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on China |
| By: | Bulent Unel; Harm Zebregs |
| Abstract: | China's growth record since the start of its economic reforms in 1978 has been extraordinary. Yet, this impressive performance has been associated with an increasing regional income disparity. We use a recently developed nonparametric approach to analyze the variation in labor productivity growth across China's provinces. This approach imposes less structure on the data than the standard growth accounting framework and allows for a breakdown of labor productivity into capital deepening, efficiency gains, and technological progress. Like other studies before us, we do not find strong evidence of convergence in labor productivity across China's provinces during 1978-98. However, our results show that provinces converged in efficiency levels, while they diverged in capital deepening and technological progress. |
| Keywords: | Economic growth , China , Labor productivity , Data analysis , |
| Date: | 2006–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/55&r=cna |
| By: | Joachim Ahrens; Philipp Mengeringhaus |
| Abstract: | This study introduces a coherent comparative concept of governance, applies it to China, and elaborates to what extent the Chinese institutional matrix exhibits characteristics of a market-enhancing governance structure (MEGS). It is argued that a subtle interplay of political and economic institutions created a stable and viable politico-institutional foundation which made China's unorthodox transition strategy politically feasible and economically effective. The paper concludes with an assessment of the quality of the overall Chinese governance structure and its expected implications for the future transition process. |
| JEL: | H70 H83 P26 P35 |
| Date: | 2006–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:liu:liucej:28&r=cna |
| By: | Dwayne Benjamin; Loren Brandt; John Giles; Sangui Wang |
| Abstract: | This paper provides an overview of the evolution of income inequality in China from 1987 to 2002, employing three series of data sets. Our focus is on both urban and rural inequality, as well as the urban-rural gap, with the objective of summarizing several “first-order” empirical patterns concerning the trajectory of inequality through the reform period. We document significant increases of inequality within China’s urban and rural populations. In rural areas, increased inequality is primarily related to the dis-equalizing role of non-agricultural self-employment income and slow growth in agricultural income from the mid-1990s onward. Poverty persists, and tied in part to slow growth in agricultural commodity prices. In urban areas, the declining role of subsidies and entitlements, the increase in wage inequality and the layoffs during restructuring, have fueled the growth in inequality within urban areas. Poverty levels, however, are very low. We find that spatial (regional) dimensions of inequality are significant, but are much less important than commonly believed for both the urban and rural populations, and for differences between urban and rural areas. Accounting for urban-rural reclassification, which otherwise exaggerates the rising urban-rural gap, we find a relatively stable ratio of urban to rural incomes. This hides some geographical variation, however: The urban-rural gap is increasing more rapidly in interior provinces, where SOE’s had a more dominant role in economic activity in urban areas, than in coastal provinces where the non-state sector was more important earlier in the reform period. |
| Keywords: | China, Income Distribution; Poverty; Inequality; welfare; transition; development |
| JEL: | I3 P2 O1 D3 |
| Date: | 2005–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-238&r=cna |
| By: | Alessia Amighini |
| Abstract: | This paper investigates the position of China in the international fragmentation of production in the ICT industry, the most dynamic and globally dispersed sector in the world economy. The evidence shows that during the 1990s China dramatically increased its market shares in ICT products and now ranks among the top three world exporters. Moreover, China has upgraded from mere assembly of imported inputs to the manufacturing of high-tech intermediate goods. As a result, import dependence has declined and the domestic value added of exports has increased. This supports the hypothesis that industrial upgrading occurred in some tradable sectors through technological learning associated with processing trade. Therefore, a pattern of specialization initially dominated by processing trade could be favourable to a country's long-term development, to the extent that entering at the lower end of high-tech sectors is promotive of catching up in more sophisticated technology-intensive production |
| JEL: | F02 F14 L63 N60 |
| Date: | 2005–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:liu:liucej:20&r=cna |
| By: | Dwayne Benjamin; Loren Brandt; John Giles |
| Abstract: | We explore the relationship between the level of village inequality in 1986, and the subsequent growth of household incomes from 1986 to 1999. Using a detailed household-level data set from rural China, we find robust evidence that initial inequality is negatively related to subsequent household income growth. We are able to address a number of econometric issues that affect the use of aggregate data for this exercise, especially measurement error and aggregation: Our results strongly suggest that village inequality has an external adverse impact on household-level income trajectories. However, once we account for possibly fixed village-level unobserved heterogeneity, we find no evidence that changes in inequality are correlated with household income growth: Whatever factor drives the inequality-growth relationship only operates in the “long run.” We explore several possible avenues by which initial inequality – or an unobserved variable correlated with it – affects household income growth. While we do not find the precise mechanism, our findings point toward a class of explanations based on collective choice (like the provision of public goods or determination of local taxes), and away from credit-market based explanations. |
| Keywords: | Inequality; Growth; Rural China; Panel Data |
| JEL: | O12 O15 P20 |
| Date: | 2006–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-237&r=cna |
| By: | Robert Dekle; Kenneth Kletzer |
| Abstract: | A model of the domestic financial intermediation of foreign capital inflows based on agency costs is developed for studying financial crises in emerging markets. In equilibrium, the banking system becomes progressively more fragile under imperfect prudential regulation and public sector loan guarantees until a crisis occurs with a sudden reversal of capital flows. The crisis evolves endogenously as the banking system becomes increasingly vulnerable through the renegotiation of loans after idiosyncratic firm-specific revenue shocks. The model generates dynamic relationships between foreign capital inflows, domestic investment, corporate debt and equity values in an endogenous growth model. The model's assumptions and implications for the behavior of the economy before and after crisis are compared to the experience of five East Asian economies. The case studies compare three that suffered a crisis or near-crisis, Thailand and Malaysia, to two that did not, Taiwan Province of China and Singapore, and lend support to the model. |
| Keywords: | Bank regulations , Asia , Financial crisis , Exchange rate regimes , Capital inflows , Economic models , |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:01/63&r=cna |
| By: | W. Max Corden (Department of Economics, The University of Melbourne) |
| Abstract: | The international current account imbalance, where the United States has a vast deficit and several countries, notably Japan, China, Germany and the oil exporters have corresponding surpluses, is usually seen as a problem. The argument here is that current account imbalances simply indicate intertemporal trade – the exchange of goods and services for claims. There are likely to be gains from trade of that kind as from ordinary trade. What then are the problems? This paper considers several scenarios, notably one where net savings of the surplus countries decline so that the world real interest rate rises, and another where the US fiscal deficit is reduced, so that the world real interest rate falls and there could be a world wide aggregate demand problem, essentially caused by the high net savings of the surplus countries. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2006n13&r=cna |