|
on China |
| By: | Rodolfo Maino; Bernard Laurens |
| Abstract: | The People's Bank of China (PBC) has made great strides in modernizing its monetary policy frameworks but their effectiveness will diminish as the sophistication of the economy increases. Empirical evidence supports maintaining a reference to money in China's monetary strategy and enhancing the role of interest rates in its conduct. We advocate adoption of an eclectic strategy involving the monitoring of several indicators, and of a short-term interest rate as the operational target. The PBC should be granted discretion to change its policy rate, and there are no technical obstacles for such a move to occur in the near future. |
| Keywords: | Monetary policy , China , Monetary policy instruments , Demand for money , Economic indicators , Interest rates , |
| Date: | 2007–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/14&r=cna |
| By: | David Dollar; Shang-Jin Wei |
| Abstract: | Based on a survey that we designed and that covers a stratified random sample of 12,400 firms in 120 cities in China with firm-level accounting information for 2002-2004, this paper examines the presence of systematic distortions in capital allocation that result in uneven marginal returns to capital across firm ownership, regions, and sectors. It provides a systematic comparison of investment efficiency among wholly and partially state-owned, wholly and partially foreignowned, and domestic privately owned firms, conditioning on their sector, location, and size characteristics. It finds that even after a quarter-of-century of reforms, state-owned firms still have significantly lower returns to capital, on average, than domestic private or foreign-owned firms. Similarly, certain regions and sectors have consistently lower returns to capital than other regions and sectors. By our calculation, if China succeeds in allocating its capital more efficiently, it could reduce its investment intensity by 5 percent of GDP without sacrificing its economic growth (and hence deliver a greater improvement to its citizens' living standard). |
| Keywords: | Capital , China , Financial systems , Investment , Industry , Resource allocation , Economic reforms , |
| Date: | 2007–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/9&r=cna |
| By: | Yin Hua Mai |
| Abstract: | MC-HUGE is a dynamic Computable General Equilibrium model of the Chinese economy. The core CGE part of the MC-HUGE model is based on that of the ORANI model. The dynamic mechanism of MC-HUGE is based on that of the MONASH model. This paper documents how the MC-HUGE model is calibrated to China's economic growth data from 1997 to 2005. It also reports how the model is used to forecast a growth path for the Chinese economy from 2005 to 2015. The historical and the forecast simulation produce a baseline or a business-as-usual scenario with which to compare the effects of any changes in economic policies or environment. |
| Keywords: | China, CGE modelling, economic growth, oil |
| JEL: | C68 F14 O10 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-161&r=cna |
| By: | Lining He (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA); Faye Duchin (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA) |
| Abstract: | Significant economic disparities among China's Eastern, Central, and Western regions pose unequivocal challenges to social equality and political stability in the country. A major impediment to economic development, especially in the poor, remote Western region, is the shortage of transportation infrastructure. The Chinese government has committed to substantial investment for improving the accessibility of this vast, land-locked region as a mechanism for promoting its development. The paper examines the impacts of the intended transportation infrastructure buildup on the Western region's comparative advantage and its interregional trade. The World Trade Model is extended to represent this investment and applied to determine interregional trade in China based on region-specific technologies, factor endowments and prices, and consumption patterns as well as the capacities and costs of carrying goods among regions using the interregional transportation infrastructure in place in the base year of 1997 and that planned for 2010 and 2020. The model is implemented for 3 regions, 27 sectors, and 7 factors. The results indicate that the planned infrastructure buildup will be cost-effective, will increase benefits especially for the Western region, and that it can conserve energy overall at given levels of demand but substitute oil for coal. Based on these and other model results, some recommendations are offered about strategies for regional development in China. |
| JEL: | L98 O53 C61 C67 O18 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:rpi:rpiwpe:0705&r=cna |