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The paper reviews the World Trade Organization's analysis of developments in China's trade policy during 2012-14. The review overlaps with the continuing Great Recession and with China's determination to foster a sustainable rate of economic growth. Developments in the country's trade policy include the launching of the Shanghai pilot free trade zone. China faces a series of trade policy-related challenges including the complex process necessary to internationalise the renminbi. [ABSTRACT FROM AUTHOR]

China's growth has recently been spectacularly high but there have been expressions of concern about its uneven regional distribution. It has been asserted that this has been partly due to national financial institutions (mainly state-owned banks) redirecting deposits from poor to rich regions and that this will be improved by smaller regionally-focussed institutions. We test these propositions using both informal analysis and more formal econometrics employing recent panel time-series methods. We find that (i) there is no evidence that deposits are siphoned off from the poor provinces for loans in rich provinces; (ii) financial disparities are positively related to output disparities, (iii) the link is stronger for rural credit co-operatives than for state-owned banks and (iv) the relationship is causal in both the long and short runs. [ABSTRACT FROM AUTHOR]

This paper has evaluated the WTO trade policy review, and added more information and recent data to examine more closely China's economy and trade. Major trade policies during 2014-16 were summarised as the Belt and Road Initiative, policies facilitating trade and new adjustments to support and promote cross-border e-commence. After evaluating data on China's trade and economic performance, it discussed three challenges the Chinese government needs to deal with in the near future. [ABSTRACT FROM AUTHOR]

Mobile communications have experienced rapid growth in China and play an increasingly important role in the country's economic development. However, there is still vast regional imbalance in China's communications industry which we will be exploring here, including examining what factors influence diffusion paths and cause these differences. Through a two-step estimate method, this paper successfully describes the differences in the diffusion paths of mobile communications in different regions of China. It evaluates the impacts of industry variables, intra-regional income gaps, macroeconomic factors (such as degree of urbanisation) and geographic effects of neighbouring provinces. Our work may be helpful to inform policymaking for effective and equitable development. [ABSTRACT FROM AUTHOR]

Based on the case of Taizhou City in Zhejiang Province, the present paper investigates the mechanism of the interaction between the local government and private enterprise in the process of regional economic development. We identify the “Taizhou Model” as a model of institutional innovation and the development of private economy, which is private sector-induced and local government-promoted Indeed, the impact of such mechanisms has had a significant influence on the reforms and development of China s economic system. [ABSTRACT FROM AUTHOR]

How much of China’s recent economic performance can be attributed to market-oriented reforms introduced in the last two decades? A long-run perspective may be important for understanding the process of economic development occurring today. This paper compares the integration of rice markets in China today and 270 years ago. In the eighteenth century, transport technology was non-mechanized, but markets were close to being free. We distinguish local harvest and weather from aggregate sources of price variation in a historical sample and in a similarly constructed contemporary sample. Findings indicate the degree of market integration in the 1720s is a very good predictor of per capita income in the 1990s. Moreover, the current pattern of interregional income in China is strongly linked to persistent geographic factors that were already apparent several centuries ago, well before the enactment of modern reform programs. [ABSTRACT FROM AUTHOR]

A popular explanation for China's rapid economic growth in recent years has been the dramatic increase in the number of private domestic- and foreign-owned firms and a decline in the state-owned sector. However, recent evidence suggests that China's state-owned enterprises ( SOEs) are in fact stronger than ever. In this paper, we examine over 78,000 manufacturing firms between 2002 and 2006 to investigate the relationship between ownership structure and the degree of firm-level exposure to export markets and firm-level productivity. Using a conditional stochastic dominance approach, we reveal that although our results largely adhere to prior expectations, the performance of SOEs differs markedly between those that export and those that supply the domestic market only. It appears that China's internationally focused SOEs have become formidable global competitors. [ABSTRACT FROM AUTHOR]

Understanding the facilitating role of regional governments and the source of regional competition is the key to demystifying the success of China's fast economic development since the 1990s. This paper, as the product of the lecture the author delivered at The World Economy China Annual Lecture on 3 November 2011 at University of Nottingham, provides a framework that better illustrates the mechanism that motivates China's economic growth over the past 20 years. It shows that the current growth mechanism in China is largely the result of institutional reforms and fiscal recentralisation that occurred in 1994 under the leadership of Premier Zhu Rongji. Being allowed to have their own source of tax revenue under the new fiscal reform, Chinese regional governments are motivated to pursue the goal of economic growth through fast capital formation and industrialisation. The newly designed intergovernmental fiscal relationship, as the most important reform programme in China, has also helped create a growth incentive that is compatible between central and local governments, and resulted in a Tibout-type regional competition in the sense that inefficient use of resources, including public land, would be substantially eliminated by the strategic behaviour of regional governments being more attractive to external direct investment. Such regional competition makes the regional governments preserve and use the markets rather than replace them, and has generated consistent and powerful development momentum for the post-1994 economy of China. [ABSTRACT FROM AUTHOR]

Using cross-country panel data, this study identifies and discusses major factors contributing to China's strong growth in the past four decades. China's low initial per capita income relative to its own long-run potential, combined with sound policy factors including a high investment rate, strong human capital, high trade openness and improved institutions, enabled the economy to converge with advanced economies in terms of income level. The shift-share analysis with industry-level data shows that strong labour productivity growth in the manufacturing sector largely contributed to China's overall labour productivity growth. Although labour reallocation from agriculture to the services sector made a positive contribution to aggregate labour productivity growth, labour productivity growth in the services sector itself was negative over the 1980-2010 period. China's average potential GDP growth is predicted to decline significantly in the coming decade, to 5%-6% and fall further to 3%-4%-due to the convergence effect and structural problems-unless China substantially upgrades its institutions and policy factors and improves productivity, particularly in its services sector. [ABSTRACT FROM AUTHOR]

The design of China's foreign direct investment ( FDI) and export promotion policies has intrinsic elements not helpful with the original policy intent to generate spillovers to the wide Chinese economy. Applying panel estimation models to Chinese provincial-level data for 1993-2008, we examine the impacts of China's coastal FDI and exports on its inland regions. We find that the coastal FDI has overall positive inter-regional impacts, while the coastal exports do not. Cooperative joint ventures generate positive impacts, but little for wholly foreign-funded enterprises and even negative for equity joint ventures. The inter-regional impacts do not exhibit any significance and robustness across exporters' ownership status. We attribute these counter-intuitive findings to the protectionist behaviours of state-owned enterprises in equity joint ventures and the prevalence of processing exports. [ABSTRACT FROM AUTHOR]

The China (Shanghai) Pilot Free Trade Zone ( SPFTZ) founded one year ago is a trial for China's new round of reform and opening up, which has promised liberalisation on the capital account and trade facilitation as its main objectives. Here, we discuss why China adopted such a pilot zone after three decades of economic development, and explore what the differences are between the SPFTZ and other free trade areas, and developments of the SPFTZ in the past year. We also make a preliminary assessment of the SPFTZ's initial impacts, especially of its impact on China's capital account opening and financial liberalisation. It is possible that the successful practice of the SPFTZ and more pilot policies replicated in China will give rise to a more balanced Chinese economy in the following decade. [ABSTRACT FROM AUTHOR]

Despite high economic growth over the past 30 years, China's substantial and persistent regional disparities have been the subject of continuing concern to policy makers, as well as the target of a wide variety of policies. An important issue in the policy debate about whether and how best to attack these disparities is whether measures designed to improve regional equality come at a cost to national development, i.e., whether there is a trade-off between the level of national output and the equality of its distribution across the regions. There is little analysis of this issue in the literature. We help fill this gap by setting up a two-region model designed to capture some of the salient features of the Chinese economy. We subject this model to a number of policy shocks and assess the effects on regional disparities in per capita output, on the one hand, and on aggregate output on the other to investigate the trade-off. We also consider income and welfare as alternatives to output. We find, first, that disparities in per capita output, income, and welfare may move in different directions so that it is important to specify which disparity is being targeted. Second, since both disparities and aggregate outcomes are endogenous, how they move together depends on the nature of the shock driving the model. Thus, some policies designed to reduce disparities face a trade-off and others do not. Only a reduction in internal migration restrictions unambiguously reduces all three disparity measures and increases aggregate output, income, and welfare. All other policies considered face a trade-off in at least one dimension. Third, whether there is a trade-off depends also on the time horizon-some policies face a trade-off in the short run and not in the long run and vice versa. [ABSTRACT FROM AUTHOR]

In recent years, China has experienced two forms of extreme macroeconomic imbalance: an expenditure imbalance in the sense of very high investment and very low consumption, giving rise to rapid capital accumulation; and an imbalance between expenditure and production, producing external imbalance, i.e. a huge surplus on the current account of the balance of payments. Both imbalances imply a low rate of time discount by both government and society: consumption in the present is forgone in favour of consumption in the future. The paper examines how these imbalances came about and goes on to consider whether they can be sustained and how they might be redressed. There is no evidence that the rapid capital accumulation has reduced the rate of profit on capital and thus the incentive to invest. However, persistent external imbalance poses a threat to investment if it generates excess liquidity and asset bubbles. The current account surplus rose remarkably in the years 2004-07. This was associated with exogenous increases in competiveness and in saving, both attributable to the economic reform policies. On current policies, the surplus is likely to rise again once the world economy recovers from its recession. This poses three sorts of problems, each of which is examined in turn: difficulties for macroeconomic stabilisation policies; risk of capital loss on the foreign exchange holdings; and the threat of retaliation by China's trading partners. A combination of internal and external policies will be required to redress the imbalance. [ABSTRACT FROM AUTHOR]

We attempt to explain the China Puzzle, the coexistence of accelerating economic growth, and a worsening growth outlook. The root cause lies in China's unique liberalization approach, that is, the combination of a complete liberalization of product markets and continued distortions in factor markets. Repressed costs of labor, capital, land, and resources artificially raise the profits of production, increase the returns to investment, and improve the international competitiveness of Chinese products. The asymmetric liberalization approach not only promoted economic growth, but also caused structural risks. It also contributed to global imbalances as well as regional integration. Therefore, future reform policies should focus on the liberalization of the factor markets and the elimination of cost distortions. [ABSTRACT FROM AUTHOR]

This paper provides a systematic and comprehensive account of the establishment, reform, and development of China's System of National Accounts, focusing on important changes in concepts and methods in national accounting during China's transition from the Soviet-type Material Product System to the United Nations System of National Accounts, as well as existing problems and challenges that must be faced in the further development of the system. [ABSTRACT FROM AUTHOR]

Developing Asia has benefited greatly from the rise of the People's Republic of China (PRC), primarily through the trade channel. The PRC and its neighbours have collectively formed a regional production network, and the PRC is becoming an increasingly important source of final demand. Two empirical techniques are used to examine the likely economic impact of growth deceleration in the PRC on other Asian economies: (1) a single-equation approach that captures the trade channel; and (2) a global vector autoregressive model that captures the effects beyond the trade channel. The results of both analyses confirm that deceleration in the PRC will have a non-negligible negative effect on other economies, especially on East and Southeast Asian economies. An out-of-sample analysis to tease out the effects of slower growth in the PRC from the recent growth performance of selected Southeast Asian economies suggests that the PRC effect is contributing to the growth dynamics of this region but is not always dominant. [ABSTRACT FROM AUTHOR]

China has a population three times more than all other transition economies combined, and China's economic development in the last two decades has been nothing short of phenomenal, having overtaken Japan as the world's second-largest economy. China's future economic growth, social and political stability will undoubtedly have an unprecedented influence on the order and fiscal stability of the Chinese people. [ABSTRACT FROM AUTHOR]

For more than three decades, China has managed to combine rapid economic growth with a strictly regulated financial sector. The discrepancy between economic and financial development has raised the question of whether China might be an exception to the so-called finance-growth nexus. This study examines the relationship between finance and growth at the provincial level in China using a new set of measures of capital freedom and financial development. The results indicate that capital freedom and financial development are associated with both higher income and growth rates. In particular, we find that the marketisation of financial institutions and strengthening of legal and government institutions have a particularly strong impact on income and growth in low-income provinces. [ABSTRACT FROM AUTHOR]

Empirical research on the determinants of regional economic development typically neglects the influence of culture. This study fills that gap by attempting to establish a causal linkage between culture and economic development in the Chinese context. Our empirical analyses are based on a comprehensive economic statistics of China's provinces and prefectures during 1978 to 2008. We use Protestantism as a proxy for culture because Protestant ethic has been linked to the spirit of capitalism and commercial culture in Weber's famous work. To isolate the exogenous variation in culture measure, historical Protestant dissemination is employed as instruments. The estimation results suggest that Christian commercial culture has a significantly positive impact on economic performance - per capita GDP after other important influences (i.e., capital, population, human resources, institutional quality, trade, infrastructure, geography, etc.) are controlled for. We also find heterogeneous effects of culture on economic development in different regions of China. [ABSTRACT FROM AUTHOR]

ABSTRACT Despite the fact that the last three decades have witnessed the rapid development of rural tourism (RT) in China, which is being promoted by the Chinese government as an important new type of tourism due to its special role in revitalizing China's rural economy, there is still little knowledge about the economic impacts of RT on Chinese rural communities in terms of socio-economic development and regeneration. Accordingly, this study represents an attempt to address this issue by examining the Poverty Alleviation through Tourism program and ' Nong jia le' (Happy Farmer Home) tourism within the Chinese context. The findings not only confirm the widely held importance of RT, as expected, but also identify the problems and challenges relating to the sustainable development of RT in the future. Copyright © 2012 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

The current debate over China's rise and the future of international primacy is polarized between two prevalent views: one foresees China becoming the world's largest economy and taking over the position of international primacy from the United States, whereas the other believes that the Chinese economy will falter as a result of structural imbalances and China will not become a superpower. Both predictions miss the mark. This study argues that notwithstanding the political will to rebalance the economy, China will continue to follow an investment-intensive growth path, and despite the structural imbalances, this path will still be able to lead to Chinese economic primacy. But sheer economic size is not a good indicator of hard power. Using an organic combination of wealth and productivity as an indicator of hard power, the article shows how close the power competition between China and the United States will likely be and that Beijing may not be able to surpass Washington as a superpower. [ABSTRACT FROM AUTHOR]

Land to accommodate urban development in China is provided through requisitions by government officials, suggesting that land availability may be a constraint on urban economic growth. An econometric model of urban GDP growth suggests that land has constrained economic growth in coastal areas but not elsewhere. Elasticities calculated from the estimated coefficients indicate that land availability has a larger proportional impact on economic growth than domestic and foreign investment, labor supply, and government spending. The estimated parameters provide evidence about arbitrage opportunities created by discrepancies between urban land value and compensation for requisitioned rural land, suggesting rural unrest associated with conversion of farmland to urban uses may have some economic roots. [ABSTRACT FROM AUTHOR]

Over the next ten years, China is predicted to become the second-largest economy in the world. China offers foreign companies many wonderful business opportunities. Although a number of these foreign companies have successfully broken into the Chinese marketplace and reaped immense benefits, others have encountered unexpected obstacles, and some have experienced outright failure. Drawing on our international business experience as well as our knowledge of China's business environment derived from consulting and conducting research in China, we offer guidelines for foreigners considering conducting business in China. Specifically, we examine what major changes are having the most impact on how business is conducted in China and suggest strategies for effectively managing these changes. © 2009 Wiley Periodicals, Inc. [ABSTRACT FROM AUTHOR]

Fuelled by high domestic investment and rapid export expansion, China's economy grew by 11.4 percent in 2007, the highest increase since 1994 and the fifth consecutive year of double-digit growth. Such spectacular growth performance is unprecedented in the world s economic history. However, the Chinese Government is again worried about a possible “hard landing” for the economy, as no economy can sustain very strong growth for extremely long period without overheating. Cracks in China s economy are indeed emerging. The consumer price index shot up to 6.9 percent in November 2007, the highest level in a decade, with the annual inflation for 2007 rising to 4.8 percent, well above the governments “comfort level” of 3 percent. This prompted China s top leadership to declare that reducing economic overheating and curbing inflation would be the top policy priorities for 2008. To contain such cost-push inflation, the government has to tackle its root causes, such as excessive liquidity, which is caused by the undervaluation of the renminbi, which in turn is attributable to China s chronic external and internal macroeconomic imbalances. High growth is likely to continue in 2008, at around 10 percent, with inflation of 5–6 percent expected, despite the anticipated tighter macroeconomic control measures and the more troubled external economic environment (e.g. the expected US economic slowdown). Regardless, China s fundamental problems associated with runaway growth will largely remain. In addition, if the US economy slips into a serious recession, the Chinese economy will not be able to decouple from it and escape unscathed. [ABSTRACT FROM AUTHOR]