Jinghai Zheng

Efficiency, Technical Progress, and Best Practice in Chinese State Enterprises (1980-1994)

In spite of rapid economic growth and swift structural change during the last two decades, China’s industrial reform is far from complete, especially with regard to state enterprises (SOEs). Although troubled with huge financial losses, heavy debt, and substantial over-staffing, SOEs will continue to play a crucial part in the government policy to maintain social stability and economic growth in China. This study, based on samples of about 700 state enterprises during 1980-94, investigates productivity performance of the SOEs using Data Envelopment Analysis and Malmquist Index. Our empirical results show that average technical efficiency had been low among the sample SOEs. Considerable productivity growth was found, but it was mainly accomplished through technical progress rather than efficiency improvement. Regression analyses indicate that wage incentives and education had positive impacts on productivity growth, while large scale was an important determinant of whether an SOE was applying best practice technology. It is also shown that large SOEs were more likely to generate technical progress. These findings are consistent with the industrial structural adjustment program initiated by the government in 1994, which has focused on improving productive efficiency via redundancies and technology upgrading, and on building its best SOEs into conglomerates.

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.

China and the changing landscape of the world economy

The rapid development of emerging markets is changing the landscape of the world economy and may have profound implications for international relations. China is often regarded as the most influential emerging market economy because, during the last three decades, it has become increasingly integrated into the world economic system and its success and failure now affect the well-being of other nations in the world. As the financial crisis in the US and EU intensifies, the economic prosperity of the world depends to a large extent on the sustained development of the Chinese economy and other emerging markets, and vice versa.

Institutions and Development: The Case of China in Comparative Perspectives

Abstract: The limited explanatory power of conventional wisdom in understanding the “China miracle“ calls for theories with more universal appeal. The theories might have been considerably enriched if sufficient credit had been given to China’s contribution to the evolution of the modern state in human history. Using conventional wisdom as a benchmark, we demonstrate that an analytical framework might be developed to accommodate characteristics of Chinese society with its unique history and cultural values. Our preliminary results indicate that it was perhaps the set of values emphasizing personal development and rights to property that have enabled the China miracle experienced over the past three decades. Long-standing issues such as excessive reliance on the state for the provision of public goods and omnipresent government control of resource industries are largely consistent with China’s record of civilization state development during various ancient dynasties.

Measuring and explaining productivity growth in China

Europe was the past, the US is the present and a China-dominated Asia the future of the global economy. (Martin Wolf, 2003)

An introduction: the challenges of the Chinese electricity industry and its reform

This introduction is to highlight comprehensively the Chinese electricity industry for issues related to the institutional reform, capacity growth, pricing regime, technology development, supply structure and new investment in upgrading electric power grids. Through reviews of statistics and documentaries, we provide a generally updated understanding of the current development and reform of China’s electric power industry, which is one strategic focus of the Chinese Government for its further reform in the energy sector.

Towards comprehensive frameworks for Chinese productivity studies

On the basis of the previous success of productivity workshops in 2007 at Tsinghua University and in 2008 at Zhejiang University, and in cooperation with the Chinese Economic Association (Europe), the 2012 International Workshop on Chinese Productivity was sponsored by the School for Public Policy and Management at Tsinghua University. The Workshop provided another opportunity for academic researchers to communicate their research results and to discuss important issues in the field of applied productivity analysis in general and specific issues concerning China in particular. This special issue is one of the outcomes from the workshop. The first paper by Sickles, Hao, and Shang provides a brief survey and addresses generic methodological issues in regard to identifying and estimating the two major components of aggregate productivity growth: technical change and efficiency change (catch-up). The paper compares the productivity performance of Asian economies. Färe et al. present a model on environmental efficiency using Swedish data and discuss the potential for applications in the Chinese situation. In the third paper, Han and coauthors study the performance of Chinese commercial banks from aspects of social productive efficiency, service efficiency, profit efficiency and growth efficiency. The last paper by Jensen and Schøtt put innovation performance by a firm in social contexts, studying the difference between China and the rest of the world in terms of networking and innovation and the relationship between the two. The collection of the papers in the special issue reflect the growing interests in recent years in the comparison of productivity performance across economies with different institutional set-ups, increasing concerns of environmental issues in the fast growing Chinese economy and a gradual awareness of innovation and productivity performance in relation to social and historical factors. Therefore, current productivity studies require far more sophisticated frameworks and involve a wide range of cutting edge methodologies such as techniques of frontier analysis, dynamic models of innovation determinants and institutional analysis of national innovation systems. We believe as more resources are attracted into the area of Chinese productivity studies more fruitful results can be expected in the near future. As our work has benefited from many individuals and institutions, we would like to take this opportunity to mention just a few. Since 2007, Professor Angang Hu of Tsinghua University has been a main driving force behind the three workshops on Chinese productivity. It would not have been possible for us to achieve what has been

A short-run production function for electricity generation in China

Process industries, such as chemicals, aluminium, steel, pulp and paper, and thermal electricity generation, are important basic industries for economic growth in an economy such as the Chinese one. In order to promote improved efficiency and growth-inducing structural change, it is of paramount importance to model the development of such industries in a relevant way. It will then be necessary to go outside the smooth textbook production theory and turn to models incorporating typical features of process industries, such as embodied technical change, a sharp difference in substitution possibilities before and after investing, and a dynamic change at the industry level driven by entry and exit of plants and embodied technical change. The purpose of the paper is to give an introduction to the key production function concept of a short-run industry production function, and to show how this concept is the key to understanding industry dynamics. An empirical application is made on data for Chinese coal-fired electricity generation plants for one year. However, this will only be the first stage in a full-blown dynamic analysis. Combined cross-section and time-series data for plants are then required.