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741. China's Governance in Transition

Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
China's economic reforms over the past two decades have brought remarkable growth, the development of a vibrant private sector and significant reform of the state-owned sector. Private businesses now represent some 57% of GDP, and productivity in the state-owned sector has improved significantly. However, a number of problems threaten to undermine prospects for sustainable growth. These notably include social tensions, partly due to increasing inequality within society and massive migration to the cities, but also linked to corruption, insufficient public services and rising unemployment as millions of workers have been laid off in the reform of the state-owned sector, while agriculture still displays huge structural under-employment.
Topic:
Development, Economics, and Government
Political Geography:
China and Asia

742. Economic Survey of China, 2005

Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
China's economic growth has averaged 9½% per cent over the past two decades. The rapid pace of economic change is likely to be sustained for some time. These gains have contributed not only to higher personal incomes, but also to a significant reduction in poverty. At the same time, the economy has become substantially integrated with the world economy. A large part of these gains have come through profound shifts in government policies. Reforms have allowed market prices and private investors to play a significant role in production and trade.
Topic:
Development, Economics, and Emerging Markets
Political Geography:
China and Asia

743. Why Do Poverty Rates Differ From Region to Region? The Case of Urban China

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper proposes a semi-parametric method for poverty decomposition, which combines the data-generating procedure of Shorrocks and Wan (2004) with the Shapley value framework of Shorrocks (1999). Compared with the popular method of Datt and Ravallion (1992), our method is more robust to misspecification errors, does not require the predetermination of functional forms, provides better fit to the underlying Lorenz curve and incorporates the residual term in a rigorous way. The method is applied to decomposing variations of urban poverty across the Chinese provinces into three components – contributions by the differences in average nominal income, inequality and poverty line. The results foreground average income as the key determinant of poverty incidence, but also attach importance to the influence of distribution. The regional pattern of the decomposition suggests provincial groupings based not entirely on geographical locations.
Topic:
Demographics, Economics, and Poverty
Political Geography:
China and Asia

744. All Not Quiet on the Eastern Front

Author:
James R. Lilley
Publication Date:
04-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Nationalistic competition between Japan and China could undermine progress on economic and security concerns in east Asia. U.S. diplomacy has an important role in preventing that.
Topic:
International Relations, Foreign Policy, Democratization, and Economics
Political Geography:
Japan, China, and Asia

745. Slower Growth

Author:
John H. Makin
Publication Date:
02-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The average forecast for 2005 U.S. growth is 3.5 percent, with some prognosticators hoping for 4 percent. This forecast is predicated upon the assumption that the economy is on a sustainable expansion path, where consumption will be supported by steady growth of employment and household incomes. The 3.5 percent growth forecast for 2005 is identical to the mean growth rate of the U.S. economy since 1947. However, there is good reason to believe that the consensus forecast is too high. This possibility has important consequences because U.S. growth must be sustained at least at average levels to avoid a sharp drop in global growth. There are no signs of higher growth in Europe and Asia. Growth in Japan is looking weaker, while Chinese growth is moderating.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States, Japan, China, Europe, and Asia

746. Energy Conservation: An Economic Perspective

Author:
Robert W. Hahn
Publication Date:
10-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
With oil and gas prices at record levels, Persian Gulf producers threatened by terrorists, and exploding demand from China likely to strain supplies for years to come, surely it is time for Washington to get serious about energy conservation. Well, yes . . . and no. While most economists (including me) are deeply skeptical about the value of government mandates for energy efficiency, in principle there is a case to be made for using taxes to “internalize” the costs of consumption that are not otherwise reflected in prices. But those costs are lower than you might expect—lower, perhaps, than the taxes currently charged at the pump. Moreover, while oil-security worries are now driving the calls for conservation, a careful look suggests that the neglected costs are actually related to traffic congestion and the threat of global warming. Taxing oil consumption (as opposed to taxing road use or carbon emissions) would hardly get to the roots of these problems.
Topic:
International Relations, Economics, Energy Policy, and Terrorism
Political Geography:
China and Washington

747. Why Is the World Bank Still Lending?

Author:
Adam Lerrick
Publication Date:
11-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
World Bank money is building schools in China's impoverished western provinces, but the bill for interest charges is being mailed to the United Kingdom, attention Chancellor of Exchequer Gordon Brown. Mexico, Chile, and Brazil will soon be lining up for the same deal. This is but the latest scheme designed to preserve the World Bank's lending role at a time when the need and demand for its services are falling. Major middle-income countries, the cream of the bank's lending portfolio and where more than 80 percent of Latin Americans live, are curbing their borrowing and paying down their balances, setting off alarms at the bank. Net loan flows have shifted from a positive $10 billion in 1999–2001, to a negative $15 billion in 2002–2004.
Topic:
Debt, Development, Economics, and Third World
Political Geography:
China, United Kingdom, Brazil, Latin America, Mexico, and Chile

748. Market Comrades

Author:
R. Glenn Hubbard
Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Ceremonial gift-giving is an integral part of doing business in China. The value lies not so much in the gift (whose packaging is often more elaborate), but in the possibility of cementing a mutually beneficial relationship. And so it was a few weeks ago with the headline-grabbing announcement that China would revalue the yuan against the U.S. dollar. The modest gesture may make more possible a comprehensive economic dialogue between China and the United States in the interest of both nations. The announcement on July 21 by the People's Bank of China that it would revalue the yuan, abandoning the eleven-year-old peg of 8.28 yuan per U.S. dollar, caught financial markets by surprise. The jolt led market participants to gauge effects of current (and perhaps future) revaluations on currency values and interest rates. And, some U.S. political leaders claimed a victory in the campaign to blame Chinese “market manipulation” for external imbalances facing the United States.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United States, China, and Asia

749. Yuan Answers?

Author:
Phillip L. Swagel
Publication Date:
06-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
If China decides to adopt a flexible exchange rate, as many U.S. policymakers have urged, gains in U.S. exports and national savings in the long term will be offset by higher prices on Chinese goods and higher interest rates in the short term.
Topic:
Economics, International Trade and Finance, and Politics
Political Geography:
China and Asia

750. What Kind of Landing for the Chinese Economy?

Author:
Nicholas R. Lardy and Morris Goldstein
Publication Date:
11-2004
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Rarely has the outlook for the Chinese economy been so contested. The financial press widely quotes three alternative perspectives on the short-and medium-term outlook. One school argues that the Chinese government's recent efforts to rein in overly rapid growth are working and that the economy is now on a glide path to what is referred to as a soft landing. While “soft landing” is usually not fully defined, its chief feature in this case is that Chinese economic growth slows modestly from its current pace of 9 to 10 percent to around 8 percent and that the rate of job creation does not slow enough to constitute a major political challenge for the regime. At the other end of the spectrum is the hard landing school, which argues that the authorities to date have not tightened sufficiently, that loan and investment growth remain excessive, and that the authorities soon will be forced to take more drastic action that will trigger a sharp correction. Finally, the no landing school argues that China's efforts to slow growth modestly are misguided since the economy was not overheating in 2003 and early 2004. In this view, China is in the early stages of a secular boom that has several additional years to run.
Topic:
Economics and Political Economy
Political Geography:
China and Asia