve the funding dilemma between commercial banks and small and medium enterprises in China. [ABSTRACT FROM AUTHOR]

This paper examines the effect of institutional herding on future stock returns in China A-share market at both the market and industry level from 2003 to 2012. Using a unique institutional holding database, we test the herding effect at different time horizons. The results suggest that institutional herding has a significantly positive effect on future excess returns for A shares in the short, medium and long periods of time. In China A-share market, institutional herding is more significant on buy side than sell side due to short sell restrictions. At the industry level, manufacturing and construction sectors experience institutional herding effect at all time horizon. Financial industry is found to present significant institutional herding effect only in the long term. The institutional herding has a positive and significant impact on the medium-term and long-term excess stock returns in the rest of ten sectors. [ABSTRACT FROM AUTHOR]

Pakistan's geographical location is ideal for China-Pakistan Economic Corridor (CPEC) Project, and it formally recognizes as an iconic model of Belt and Road Initiative (BRI) plan. This corridor is laid at the cross intersection of three regions of economic growth include: China, Central Asian Republics and South Asia. It plays a vital role of inter-connectivity between these three regions, where three billions of inhabitants live, which is roughly half of the world population. The central argument of the paper is sternly conceptual and based on the subsequent arguments: foremost, the foundation of CPEC project is a green signal for the regional connectivity, mutual cooperation, economic growth and stability of the entire region of South and Central Asia. Secondly, the topographical position of Pakistan has an incredible potential for corridor development and manipulation process. Thirdly, due to the iconic model of belt and road initiative plan, the CPEC corridor has broad potential for regional economic growth because of shared boundaries and cross intersection position with China, CARs and South Asia. Finally, with the copious fruitful opportunities, this project facades somber challenges internally and outwardly. Hence, this study uses a positive-sum logic to analyze central argument and also discusses the policy inputs that may be prolific for regional growth and reforms of the project. [ABSTRACT FROM AUTHOR]

In this exploratory research, we examine the effect of economic and noneconomic indicators on the creation of Chinese Banking and Insurance Regulatory Commission policies using a VAR model. We find that CBIRC policies are predicted by State Council construction policies and policies set by the State Administration of Foreign Exchange. This indicates that the CBIRC is inward-looking, observing what other regulators are doing rather than responding to changes in the real and financial economy. This may be a product of market distortions due to China's unique blend of state-oriented and market-based institutions. [ABSTRACT FROM AUTHOR]

I demonstrate that China is building an Augmented National innovation system or ANIS, with semiconductor industry and AI at the core. There are two dimensions along which China's NIS has been augmented. One is to move toward a more egalitarian innovation system in accordance with the goal of creating a harmonious, moderately prosperous economy and society. And the other is to include the AI and semiconductor base for high technology for the 4th Industrial Revolution. The Chinese ANIS has important regional and geoeconomic implications for the future. [ABSTRACT FROM AUTHOR]