Angang Hu

An Empirical Analysis of Provincial Productivity in China (1979-2001)

This study estimates and analyzes provincial productivity growth in China for the period 1979–2001. The Malmquist Index approach allows us to decompose productivity growth into two components, technological progress and efficiency change. Considerable productivity growth was found for most of the data period, but it was accomplished mainly through technological progress rather than efficiency improvement. Although Chinas capital stock has accumulated at record speed in recent years, our findings show that TFP growth slowed down significantly during 1995–2001. The study thus raises serious questions about whether Chinas recent growth pattern is consistent with its comparative advantages, and whether its reliance on capital accumulation can be sustained in the long run.

Economic Growth and Employment Growth in China (1978-2001)

The creation of more jobs for Chinas massive labor force is the foremost economic development objective for the Chinese government. This paper analyzes the relations between economic growth and employment growth, between capital growth and employment growth, and between wage growth and employment growth in China. The solution to Chinas unemployment problem requires not only changes in Chinas macroeconomic and employment policies, but also a change in the priorities of the countrys economic growth model from output growth toward employment growth. Moreover, it will be necessary to handle correctly the relations between labor-intensive industries and capital-intensive industries, balance the interests of laborers and the interests of capital, and support the expansion of domestic demand and the creation of employment opportunities.

Multiple Forces Driving China's Economic Development: A New Analytic Framework

Based on economic growth theory and the World Banks analytical framework relating to the quality of growth, the present paper constructs a framework that encompasses physical, international, human, natural and knowledge capital to synthetically interpret economic development. After defining the five types of capital and total capital, we analyze the dynamic changes of these types of capital in China and in other countries. The results show that since Chinas reform and opening up, knowledge, international, human and physical capital have grown rapidly, with speeds of growth higher than that of economic growth. As the five types of capital have all increased at varying paces, the savings level of total capital in China has quadrupled in 25 years and overtook that of the USA in the 1990s. The changes in the five types of capital and total capital reveal that there are progressively multiple driving forces behind Chinas rapid economic development. Implications for Chinas long-term economic development are thereby raised.

Nonlinear investigations of China's agricultural transformation based on the structural break regime switching model

Purpose - Investigating the characteristics of the transformation of Chinas agricultural growth and the institutional reforms during the whole transition period in the 1980s will help to understand Chinas economic and agricultural reform and offer some successful experiences to other developing countries. The purpose of this paper is to answer the following questions: Has Chinas agricultural output experienced a structural break toward a more stable state? When did the break point happen? What factors did play key roles during the transformation? Design/methodology/approach - This study applies the nonlinear structural break regime switching analysis which includes two different models: one with the structural break only in the variance and one with the structural break in both shift parameters and the variance. Findings - The empirical results showed that it took five years for agricultural development in China to finish the reform that began in 1980. The agricultural growth had become more stable after the break point which was around 1985-1986. Both the primary industry and agricultural sector had transformed from a “low growth rate, high volatility” state to a “high growth rate, low volatility” state. Among the different driving factors, the Household Responsibility System (HRS) and preferential policies for agricultural products played the most important roles in the early stage of the economic reform. Originality/value - The authors first study the structural break of Chinas agricultural output by the regime switching model. From the empirical results, the structural break point was determined to be around 1985-1986, after which Chinas agricultural output had become more stable.

The Distinctive Transition of China’s Five-Year Plans

China has taken a distinctive path of economic transition, combining both the market and the plan. In introducing the market mechanism, the government has not abandoned the planning mechanism, as was done in other socialist countries, but instead has reformed it. The five-year plan has thus been transformed from economic planning to public affairs governance planning. Today the plan and the market are combined so that the two supplement and stimulate each other.

China as the Workshop of the World: Measuring the Role of Foreign Direct Investment Through Manufacturing Sectors and Products

Abstract: In this paper, we focus on the role of Chinas manufacturing in the international division of labor from the perspective of foreign direct investment (FDI). We first discuss the contribution made by Chinas manufacturing sector to capital accumulation, manifested internally by domestic oversaving and externally by Chinas trade surplus. Chinas output under various conditions is then measured, and the role of FDI in different manufacturing industries, differentiated according to technological type, is examined. Deconstructing the trade balance and highlighting the role of processing, the analysis provides details on the role of FDI in Chinas merchandise trade. The analysis also shows that Chinas distorted research and development expenditure in various manufacturing industries is related to lack of innovation capacity in the high-technology industries dominated by FDI.

Concerted Efforts Toward Great Harmony

“The people, and the people alone, are the motive force in the making of world history” (Mao Zedong 1991). ‘The people’ refers to both Chinese people and the people of the world. These people are the real heroes; they have created both Chinese and world history. These are our elementary views and perspectives concerning China and the rest of the world, encompassing our dialectical and historical materialism.

High-Welfare State

The fundamental aim of China’s development is to improve the welfare of its population, providing not only a prosperous and decent life for all, but also higher levels of education, and a healthier and longer life.

World Economic Power

The New China of the 1950s, not long after it was founded, was a backward, despised and wretched country. It was one of the poorest and most undeveloped countries in the world. It was at that time that Mao Zedong proudly told the delegates of the 8th National Party Congress:

A World of Common Prosperity

Since the reform and opening up of China more than 30 years ago, the country has been actively involved in the world economy. China has become the biggest beneficiary of economic globalization and has rapidly grown to become the second largest trader (climbing from its original position of 29th place). China will soon overtake the United States to become the world’s No. 1 importer and exporter and the bellwether of economic integration and trade liberalization, playing a significant role in the global economic system.